Final answer:
When political rivals gain power after foreign investments have been made, it may lead to economic and political instability, changes in regime safeguards, and shifts in geopolitical influence.
Step-by-step explanation:
If political rivals gain power after a government has allowed significant foreign investment, several implications are possible. Economic instability might ensue similar to the scenarios witnessed in East Asia during the late 1990s, where countries like Thailand, Indonesia, Malaysia, and South Korea experienced deep recessions due to sudden capital flight.
This could also lead to political instability as new leaders may capitalize on economic dissatisfaction to push through significant changes, which could range from reforms aligned with Enlightened ideals to more radical transformations that might be seen as treasonous or even require violence to enforce.
Regarding the impact of populist leaders and the safeguarding against potential harm by demagogues, regime type plays a vital role. Presidential systems may offer more opportunities for populist leaders to emerge, but the balance of power inherent to such systems may also provide checks against any single leader exerting too much influence.
On the other hand, parliamentary systems tend to distribute power more evenly, possibly preventing the rise of a demagogue but also potentially diluting the capacity to enact swift, decisive reforms.
Economic globalization, as seen in the shifting of American jobs to countries with lower labor costs, has brought about political repercussions as well. What initially seemed to weaken nation-state power has, ironically, sparked a movement to increase governmental intervention to protect domestic jobs and address rising inequality.
Therefore, globalization may lead to stronger domestic policies aimed at counteracting negative economic impacts. It is also essential to consider the longer-term strategic implications, such as China's rising influence on the global stage.
China has not only modernized its economy but has also been spreading investments across the globe, including lending money to the U.S. government. The tensions arising from this dynamic could shape future geopolitical relations and the responses of political rivals domestically.