Recommended reading: Parag Khanna's "Beyond City Limits" in the September/October Foreign Policy. While I definitely don't agree with everything Khanna says, it's the core concept here that's important -- the idea of a world where cities can be as important as nation-states:
New York and London together still represent 40 percent of global market capitalization. But look at the economic map today, and a major shift becomes apparent. Asia-Pacific financial hubs such as Hong Kong, Seoul, Shanghai, Sydney, and Tokyo are leveraging globalization to spur an accelerating Asianization. Money floods into these capitals from around the world but tends to stay within Asia. An Asian monetary fund now provides stability for the region's currencies, and trade within the Asian sphere has grown much larger than trade across the Pacific. Instead of long-haul flights, the story here is of low-cost carriers connecting planeloads of travelers from Ulan Bator to Kuala Lumpur to Melbourne.
Accelerating this shift toward new regional centers of gravity are port cities and entrepôts such as Dubai, the Venices of the 21st century: "free zones" where products are efficiently re-exported without the hassles of government red tape. Dubai's recent real-estate overreach notwithstanding, emerging city-states along the Persian Gulf are investing at breakneck speed in efficient downtown business districts, offering fast service and tax incentives to relocate. Look for them to use sovereign wealth funds to acquire the latest technology from the West, buy up tracts of agricultural land in Africa to grow their food, and protect their investments through private armies and intelligence services.
Alliances of these agile cities are already forming, reminiscent of that trading and military powerhouse of the late Middle Ages, the Hanseatic League along the Baltic Sea. Already, Hamburg and Dubai have forged a partnership to boost shipping links and life-sciences research, while Abu Dhabi and Singapore have developed into a new commercial axis. No one is waiting for permission from Washington to make deals. New pairings among global cities follow the markets: Witness the new Doha to Sao Paulo direct flight on Qatar Airways or the Buenos Aires to Johannesburg route on South African Airways. When traffic between New York and Dubai dried up due to the financial crisis, Emirates airlines rerouted its sleek Airbus A380 planes to Toronto, whose banking system survived the economic shake-up in better shape.
The topics Khanna covers range from a vast private city being built in South Korea to the urban squatters who "form functional, self-organizing ecosystems that are 'off the grid.'" Read the whole thing here.