This year has witnessed a number of events which have raised questions about the future course of globalization, with Britain’s vote to leave the EU and the election as the US president of Donald Trump being the most prominent ones. All these have prompted discussions about a new trend of anti-globalization. Has something gone wrong with globalization?
This year marks the 15th anniversary of China’s entry into the WTO. As to how to perceive globalization, we have tried to do an analysis and come up with some suggestions. If we look closely at the proportion of cross-border investment in GDP reported by UNCTAD, we can see that there is no major change indicating a backspin. We know we’re still on track of globalization.
It conforms to the laws of nature and so no event can reverse the trend. In history, there is a precedent of politics reversing globalization around the time of Great Depression. When the Second World War ended, efforts like the Bretton Woods system and General Agreement on Tariffs and Trade aimed to rectify the wrong decisions by political institutions and bring globalization back on track. So, we believe the trend would continue.
As for a big event like Brexit, I don’t regard it as an act of de-globalization, because the problems of the European Union do not represent the problem of globalization. The refugee problem is behind Brexit and the refugee problem comes from geopolitics.
On September 17, 100,000 people marched to protest against the TTIP. I don’t think it is de-globalization because Germany has been actively advocating for free trade. The country is against the TTIP advocated by the US. So, we should not simply define all these as efforts of de-globalization.
Trump has made remarks that are against globalization, but his rhetoric is not based on science. However, superstructure does not come from nowhere; the Trump theory must have its social and economic foundation.
Let’s pay attention to two issues. One is that technological progress has affected employment and the other is that there is an ever-expanding gap between the rich and poor. In the US, the gap is really extensive, especially when we include the financial magnates. They get rich overnight. We may ask if it is free international trade and globalization that have led to the result. No. These are just reflections of the law of capitalism.
Globalization is going on and we have the fourth industrial revolution around the corner. At this year’s World Economic Forum, Professor Klaus Schwab put forward the terminology of the fourth industrial revolution, catching widespread attention. Globalization would not make a U turn but continue to march on.
China, as the second-biggest economy and one of the top trading powers, must continue to push globalization, which aims to liberate productive forces and promote technological progress. And we must uphold free trade as well.
The WTO must keep pace with the times, to reflect the latest scientific and technological development. And we need new rules to reflect changes in international trade. If we stick to old ways, we could not complain being ignored by others. If it fails to keep up with the time, the WTO would be marginalized due to its own fault rather than the challenge from regional trade.
He Weiwen is the vice director of the Center for China and Globalization.
(Opinions expressed in the article don't represent those of the Sino-US.com.)