Why Does the World Become Stronger with Each Crisis? — The "Resilient Economy" Supported by AI, Asia, and Decentralization

The global economy, by common sense, could have been hit harder.

The U.S. strengthening its tariff policies, military tensions between the U.S. and Iran, attacks on ships passing through the Strait of Hormuz, rising crude oil and transportation costs, stagnation in the European economy, and expanding fiscal deficits in various countries. The environment surrounding global businesses and consumers is far from calm.

However, economic activities and financial markets have not completely collapsed. Even when stock prices fall significantly, they are bought back, and international trade has not shrunk as much as expected. Although the crude oil market shakes every time the Middle East situation worsens, many investors have not factored in a scenario where the global energy supply stops for an extended period.

The word that succinctly describes this situation is "resilience."

Resilience does not mean that crises do not occur. It refers to the ability to recover functions by using alternative routes, technologies, or regions, even when impacted, without completely halting economic activities.

Understanding the global economy in 2026 requires looking not only at the magnitude of the crisis itself but also at how the global economy has transformed into a "less fragile structure" through past crises.

Why the market doesn't completely collapse during the Middle East crisis

The biggest current uncertainty is the Middle East situation centered around the U.S.-Iran confrontation.

The Strait of Hormuz is a crucial route for transporting crude oil, petroleum products, and liquefied natural gas from major oil-producing countries in the Middle East to Asia and Europe. Continued attacks on ships and navigation restrictions here would impact not only energy prices but also marine insurance premiums, shipping rates, fertilizers, chemicals, and food prices.

The rise in crude oil prices is not just a matter of gasoline becoming more expensive.

Transportation costs for trucks, ships, and aircraft rise, and the manufacturing costs of plastics and chemical materials increase. Natural gas prices tend to follow crude oil prices and are reflected in electricity rates with a delay. If fertilizer prices rise, it will affect food prices over several months to more than a year.

Nevertheless, the financial market is not in a full-blown panic because there is an expectation that "the crisis is intense but will not lead to a permanent total blockade."

The crude oil futures market reacts to immediate supply concerns but does not necessarily focus on a scenario where supply is completely lost over the long term. Both the U.S. and Iran use military intimidation as a bargaining tool, but there is a strong view that they want to avoid a long-term conflict that would collapse the global economy.

However, there is also a risk in this optimism.

Once trust in the safety of ship navigation, insurance contracts, and crude oil shipments is lost, a ceasefire announcement alone will not immediately normalize the situation. If the possibility of mines remaining in the sea or the risk of re-attacks is perceived, shipping companies and insurance companies will become cautious.

In other words, there is a time lag between political ceasefires and the normalization of logistics. If the market only factors in ceasefire expectations first, prices may fluctuate sharply again if the actual supply recovery is delayed.

Three structural changes that create the "strength" of the global economy

The reasons why the current global economy is holding up better than expected can be broadly categorized into three.

The first is the advancement of supply chain diversification and rerouting.

Having experienced the COVID-19 pandemic, Russia's invasion of Ukraine, U.S.-China tensions, and route uncertainties in the Red Sea and Middle East, companies have learned the dangers of relying on a single country, port, or transportation route.

Efforts have been made to position production bases in multiple countries ("China Plus One"), increase inventories, secure alternative parts, use different routes for transportation, and diversify business partners. While these increase costs during normal times, they serve as insurance to prevent supply stoppages during crises.

Regarding U.S. tariff policies, the actual impact on the real economy may not be as significant as the apparent tax rates suggest. Exemptions, delays in implementation, transactions via third countries, changes in procurement sources, and companies' efforts to suppress price transfers help mitigate short-term shocks.

This does not mean tariffs are harmless. Rather, they complicate corporate investment decisions and reduce efficiency in the long term. However, the important point is that trade does not disappear instantly but is reorganized by changing routes, items, and partner countries.

The second is the expansion of cross-border service transactions.

In the past, international trade mainly involved transporting products manufactured in factories by ship. Now, transactions that can be provided via communication lines, such as software, cloud services, video, design, data analysis, online education, finance, and consulting, are increasing.

These services are less affected by port blockades and some tariffs. Even if geopolitical borders strengthen, data and expertise can easily find alternative routes.

Of course, there are new obstacles such as data regulations, export controls, and cyberattacks. However, compared to the era when the global economy relied solely on physical transportation, there are now multiple escape routes.

The third is the multipolarization of economic growth centers.

Even if the U.S. and Europe slow down, India, Southeast Asia, the Middle East, and South America generate certain demand. While the Chinese economy has structural issues, the era when the global economy was determined solely by the economic conditions of one country is over.

While the "end of globalization" is being discussed, in reality, the form of globalization is changing. It is shifting from a one-directional integration centered on the U.S. to a complex network spanning multiple regional zones.

An unusual structure where AI and semiconductors offset crises

The biggest factor in discussing the current resilience is AI-related investment.

Investments in data centers, semiconductors, semiconductor manufacturing equipment, memory, communication equipment, power grids, cooling devices, and software are boosting corporate capital investment and international trade.

According to WTO analysis, global merchandise trade in 2025 expanded significantly beyond pre-expectations. This was not only due to last-minute imports before tariff implementation but also due to strong demand for AI-related products. An unusual structure emerged where AI-related investments offset the adverse effects of tariffs and policy uncertainties.

It's not just the large U.S. IT companies that benefit.

Demand is spreading across the entire Asian technology supply chain, including South Korea and Taiwan, which supply semiconductors, and Malaysia, Thailand, and Vietnam, which are involved in data center and electronic equipment production. The AI boom is supporting the global economy through Asian exports and capital investment.

On the other hand, it is hard to say that Japan is fully included at the center of this.

Japanese companies have high competitiveness in semiconductor manufacturing equipment, materials, precision components, sensors, power equipment, and factory automation. However, unlike South Korea and Taiwan, the increase in final semiconductor exports does not significantly boost the overall growth rate of the country.

For Japan, what matters is not just whether AI companies' stock prices rise. It is about whether the demand created by AI investment can be linked to domestic productivity improvement, wage increases, local capital investment, and power infrastructure updates.

Simply supplying parts for overseas AI capital investment will not solve the low productivity and labor shortages in the domestic service industry. If generative AI and automation technologies can be expanded to SMEs, logistics, healthcare, administration, tourism, and construction, Japan can also become a beneficiary of the technology cycle.

Conversely, if the introduction is delayed, there is a risk of remaining a "technology importing country" that only suffers from the impact of rising energy prices without fully benefiting from AI-driven growth.

Global resilience does not mean security for Japan

The IMF predicts that the global economy will continue to grow, albeit at a slower pace, in 2026. Meanwhile, Japan's growth rate is expected to be significantly below the global average.

This highlights the issue that global economic resilience and Japanese economic resilience are not the same.

The U.S. has an aspect as an oil-producing country, and even if crude oil prices rise, domestic energy companies' profits and investments provide support. South Korea and Taiwan are energy-importing countries, but the tailwind of semiconductor exports can easily offset the adverse effects of high crude oil prices.

In contrast, Japan relies heavily on imports for crude oil and liquefied natural gas. According to Cabinet Office materials, Japan's crude oil and crude oil imports are heavily weighted towards the UAE and Saudi Arabia.

When energy prices rise, the import payments from Japan to overseas increase. Even if corporate sales do not change, profits decrease due to higher fuel and transportation costs. In households, spending on electricity, gas, gasoline, and food increases, reducing real purchasing power.

Even if nominal wages rise, if prices rise faster, life does not become more prosperous.

According to Cabinet Office analysis, a 10% rise in crude oil prices gradually pushes up consumer prices. The impact first appears in gasoline and then spreads to electricity rates, transportation costs, and food. It takes nearly a year for the impact on overall consumer prices to reach its peak, and it may take a long time to subside.

This time lag makes policy responses difficult.

Even when crude oil prices begin to stabilize, past increases may be passed on to electricity rates and processed food prices. A phenomenon occurs where household burdens continue to increase even though the news reports "crude oil prices are falling."

In particular, low-income households and elderly households have a high proportion of spending on food and energy. They are less likely to benefit from rising stock prices and corporate profits, while directly suffering from the impact of rising prices.

Even if the global economy avoids collapse, the reason Japanese consumers do not feel that "the economy is strong" lies here.

Japanese stocks face a tug-of-war between "high crude oil prices" and "AI demand"

In the Japanese stock market, not all companies move in the same direction.

Rising crude oil prices push up costs across a wide range of industries, including airlines, land transportation, shipping, chemicals, paper and pulp, food, retail, and electricity and gas. If companies cannot raise prices, profits decrease, and if they do raise prices, consumption may decline.

On the other hand, semiconductor manufacturing equipment, electronic components, data center-related, electric wires, transformers, construction, and cooling equipment benefit from the expansion of AI investment.

Defense, cybersecurity, resource development, energy efficiency, power-saving technologies, and storage batteries may also see long-term demand increase due to rising geopolitical risks.

Therefore, even if the overall stock index appears firm, significant selection is progressing internally.

If expectations for AI-related stocks are too high, stock prices may fall even with good earnings. Conversely, if geopolitical risks temporarily recede, cyclical stocks that were sold off may rebound sharply. It is becoming more difficult than ever to judge whether "the Japanese economy is strong" or "weak" just by looking at the index.

Moreover, the yen exchange rate is also complex.

Since Japan is an energy-importing country, high crude oil prices tend to lead to yen depreciation through worsening trade balances. On the other hand, the yen may be bought during global risk aversion phases. The outlook for U.S. interest rates and the Bank of Japan's policies also play a role, so the relationship between geopolitical risks and the yen exchange rate is not one-directional.

If yen depreciation and high crude oil prices progress simultaneously, Japanese companies and households face a double burden of rising dollar-denominated prices and falling exchange rates. This combination is one of the scenarios Japan should be most wary of.

"Optimism" and "market distrust" prominent on social media

 

An overview of public posts on X and Reddit reveals that reactions to the resilience of the global economy and markets are largely divided into two.

 

One is the optimism that buying opportunities arise every time a crisis occurs.

Opinions such as "buying during declines has led to market recovery," "as long as AI investment and corporate profits continue, stock prices will not easily collapse," and "energy supply will switch to alternative routes" are seen. There is also strong expectation that governments and central banks will not leave severe economic downturns unaddressed and will move to release reserves, provide subsidies, ease monetary policy, and offer fiscal support.

This mindset is based on the experience after the COVID-19 crisis.

Even when the economy came to a sudden halt, the market quickly recovered due to large-scale monetary and fiscal policies, creating a learning effect among investors that "ultimately, policy will support." With a large inflow of funds into the market and the value of cash diminishing due to inflation, it is considered more rational to continue holding stocks.

The other is the cautionary view that the market is underestimating geopolitical risks.

Posts such as "crude oil prices, inflation, interest rate hikes, and wars are happening simultaneously, yet stock prices are too high," "the market assumes a ceasefire will occur shortly," and "financial market calm does not mean economic safety" are prominent.

Particularly noted is the gap between the stock market and the lived experience.

Even if giant technology companies and the wealthy benefit from rising stock prices, ordinary households struggle with rising fuel, food, and housing costs. Just because stock indices are rising does not necessarily mean society as a whole is becoming wealthier.

Regarding energy dependence, opinions such as "we should reduce procurement from the Middle East," "reserves alone cannot withstand a long-term crisis," and "we should diversify supply sources, including renewable energy and nuclear power" are seen.

On the other hand, there are counterarguments that it is not realistic to eliminate Middle East dependence in a short period and that changing procurement sources incurs additional costs.

Posts on social media are not opinion polls and are biased by users' attributes and interests. However, the discomfort of "market strength" and "living hardship" coexisting is an important clue to understanding the current economy.

The disparity behind resilience

The fact that the global economy has become more capable of withstanding crises is fundamentally a positive change.

However, this strength comes with costs.

Increasing inventories, diversifying production bases, rerouting, and increasing domestic production for security reasons all reduce efficiency. Moving from the traditional globalization of