Bi-Weekly Geopolitical Report – China’s Rising Power and the Implications for US Hegemony (October 27, 2025)
by Patrick Fearon-Hernandez, CFA | PDF
In a recent report, we noted that the world is now transitioning away from its 30-year era of Globalization, when the United States mostly embraced its traditional role as global hegemon, i.e., the big, dominant country that provides international security, ensures relative order, and issues the reserve currency. Our previous report showed that the world is now entering a new era of Global Fracturing or, potentially, Chinese Hegemony. In this report, we take a deeper dive into the current US-China balance of power. We show that in all key aspects of power — military, diplomatic, technological, and economic — the balance appears to be shifting noticeably in favor of China. As this monumental shift in international relations becomes more obvious, US leaders and voters are increasingly struggling to decide whether they want to cede hegemony to the Chinese, defend it, or reform it into something that is more “America First.” Whatever they decide, the US role as global hegemon is changing as China’s relative strength increases. We conclude our report by discussing the investment implications of this change.