Corporate concentration has been growing in the US. According to the McKinsey Global Institute, profits and losses among both US and European companies are more concentrated than two decades ago. So why are calls for “national champions”— large companies protected and supported by the state — growing too?

European policymakers want to create Franco-German giants that could rival those in the US or China. The German government may use its stake in Commerzbank to orchestrate a merger with Deutsche Bank, creating a state-backed behemoth. In the US, Big Tech has promoted the idea that breaking up companies like Facebook or Google could mean losing the tech race with China. US government officials are urging the oil industry to support American foreign policy goals and threaten countries including Germany and the UK with losing US intelligence information if they do business with China’s Huawei.

The rise of China, with its model of state-supported capitalism, is the obvious trigger. Although Beijing is now playing down its Made in China 2025 campaign, which stoked economic nationalism in the US and Europe, the basic strategy of favouring local players hasn’t changed. The US-China trade war may further Balkanise markets, as Europeans and developing countries are forced to decide whose 5G networks, chips and digital technologies they want to use.