Russia’s unprovoked war against Ukraine has accelerated the division of the world into two blocs, one comprising the world’s democracies and the other its autocracies.

This, in turn, has exposed the risks inherent in economic interdependence among countries with clashing ideologies and security interests. And although the coming deglobalization process will leave everyone worse off, China stands to lose the most.

Of course, China was headed toward at least a partial decoupling with the United States well before Russia invaded Ukraine. And it has been seeking to ensure that this process happens on its terms, by reducing its dependence on U.S. markets and technology. To that end, in 2020 China unveiled its so-called dual-circulation strategy, which aims to foster domestic demand and technological self-sufficiency.