On Friday night, I co-keynoted the annual NYSE dinner with my friend, Morgan Stanley economist and Yale lecturer Steve Roach. It was a convivial group of about 40 CEOs, big listed companies, mostly American and European. Even against backdrop of a failing merger with deutsche bourse, the event went very well. Steve arrived, a little late, and quite shaken. He had just participated in an Open Forum event, a program that runs parallel with the WEF at Davos. He knew there might be trouble when he saw all the police outside. There were about 150 anarchists demonstrating, organized around the high school auditorium (it seats 1,000), who immediately started chanting and yelling -- and rushed the stage towards the end of the event. Security hustled him out the back, downstairs, through the kitchen, and into the dark…where he sped off. You have to give Steve credit -- he rallied pretty well within his friendlier confines of the Hotel Belvedere. But this was a Davos first.

Later that night, I went to the Google party, where all eyes were on the dance floor. Google had installed a "green dance floor" that showed how many watts were being created by the thumping Davos troops. Two points on that. 1. It's not entirely clear to me that this was a group you want to be boogieing down in front of, and 2. That has to be the most farcical pseudo green display since Vice President Gore offset the emissions from his 20-room Nashville mansion. It was a fun party though.

The party also let me spend some time with Circle of Blue co-founder and director J. Carl Ganter, who leads an organization filled with some of the smartest folks on global water scarcity/impact that you'll find. I always try to link up with them for a few moments to pick their brain on a topic that stands to take on increasing importance in the years to come. That's the great thing about Davos: It's a reasonably good bet that pretty much anybody you bump into on an abstruse topic is one of the best in their field. There was a sizable Circle of Blue cohort in attendance, wearing little silver/blue pins on their blazers (the only ones I consistently noticed doing that other than the Japanese delegation), and they always seemed to be moving together in a coordinated clump. At the Google party, though, Ganter's shirt was completely soaked. Not exactly the display I expected from the water scarcity folk.

Saturday morning, I had a host of CEO meetings lined up back-to-back, with a table reserved at the "forum lounge" for the occasion. It was a week of productivity in 2 1/2 hours -- that's the single biggest draw that Davos consistently provides and the most important reason people come. The 30 minute meeting is the standard at Davos; an hour tends to be looked at with suspicion. But for the folks with too many handlers, that can mean 15+ meetings in a day, which seems pretty inhumane.

Saturday night was the big banquet. But my annual tradition is to grab a small group of friends that look at global politics…and head up the funicular to a cozy little restaurant overlooking the village. Rule #1: Casual dress. And rule #2: If you mention a book you've written or are writing, you do a shot. I love that rule. Many fell victim before we headed back down for the after party once the banquet was winding down. And in a strange twist of fate, getting stuck on the funicular had all the elements of a horror movie -- but without the grisly finish. It was a welcome opportunity to share a last quiet conversation before the bustle of the after party and a long trip home. Davos -- exhausting yet exhilarating as always.

When I got to my Davos hotel room, I was greeted by two gifts. One was to be expected: greetings from the CEO of Nestle along with boxed chocolates. Thoroughly Swiss and thoroughly appreciated.

The second? The most politically controversial gift I have ever received.

The Heydar Aliyev Foundation, run by Azerbaijan's First Lady Mehriban Aliyeva, supplied guests with a CD set, dubbed the Voices of Garabagh. It wasn't until I opened up the package and read on that I saw what it was driving at. It was a statement regarding the Garabagh region between Azerbaijan and Armenia, delivered from a starkly one-sided point of view:

"Unfortunately the conflict ignited as a result of unfair territorial claims brought against Azerbaijan. The occupation by Armenian invaders of Garabagh… [has] turned the bright representatives of the Mugham art into internally displaced people… grief, sorrow, and melancholy is being felt today in their performance."

The package was giftwrapped in cellophane, so it was sure to be missed by any personnel intent on keeping such subjective perspective out of the hotel rooms. You have to hand it to this Azeri organization for so craftily injecting their thoughts into the summit. The takeaway: Davos truly is the biggest annual global political event -- and you can't underestimate how far actors will go to get their message heard on the global stage.

There are, of course, more technological and readily available avenues for communication that are boosting the reach and immediacy of messages around the world. This is a theme I'll continue to discuss in conjunction with global democratic trends.

Mugham melancholia notwithstanding, I have yet to make time for the CD itself -- Davos has done its best to keep me busy. And I'll do my best to keep you posted.

We've talked about the need for new models of global governance as we explore this transition period at a forward-looking Davos summit. Let's delve deeper and unpack the trend toward regionalism that we're already seeing, as highlighted in the WEF's Global Agenda Council report.

As I've discussed, old institutions are increasingly ineffectual when it comes to supplying global leadership. We have institutions that are relics from the post-WWII era -- including the IMF and the U.N. -- that haven't kept up with the evolving threats they are tasked with addressing. More recently, G20 collaboration among world leaders proved fleeting, limited to financial crisis response.

At the same time that institutions are waning, a global power vacuum is undermining the ability for any nation or durable alliance of nations to set the international agenda on their terms. Diminishing international coordination of all kinds comes precisely when the need for it is at a premium, with more challenges that transcend borders than ever before: climate change, cyber-threats, and the proliferation of nuclear weapons, to name a few.

So how do these global trends tie into a rise of regionalism?

We're witnessing a sweeping return to geography as a primary organizing principle for international politics. A nation's regional placement will increasingly determine its friends and enemies, trading partners, and policy objectives. Countries are already gelling in new ways on a regional level -- or at least attempting to -- as they fill the void left by global institutions with more granular coordination within limited spheres of influence. This will extend beyond nations to institutions, as regional bodies pick up some of the slack from their obsolete global counterparts. They will be organized in their region's self-image, promoting and reflecting narrower interests that contribute to the ascendancy of neighborhood governance.

But this isn't just sliced and diced global governance in keeping with the old model. We won't merely see localized globalization, where the free flow of information, goods, and people plays out regionally instead of globally. More importantly, we'll see how the degree of cohesion in each region -- and what exactly these nations cohere around -- will differ around the world.

Some groupings are more formalized -- the European Union is the most formal and mature integration of states. There's significant institutional capacity at a regional level. Others will be more informally arranged, such as Eurasia, where sheer power dynamics drive cohesion. This is also a more coercive arrangement, where Russia acts as a local hegemon that imposes integration on unwitting neighbors that may or may not benefit but don't always have the capacity to hedge against it.

Likewise, the rallying points that produce coordination of all stripes -- formal or informal, voluntary or coercive -- will be different all over. Every region will have a unique mix of security, energy, economic, political, cultural, and religious concerns that inform the process. We see the Middle East operating largely along sectarian lines, with the Arab League and GCC serving as regional forums and Sunni-Shia conflicts informing regional politics. The EU coheres more along economic and political lines. Asia splits between two opposing trends: economic integration with China, and political/security integration between the United States and China's neighbors as they look to offset it. Eurasian states integrate with energy and security at the heart of it.

The rise of regionalism isn't a good development for the broader challenges that global institutions can't handle in the first place. After all, even the most integrated region cannot address climate change without a broader coalition of support. Bottom line: regional governance beats none at all. But it will leave a mess of important problems unsolved.

Ian Bremmer is president of Eurasia Group and author of End of the Free Market: Who Wins the War Between States and Corporations?

With this week's Davos edition of The Economist, the concept of state capitalism has now graduated from provocative idea to conventional wisdom. The magazine's report on this trend is a must-read.

What exactly is state capitalism? No one knows better than Chinese and Russian leaders that communism doesn't work. They know from personal experience that the state can't engineer lasting long-term growth and that markets are crucial for the rising standards of living that autocratic governments must deliver if they are to remain in power. But these leaders also know that if they simply let markets decide who wins and who loses, they deny themselves control of the money needed to keep people in their jobs and off the streets in times of trouble -- and they risk enriching and empowering some who might use their newly won wealth to challenge for political power.

The goal of state capitalism then is to allow the state to play the largest possible role in controlling the wealth that markets generate within their borders. China, in particular, has used state-owned companies, privately owned national champions, sovereign wealth funds, and state influence over bank lending to build a powerhouse economic engine that its political leaders continue to drive.

This is a subject close to my heart. In fact, I've been invited to take part in an online debate on The Economist's website in which I argue that state capitalism is not a viable long-term alternative to the free market variety.  In general, I was impressed with The Economist's excellent comprehensive coverage of this trend.

Until the very end of its report.

The Economist argues that "both for their own sake, and in the interests of world trade, the practitioners of state capitalism need to start unwinding their huge holdings in favoured companies and handing them over to private investors. If these companies are as good as they boast they are, then they no longer need the crutch of state support.

It's no surprise that The Economist would argue against the use of this system. Pretty much everyone here at Davos who is not part of the Chinese, Russian or Gulf Arab delegations would agree. I know I do. But The Economist is telling China's leaders to immediately begin shedding the system that has made their economy the second largest in the world while helping them maintain their monopoly hold on political power-and to opt instead for the brand of capitalism blamed for the financial crisis, the global recession which followed, America's economic malaise, and the Eurozone's current crisis of confident. While we're at it, why don't we ask the Chinese leadership to become a "responsible stakeholder."

As I've said, I agree entirely with the larger point that state capitalism is not a viable long-term alternative to liberal capitalism, but there is no reason for the governments that use it to ditch it this year. 

Why not? Look again at China. The vast majority of its state-owned enterprises and privately owned national champions lag far behind multinational corporations in access to state-of-the-art technology, branding expertise, and market share. They still have work to do and can use every advantage their government can provide to narrow the gap with their foreign competition. In addition, China remains a hugely important market for foreign companies and investors. This provides Beijing with the leverage needed to help more Chinese companies find their footing.

In other words, China has not exhausted its opportunities to "level the commercial playing field" (from China's point of view) or "further stack the deck" (from everyone else's). 

One day, the changing competitive landscape in China will make that market much less attractive for outsiders, and things will have to change. A rising standard of living will make China's plentiful labor and capital much more expensive, encouraging companies to look elsewhere in Asia for these advantages. This process is already underway, and even some Chinese companies are joining their foreign competitors in opening up shop in places like Vietnam, Thailand, Indonesia, Malaysia, and the Philippines.

In the end, the Chinese government will have to liberalize its economy. It won't be easy, because all these state-owned companies will have their defenders within the political elite and the bureaucracy. But for the time being, it is clearly in China's interest to stay the course awhile longer.

Not that China's leaders care very much what we think.

Ian Bremmer is president of Eurasia Group and author of End of the Free Market: Who Wins the War Between States and Corporations?