The events of the past few months have set in motion a process which is increasingly leaning toward protectionism. As nations struggle to find that ever-elusive balance between free trade and conservatism, it is becoming increasingly clear that globalisation is under the most serious threat it has ever faced in recent times.
Globalization is a complex process that involves various aspects such as trade, investment, technology, culture, and politics. Globalization will continue to shape the world over the coming years.
The concept of globalization has faced significant challenges in recent years. It includes growing protectionist policies and the rise of nationalist movements. However, it is important to note that globalization is a complex and multifaceted phenomenon. Its impact on global economy and society cannot be reduced to a simple binary of success and failure.
China has emerged as a prominent player in the global trade and is actively trying to promote the idea of free trade. Chinese government has made significant efforts to liberalize its economy and to integrate itself into the global trading system. It has been a vocal advocate for open markets and international cooperation since its liberalization policies took over.
Since the reform and re-opening policy in the late 1970s, China has become the world’s second leading economy and the key exporter of goods. China has also been a member of world trade organization (WTO) since 200. China is actively participating in regional and global trade negotiations.
The period after World War II was marked by a frenzied focus on lifting archaic trade barriers. As Europe and USA witnessed a period of steady economic growth, the term ‘globalization’ gained acceptance and reverence. As a trade philosophy, it survived tumultuous and watershed moments in recent history, only to appear unscathed.
It is true that China’s trade policies have been a source of concern and tension for some of its trading partners such as the USA and European union. There are various issues that are antithetical to globalization on China’s part, however, which need resolution. These include forced technology transfer, state owned enterprise and subsidies. They have been raised in the context of China’s trade practices.
China’s rise as a global economic power has been remarkable, and it has made significant efforts to position itself as a champion of free trade. China has been actively promoting its belt and road initiative (BRI). It is a massive infrastructure project spanning Asia, Africa, and Europe. It aims to increase connectivity and promote trade and investment.
The period after World War II was marked by a frenzied focus on lifting archaic trade barriers. As Europe and USA witnessed a period of steady economic growth, the term ‘globalisation’ gained acceptance and reverence. As a trade philosophy, it survived tumultuous and watershed moments in recent history, only to appear unscathed.
Anti-Globalisation Sentiment Came to Fore in 2006-07
The global recession of 2006-07 brought to the fore a deep economic and social divide. While ordinary people struggled to make ends meet, behemoth corporations were bailed out by the government through taxpayer money. The fissures in the class divide became wider and more pronounced; questions were asked if globalisation was the root cause of all evil. While world leaders were successful in deflecting these concerns in the short-term, the seeds of anti-globalisation were sown in the minds of the populace. Years later, these pent-up emotions and anger largely contributed to populist moves, including Brexit and the election of Donald Trump, symbolising a tectonic shift from globalisation to localisation.
It would be an understatement to say that globalisation is under threat. Whether or not rhetoric is put into action, the foundation with which globalisation was marketed to the entire world has suffered a dent in credibility. However, as the people in the west look for an alternate to free trade policies that rob them of their employment, China, of all nations, is positioning itself as the new poster boy of free trade. While Theresa May and Donald Trump drop subtle hints of leaning toward the 21st century version of socialism, Xi Jinping is luring investors to look eastwards.
The United Kingdom Prime-Minister Theresa May, in her speech at the World Economic Forum in Davos, clearly supported the concept of ‘localisation’ stating that Britain should be country in control of its own destiny. Furthermore, in a bid to deal with the unemployment crisis in the USA, Trump is also seconding the concept of ‘localisation’, through which he believes citizens of USA will have the leverage to work in their own country. With consumer rights activist protesting against CETA and TTIP, the question remains that remains unanswered - is this a ‘wave of anti-globalisation’ or the bourgeoisie romanticism for ‘Trumpism’?
What China Stands to Gain and Lose
As popular anti-globalisation sentiment simmers, first-world governments are busy disassociating from the decades-old pro-business policies. However, not all is lost for global corporations as the heir apparent China is laying a red carpet for those who suddenly find USA and Europe anti-business. Addressing global leaders at the Global Economic Forum, China’s President Xi Jinping said that Beijing will take the onus to carry the traditional pattern forward for globalisation. Instead of becoming a collateral damage in the anti-globalisation wave, China’s leaders may be effective in selling the nouveau version of globalisation that has a communist, pro-socialist tinge to it.
Even if China is successful in formulating free trade and pro-business policies, its status as the global manufacturing hub will come under threat in an ‘anti-globalisation’ political environment. China accounts for nearly one-eighth of the value share of total global exports. Protectionist trade policies in the USA and Europe can severely impact China’s exports, which consequentially, will have a bearing on its robustly-growing economy. How China tackles this double-edged sword remains to be seen.