Illustration: Peter C. Espina/GT
On November 10, 2001, the WTO approved China's accession at its Fourth Ministerial Conference in Doha. Since then, China and the world economy have both benefited from globalization - unprecedented capital flows, rapid technology advances and wide-ranging political and cultural exchanges. However, since the 2008 global financial crisis, globalization has been plagued by doubts and challenges, made all the more apparent in 2016 with Brexit, Trump's victory and prevailing political extremism in Europe.
In recent years, de-globalization has received serious thought. This reversal of globalization lays bare the angst resulting from globalization that comes at the expense of self interest. Turning back on globalization also cuts into politics, economics, trade, technology and culture on a global scale. Furthermore, de-globalization depicts the envy, jealousy and hatred feeding through the production and distribution of astronomical economic benefits that have been enabled by globalization. One explanation for this movement is that the past 30 years of globalization have undeniably pushed world economic growth, prompted broad-scale flows of goods, people, capital and information, and therefore been a gospel of prosperity in many parts of the world, but meanwhile many other people have lost under globalization. In parts of the US, the UK, France and other European countries deteriorating economic status and shrinking social welfare has transformed a laundry list of grievances into a perfect storm that has swept through these countries and regions and even into the international political sphere.
As the Trans-Pacific Partnership (TPP) developed, analysts suggested back in 2011 that it was the toughest challenge China had to face since its WTO accession. But few would have anticipated that only five years later the economic pillar of the US' Asia strategy would encounter unswerving resistance. Looking back, it has become apparent that political and economic initiatives built on erroneous estimations of economic development and social evolution can't withstand widespread resistance.
Even for emerging economies, globalization is not always good. With oil prices plummeting 70 percent over 2015-16 and other major commodity prices falling by roughly half from previous levels, energy and raw material exporting countries including Brazil, Russia and Saudi Arabia have taken a big hit. The acute economic fluctuations have even led to political destabilization in some countries. Countries reliant on manufacturing exports have also faced pressure during this period, as globalization means domestic production activities are highly linked to the world economic situation. According to the World Trade Statistical Review 2016 released by the WTO earlier this year, global trade growth stayed sluggish in 2015, with the volume of world trade growing by 2.7 percent, roughly in line with global GDP growth of 2.4 percent. Export prices, however, fell by 15 percent last year and the dollar value of world merchandise exports also shrank 14 percent, per the WTO data. Prior to the 2008 crisis, global trade growth had, for several decades, maintained a pace double that of global economic growth. But since 2010, global trade has expanded at only the same pace as the world economy - or in some years, even more slowly, an indication that the trade engine that once led world economic growth has almost flamed out.
Many people tend to believe that the push for de-globalization is only indicative of dents and dings on globalization at a given time and that once the world economy is back on track globalization will continue to serve as a beacon. However, the world economy will still be subject to the impact of de-globalization in the near term.
Nevertheless, if the current political and economic turbulences are just the halftime in globalization, China is actually in a good position to rebalance itself. The Chinese economy has undergone phenomenal growth over the past 15 years, but the side effects of its old development mode still remain. In a globalized world, China, as the world's second-largest economy and the world's largest trading nation, can't entirely separate its monetary policy, fiscal policy, asset prices and environmental policy from the world market. In fairness, globalization should be held accountable for the country's mismanaged income distribution, distorted asset prices and also deterioration natural environment.
China holds a special place in de-globalization in that the economy has the potential and capacity to offset negative impacts originating from the US in the arena of ultimate consumers and outbound investment. As such, China should fully exploit its rapidly growing consumer market as well as the unprecedented opportunities for it to gain momentum in investing overseas, in an effort to solidify economic growth and drive innovation while constructing a world economic cooperation regime befitting China's interest. This will lay the groundwork for the rise of China and the revival of the Chinese people over a relatively long period of time. So far China has prospered impressively in the global market yet it is haunted by various problems. Now additional adjustments going forward will help propel it toward further success.
The author is an assistant research fellow at the National Institute of International Strategy of the Chinese Academy of Social Sciences. firstname.lastname@example.org