Divergence between China and the US in globalization signals uncertainty for world economy

By Wang Jiamei Source:Global Times Published: 2017/9/3 21:13:40

Amid the co-existence of globalization and protectionism, China and the US, the world's top two trading nations, are headed in completely opposite directions in world trade, which poses great uncertainties for global governance.

Since US President Donald Trump took office, overhauling "horrible" trade deals has become a key item on his economic agenda. According to recent media reports, Trump is considering pulling the US out of a free trade agreement with South Korea, with the White House expected to issue a notification of intent to withdraw as soon as Tuesday. Trump has labeled the agreement, which took effect in 2012, a bad deal, the AP reported on Sunday.

Meanwhile, the US is holding the second round of renegotiations of the North American Free Trade Agreement with Canada and Mexico, which started on Friday in Mexico City. Last week, Trump said that he may terminate the pact to get a "fair" trade deal with Mexico and Canada.

While the Trump administration is sending a clear message about pulling the US out of multilateral or bilateral free trade deals and seeking to gain more benefits through the "America first" approach, China is committed to establishing and safeguarding the multilateral free trade system. As Vice Commerce Minister Wang Shouwen told a press conference ahead of the opening ceremony of the BRICS Xiamen Summit on Sunday, the meeting by the BRICS (Brazil, Russia, India, China and South Africa) is expected to make eight achievements in trade and economic cooperation, including a consensus on supporting the multilateral trade system and opposing trade protectionism.

Wang also mentioned at the press conference that China is studying the feasibility of a free trade deal with Canada and is interested in holding exploratory talks with Mexico in this regard.

As the world economy remains on a lackluster recovery track, greater economic globalization is needed more than ever to generate stronger and more inclusive growth. Trade protectionism is the last thing the world needs, and it could undermine any rebound in trade and slow the overall recovery process. With the old global governance paradigm increasingly inadequate to deal with new global challenges, China has been playing a growing role in improving global governance, while the US has been trying to remain aloof. It remains to be seen how the role shifts between the two big powers will affect the global governance paradigm.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn

Posted in: EYE ON THE ECONOMY

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