In the last two years, affected by the political and economic situation of western countries, delocalization trend has constantly emerged. Over the past decades, by liberating market force, economic globalization promoted the emergency of global production system and accelerated the booming of international trade and production. Not only the boom and development comes with the globalization, it also brings poverty, conflicts, unequal distribution and environmental pollution. Eight years have passed since the outburst of financial crisis in 2008. However, instead of seeing a significant recovery, the global economy has been caught in a continued depression with the negative phenomenon of constantly upgraded trade protectionism, sluggish global multilateral mechanism and fragmentation of various regional trade and investment agreement. Meanwhile, American policies on immigrant, investment and supervision are walk toward the de-globalization. In the opinions of populism that sweeps the western countries, we need to seal off the borders and pay attention to our own business with great focus on nationalism. Their opinions are very popular among local people. It is in fact a phenomenon called de-globalization.
Root Course of De-globalization
The root course of de-globalization is that people’s sense of security was weakened by the inequality of economic growth and resource allocation caused by continued depression of the world economy. So people turn to the statesmen who advocate the populism for help and treat them as the life-saving straw.
First of all, public policies are good-for-nothing, which led to a long-term economic depression. The global financial crisis occurred in 2008 dealt a heavy blow to the world economy. Affected by the financial crisis, global GDP, trade volumes and investment were declined sharply. Represented by American and European Union, western countries have a greater economic fluctuation because of a higher degree of market access. The economic fluctuation has the following symptoms including the relative job reduction caused by technological progress, growing yield gap between capital and labor and great risks caused by the global movement of financial capital. Though people believes that great policy adjustment should be made to strengthen social protection. Affected by their thinking inertial taken shape during the rise period of globalization over the past decades, they discussed the policy in the same way as before, which not only has damaged the benefits of middle and lower class people, but also cannot curb the economic recession. It has led to a serious dissatisfaction with the public and the booming of anti-free-trade and anti-immigration trend in developed countries.
Secondly, inequitable distribution of resources has resulted in a phenomenon that the rich become richer and the poor become poorer. On the one hand, the wealth gap between the developed and developing countries gets wider in the process of globalization, for which the developing countries hold a negative attitude toward the globalization. The developed countries not only have the absolute advantages in economy, but also hold a leading position in formulating international economic and trade rules. Though the current international economic order and international economic and trade system have meet the interest demands of the developing countries to some degree. It is fundamentally in the interest of the developed countries. meanwhile, the developed countries gains supernormal profit by relying on their first-mover advantage. However, in order to acquire advanced products, the developing countries have to pay more economic costs, which also has led to the inequality distribution of economic development dividend in the world.
On the other hand, it is also hard for the developed countries to balance their benefit distribution. During the process of economic globalization, the elites hold more advantages in the distribution of dividend brought by the economic globalization. While the dividend for the middle-and-lower income group has decreased. With the development of economic globalization, the manufacturing industry of the developed countries has moved to the developing countries. the working class in the developed countries may lost their jobs or do the lower-income jobs. At the same time, with the growing capital intensity and a higher replaceability between the capital and labor, the proration of national income for the capital owners has increased. The rich gets richer and the poor gets poorer. The wealth gap in developed countries is the main driving force for the middle-and-lower income groups to oppose economic globalization and also the driving force behind the de-globalization.
Finally, immigration problems weakened the public’s sense of safety and make them has a feeling of being left behind. Immigration has been a major challenges for western countries. Taking America as an example, unskilled workers are greatly affected by job reduction caused by the immigration problems. in a great economic recession led by the global financial crisis in 2008, the American gross domestic product in the third quarter began to decline. in the year of 2010, its GDP has begun to grow. On the contrary, the American jobless rate rise to 4.7% in 2016, which is tantamount to the 4.6% of 2006-2007. Compared with the voters of other countries, with a weak social security system and weak job recovery, American voters are hard to endure economic recession. While in Europe, immigration brings a series of problems such as massive social conflicts. Immigrants with different religious and cultural backgrounds find it very hard to integrate the local society. Local people attribute the political, economic and social safety hazards coming with the immigration to the economic globalization. It is also one of the driving force behind the populism.
Phenomenon and long-term adverse effects of the D-globalization
Brexit vote is an outburst of populism. In recent years, refugees flooded into the Europe and brought various challenges to the European citizens, communities and countries, which stimulated the development of populism in Europe. Payed heavy price, governments of European countries also try to find solutions to the immigration problems. relations between the new immigrants and social groups of hosting countries has been increasingly strained. People at the bottom face various problems including job reduction and income inequality. Moreover, financial crisis makes their life more struggling. As the ruling class of the western world, the elites have the rule-making privileges. However, they also have to seek benefits for the public. Populism comes with people’s Dissatisfaction with their life and it strongly oppose elite politics. Brexit vote is a typical example of populism incident. Brexit vote stimulated the development of populism in many countries and this may strengthen the populism trend in global politics. Populism is very likely to make the de-globalization a reality.
As the trade protectionism gaining ground, free trade concept retreats. First, breakthrough is hard to achieve in multilateral trade system. Entering 21 century, more and more countries and regions joins in the economic globalization and trade liberalization. However, developed countries and developing countries differ in economic development and core demand. So they are less likely to reach common ground within the framework of World Trade Organization. Meanwhile, trade liberalization has a higher standard, wider scope and feature of exclusiveness. Currently, the challenge of free trade concept has turned from tariff reduction (initial stage) to the technical and institutional problems. As the developed countries keep adding protective provisions at multilateral trade negotiations. It becomes more hard to establish multilateral trade system. For example, fifteen years has past since the launch of Doha Development Round by the UN. There is less and less likely to reach common ground for the countries as time passed. secondly, as the world faces economic downturn and the trend of de-globalization, more and more countries will give up free trade concept and embrace trade protectionism. IMF data showed that 736 restrictive trade measures have been taken in the year of 2015, growing by 50 percent over the same period of last year and the three times than trade promotion measures.
Guiding and Adapting to the Economic Globalization
For all countries, economic globalization is a double-edged sword with both advantages and disadvantages. Great attention should be payed to the problems disclosed by the de-globalization. It reminds the government that while promoting economic globalization, great importance shall be attached to and rectify the imbalance and deviation. Just like president Xi has mentioned in his speech at the opening ceremony of World Economic Forum Annual Meeting 2017：“It is true that economic globalization has created new problems, but this is no justification to write economic globalization off completely. Rather, we should adapt to and guide economic globalization, cushion its negative impact, and deliver its benefits to all countries and all nations.” De-globalization at least reminds us to reflect on the existing institutions and policies so as to try to solve the problems occurred or being about to occur and to explore a better and new mode of development. China’s remarkable economic achievement should attribute to its open economy. Measures such as free trade, trade facilitation, foreign investment, attracting foreign investment and capacity operation have been always the driving force behind Chinese economic growth. As we are walking toward multi-polar world, western countries are entering the adjustment period of shrinking its economic globalization, which is also the adjustment period of economic globalization mode. Currently, Emerging market countries and developing countries gradually become the driving force behind the current economic globalization. Curbing the trend of de-globalization and promoting world economic development is not only the need of China’s development, but also the international community’s and in particular developing countries’ expectation on China. It also shows that China is ready to take its responsibility.
Therefore, we should make comprehensive research on the trend of de-globalization and follow the good advices from the waves of de-globalization. Besides, we also need to encourage people to have a scientific understanding on de-globalization so as to protect us from being affected by the false thought of western countries. meanwhile, we shall have a correct understanding on the current situation, strengthen strategic focus and unswervingly develop our open economy. In our opinions, we should do well in following issues:
First, we shall advocate the global governance principle of achieving shared growth through discussion and collaboration and comprehensively deepen reform. We should press ahead the economic globalization with an aim to achieve common development and the global economic governance based on the principle of achieving shared growth through discussion and collaboration. All countries can achieve common development through exchange including trade, investment and industrial division. Major countries have the duty to offer international public goods and stimulate the development of other countries. common development does not deny the role of global market in the allocation of resources. Instead, it focuses more on the role of market mechanism. We do not advocate any exclusive economic system based on market segmentation nor the political conditions and values constrains attached in economic cooperation. Instead, we advocate to establish a more open global market and matched multilateral governance mechanism, through which we seek a future of common development.
Second, we should continue to expand our scope of opening up to the outside world and actively participate in the formulation of international rules. Established by western countries, the current international operating mechanism is unfair and injustice. After the financial crisis in 2008, all countries actively participated in the global governance and the formulation of international rules in the hope of acquiring a bigger say and more profits in the structure of benefits distribution. With the rapid growth of economic strength and higher degree of integration into the world economy, global governance and its rules have a direct effect on the interest of China. Many countries not only hope the China could have a bigger role in global governance, but also want to restrain the China. As for us, on the one hand, we should be bold to shoulder the responsibility matched with our international status. On the other hand, we should know that the rule-making is consistent with the key points of market opening up and the long-term goals of our reform. So, we should participate in the global governance and the rules making work in a more open and active way. We should not only promote reform through opening up, but also press ahead with domestic reform, laying solid foundation for a higher-level opening up.
Third, we should establish a long-term mechanism of global economic governance. AS the core platform in which china and other countries join hands in global economic governance, G20 Summit played a very important role in coordinating macroeconomic policy and diffusing systematic risks of global financial market during the period of financial crisis. However, after the crisis, G20 Summit plays a limited role in promoting global economic recovery because it is underpowered and its topic for discussion is not so specified. So, the emerging market countries represented by China should make good coordination on the interest of various countries and lift the G20 Summit out of the predicament. Strengthening the functions of G20 Summit and establishing a long-term global economic governance mechanism are the key to push forward economic globalization and to achieve the transformation of global economic governance.
Fourth, we should achieve the transformation of economic globalization and global governance mode through the Belt & Road Initiative and BRICS Cooperation Mechanism. As the nation that first advocates Belt & Road Initiative and the major member of BRICS Cooperation Mechanism, China has the capacity and wiliness to maintain economic exchanges with the countries along the Belt & Road Initiative and BRICS countries in terms of trade or investment facilitation and financial cooperation. There are about 60 countries along the Belt & Road Initiative. A five-pronged approach (policy coordination, infrastructure connectivity, unimpeded trade, financial integration, and strengthened people-to-people ties) will lay solid foundation for belt and road countries to achieve deep exchanges with each other. It will also create a new driving force for the development of economic globalization and lay a solid foundation for us to transform economic globalization in a multi-polar world. Emerging market countries (represented by the BRICS countries who established the BRICS Cooperation Mechanism) are the driving force behind the transformation of global governance system. Traditional global governance system does not show the new changes of global landscapes and strength of emerging market countries. New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA) established by the BRICS Cooperation Mechanism are a kind of institutional innovation and the typical result of global governance system reform.
