Scholars' views

Explore New Coordinates for "Inclusive Economic Globalization"

Since the international financial crisis in 2008, trade protectionism has been on the rise. The anti-globalization thought and actions have been intensified after the election of Donald Trump as US president in 2016 and the Brexit referendum in the UK. In particular, in the past two years, global trade conflicts and the impact of COVID-19 have caused major setbacks to the economic globalization process that gradually peaked in the 1990s.

The anti-globalization trend includes both the left- and the right-wing. The left-wing trend embodies obvious anti-capitalism, anti-international organizations, anti-transnational corporations, anti-Americanization, and other features. The right-wing trend preaches national supremacy, identity, anti-free trade, anti-immigration, and anti-establishment. At present, the emergence and spread of national primacy, trade protectionism, populism, economic nationalism, and unilateralism in the developed countries represented by the United States reveal that they are confronting an increasingly serious political crisis, economic conflict, and social tears.

The questioning and opposition to economic globalization mainly come from two indisputable facts. First, the income-distribution structure in most countries has been deteriorating in recent years, especially in high-income countries where the inequality degree is increasing. Although the capital-dominated economic globalization has brought great wealth and efficiency, it also leads to significant differences in income and distribution. New international production systems such as trade, capital flows, offshore outsourcing, and global value chains have gradually increased the income ratio between capital and labor, skilled labor and unskilled labor, high-income class and middle- and low-income class, and emerging industries and traditional industries, which eventually triggers serious domestic political and social imbalance. The second is the national security concerns raised by COVID-19. While having an impact on global mobility and integration, the pandemic spurs countries to attach importance to risk management of the global value chain, prompt high-risk manufacturing (such as epidemic prevention supplies and equipment) backflow, strengthen the domestic supply system and import substitution, and increase the economic self-sufficiency level to comprehensively deal with traditional and non-traditional security shocks.

Is this the end of economic globalization? Throughout history, the basic driving force of globalization is capital expansion, with two key factors for its development conditions: Technological progress, especially the reduction of communication and transportation costs, and opening-up policies and system coordination and cooperation of various countries. It should be mentioned that some reversals have taken place at the policy and institutional levels. In particular, the US is trying to reshape the international order through unilateralism, challenging the existing WTO system and causing trade frictions. But in general, the market forces of globalization are still present and strong, and the fourth industrial revolution, represented by artificial intelligence and digital technology, is in the ascendant. Though the COVID-19 pandemic has slowed physical integration and mobility, digital transactions are rapidly increasing, and the technological conditions on which globalization depends have further improved. Therefore, although hyper-globalization has come to an end, globalization has not, and the world has entered an era of slow globalization.

The lessons of the anti-globalization trend and the new trend of globalization development call for a new globalization model. Different from the previous market-oriented and value-based single model, it's a new globalization that is development-oriented, instrumental-based, emphasizing inclusiveness and pluralism, and giving consideration to efficiency and fairness. We should take a full account of the differences and development sovereignty of countries, consolidate the domestic governance system of national states, pay more attention to inclusiveness, equality, and sharing, strengthen social safety nets and safety valves, and make education and job markets more flexible. China's successful development experience and the Belt and Road Initiative provide an important source of ideas and practices to explore a new inclusive globalization path and will lead the globalization process into the new era by maintaining an open multilateral cooperation system, deepening institutional openness, eliminating poverty, breaking through infrastructure development bottlenecks, and accelerating negotiations on new international economic and trade rules.

Source: International Business Daily