The epidemic has spread around the world and has not subsided yet. It continues to impact the social economy of many countries and continues to affect the development trajectory of the industrial chain. During the epidemic, trade frictions between some countries have deepened, and the reform of multilateral economic and trade mechanisms such as WTO has remained stagnant.
People are beginning to worry about whether the epidemic will set off a wave of anti-globalization, and what profound changes have occurred in the global industrial chain?
Chinese Academy of Social Sciences Xu Qiyuan and Dongyan team proposed in the recently published Pushan Book Series "Reshaping the Global Industrial Chain - China's Choice": The relationship between the new coronavirus pneumonia epidemic and economic globalization is an important factor in assessing the future global The basis for the direction of industrial chain reconstruction. The COVID-19 epidemic has led to simultaneous declines in global supply and demand, fractures in value chains, and differentiation and opposition in ideologies and values of various countries. It is changing the foundation of global development characterized by the transnational allocation of factor resources.
The author briefly sorted out four representative views on the direction and trend of globalization after the epidemic-"limited globalization", "re-globalization", "slow globalization" and "digital globalization". On this basis, Xiaoxin consulted the information and expanded and extended the above four representative views.
Xiaoxin found that the epidemic was not the dominant factor in the reversal or change of globalization, but rather deepened the challenges that globalization had already faced before the epidemic; the above four judgments on globalization trends are not independent of each other; The relationship between mutual penetration and influence; the globalization of the past was not perfect, and the globalization of the future may not be a continuation of the traditional form of globalization, but a new form of connecting the world through changes.
1. Limited globalization: For the sake of supply chain security, and to keep taxation and employment at home
"After the epidemic, the world will usher in 'limited globalization'. " Professor of the Chinese University of Hong Kong (Shenzhen), Qianhai International Affairs Zheng Yongnian, dean of the institute, has put forward this point of view in many speeches and articles.
He believes that Since modern times, the world has experienced two waves of globalization, and is now entering the third wave of globalization, that is, "limited globalization":
The first wave of globalization was led by Europe, from 1875 to 1914 In 1999, the First World War was ended by and . During this period, the West had evolved economic liberalism. The close investment and trade exchanges between European countries are the Golden Age of the West.
In the 1980s, the Reagan-Thatcher revolution began, triggering the second wave of globalization. This wave of globalization is called "hyper-globalization" by Professor Danny Roderick of Harvard University. This era was accompanied by the loosening of financial controls, and the flow of production factors including capital, technology and part of labor everywhere, and the degree of economic freedom around the world was very high.
The result of this is that on the one hand, technological progress and the global allocation of production factors have indeed created huge wealth for the world; on the other hand, it has also widened the gap between the rich and the poor. This gap between rich and poor exists between countries and within a country. It is even more obvious in the United States. It has severely torn society apart and ultimately led to the emergence of and Trump.
He explained Apple Company as a case representing hyper-globalization - Apple Company has unique technical advantages in the research and development of product , but all its production links are outsourced, which results in its employment and tax revenue in the United States. Its contribution is far less than that of Ford. Since the 1980s, due to the existence of more and more large multinational companies like , apple, , the situation of the American working class has become increasingly difficult. Their roles have been replaced by workers from developing countries, and the size of the middle class has shrunk.
Pierre Olivier Gourancha, chief economist of the International Monetary Fund (IMF), believes that globalization has never been completely happy, although it has lifted hundreds of millions of people out of poverty. It also comes with the problem of redistribution of wealth between and within countries. These distributional inequalities have prompted accusations from anti-globalists.
Zheng Yongnian believes that the world entered the era of "limited globalization" starting from the election of Trump as President of the United States in 2016. This round of globalization can never return to the "hyper-globalization" form of the Reagan-Thatcher revolutionary era in the 1980s. Today, various economies are facing more and more practical problems in the flow of capital, technology, and personnel.
However, Zheng Yongnian believes that globalization will not be interrupted, but will continue in a "limited" way. The so-called "limited" mainly means that sovereign countries must make major adjustments to the layout of capital, supply chains, and labor to achieve an appropriate balance between the effective allocation of resources and taking care of domestic interests.
"In this case, on the one hand, we can see that developed countries are beginning to try to move some of their supply chains back to the country, or distribute them at multiple points around the world." Zheng Yongnian analyzed that the idea of rearranging the supply chain has been supported by the United States, Singapore , the United Kingdom, EU , Japan and other developed economies have generally supported it - they have tried to deploy some production capacity to Vietnam or other Southeast Asian countries to reduce their dependence on a single origin, especially China. This kind of move is not only due to epidemic prevention and control reasons, but also has certain economic considerations. Although production costs are higher in the country, keeping companies in the country means more tax revenue and employment.
But on the other hand, these attempts have only achieved limited results in very limited areas. Zheng Yongnian proposed that as long as China continues to maintain and expand its opening up, comprehensive "decoupling" is empty talk.
2. Re-globalization: Who is leading the global economic recovery?
Before the outbreak of the COVID-19 epidemic, globalization had already revealed various problems. The rise of populism, nationalism, and isolationism challenged the existing international economic order and plunged globalization into a low ebb. The COVID-19 epidemic has deepened these problems. negative impact.
Will globalization end? Many experts gave a negative answer. Globalization is still the trend of the times and the general trend, and it will not end.
“Globalization has not stopped, nor has it been reversed. Instead, it has changed its form and started to center on emerging countries. It has begun to think about the mutual embeddedness of economy and society from the perspective of the bottom or developing countries. ” Peking University International Wang Dong, associate professor of the School of Relations, and Cao Dejun, a Ph.D. of the School of International Relations of Peking University, co-authored "Reglobalization: A New Perspective on Understanding the Interaction between China and the World":
For a long time, China, India, Brazil, , Russia, Emerging economies such as South Africa continue to carry out domestic reforms in order to integrate into the Western economic order. When the Western economic system experienced a crisis, these countries started to reshape Western rules. This was a situation that had never been encountered in 500 years: that is, globalization began to be driven by developed countries and shifted to developing countries, especially emerging countries. promote.
This is why the BRICS and G20 meetings have attracted so much attention from the world. Although the West is still at the core of the international system, it is not these core countries that are leading the reform trend, but those countries that were once on the edge of the system and are now rising as emerging powers. This is the transformation of the momentum of globalization, from developed countries to development. Chinese home.
The author calls this process "Re-globalization" and defines the concept of re-globalization as the reform of the globalization process by emerging countries represented by China, and the consequences of this reform. Model upgrade and expansion effects.
The book further explains:
Traditional globalization is based on the "center-periphery" economic structure. The " scissors gap" caused by the trade of industrial products and raw materials between developed countries and peripheral countries constitutes unfair globalization. one of the roots. And when emerging countries rise in an all-round way and China becomes the largest trading partner of developed and developing countries, the "binary pattern" of globalization will evolve into a "ternary pattern": developed countries - emerging countries - peripheral countries are interconnected. status. This interconnection of the three worlds will transcend the opposition between high-level globalization and low-level globalization and narrow the hierarchical gap between the center and the periphery.
Why use "re" instead of "new" to define the current "globalization" process? Because the global expansion promoted by China and other emerging countries is not a completely new beginning, but an internal reform to upgrade the existing international architecture, which is part of China's embedded rise.
The author pointed out that in "re-globalization", emerging countries play a bridging role in global governance by actively providing public goods, bridging the gap between low-level globalization and high-level globalization. For example, during the COVID-19 epidemic, China provided the world with a large number of public goods in the field of public health, such as important experience and expertise in fighting the epidemic, as well as foreign aid medical teams. China also exported a large amount of anti-epidemic materials to countries around the world. The public goods provided by China during the epidemic prove that the "re-globalization" model led by China has the characteristics of inclusiveness and sharing. More importantly:
China, through its own organizational mobilization, overall coordination, and implementation capabilities, not only took the lead in achieving initial control of the new coronavirus epidemic, but also proved in practice that technological progress and its universal application can provide control The measures necessary for the epidemic drive human society to evolve into a safer and less vulnerable form when facing biosecurity challenges. This means that China will better provide public goods and provide economic and social driving force in the field of technology, and promote the recovery of globalization through "re-globalization".
3. Slow globalization: The trade-led growth model is severely challenged
In the era of hyper-globalization, multinational companies have expanded and promoted the formation of domestic industrial chains and value chains through production and operation methods such as technology spillover and supplier localization. The globalization of the industrial chain has promoted the trade-oriented growth model to enter a new development period, and global trade in goods and services has become the engine of world economic growth.
The "2013 Trade and Development Report" released by the United Nations Conference on Trade and Development shows that in the past 20 years, those countries that have managed to increase their participation in global value chains and export products have experienced an average growth of 3.4% in per capita GDP ; Countries that only increased their participation in global value chains without upgrading domestic value chains only saw average GDP growth per capita of 2.2%.
According to data from the International Monetary Fund (IMF) Global Economic Outlook Report (WEO), before the 2008 financial crisis, the simple average year-on-year growth of global trade in goods and services from 1990 to 2007 was 7.0%, which was much higher than the simple growth rate of the world economy. The average growth rate is 3.7%. After the outbreak of the financial crisis, global demand weakened and global trade growth declined sharply. The two-year average negative growth rate from 2008 to 2009 was 3.9%, which was lower than the global two-year economic growth rate of 1.1%.
Wang Jinbin, executive deputy secretary of the Party Committee of the School of Economics at Renmin University of China and researcher at the National Academy of Development and Strategy, wrote that as some important economies introduced anti-crisis measures, the world economy and trade resumed growth, but the simple average from 2010 to 2018 The growth rate was only 5.0%, and the global GDP growth rate during this period was 3.8%. In 2019, the growth rate of global trade in goods and services was only 0.91%, while the global economic growth rate was 2.8%.
The global spread of the COVID-19 epidemic in 2020 has had a serious impact on the world economy. Citing data, he said:
To this day, the epidemic has not completely dissipated. The two-year average growth rate of global trade in goods and services from 2020 to 2021 is only 0.3%, while the global economic growth rate during the same period is approximately 1.0%.
It can be seen that since 2008, the growth rate of world trade has declined sharply, and the trade growth of the global value chain (GVC) based on the industrial chain has stagnated or even declined. Especially due to the impact of global trade frictions and the COVID-19 epidemic since 2018, global trade growth has almost stagnated. According to the WTO's forecast, global trade will grow by 4.7% in 2022, which will once again exceed the predicted global economic growth rate of 4.1%. World trade is struggling to move forward amid twists and turns, and globalization has entered the era of slow globalization from hyper-globalization.
In the era of slow globalization, what new characteristics does the global industrial chain show? Wang Jinbin believes:
Since the global financial crisis in 2008, global trade has grown slowly and the expansion of global value chains has stagnated. The trade-led growth model has been severely challenged. Conflicts between major countries may have led to the reduction or fragmentation of global value chains. .
According to WTO data, since monitoring of the accumulated unrestricted restrictions began in 2009, import restrictions began to grow in 2009, and there was a significant increase in 2018 after the global trade friction escalated. At the end of 2020, approximately 8.6% of world imports were affected by import restrictions in place since 2009. As of mid-October 2021, the global effective import restrictions are approximately US$1.5 trillion, accounting for about 8.7% of the world's total imports.
The sharp decline in global trade growth and the correction in the participation rate of global value chains, especially the impact of trade conflicts and the epidemic, have exposed the fragility of some global industrial chains and supply chain links. For the sake of security and competition, countries around the world have localized and regionalized industrial chains to accelerate the globalization of alternative industrial chains. The migration, adjustment and reconstruction of industrial chains will become a prominent feature of globalization in the post-epidemic era.
However, he also pointed out that the localization trend of the industry chain does not mean that the industry chain is completely localized. The trend of regionalization and localization requires security in key industrial chains. Under the conditions of controllable regional division of labor and collaboration, a relatively complete industrial chain can be established in the surrounding area through regionalization. This can still be achieved in the links of the industrial chain. Globalization and diversification of suppliers.
He cited as examples the "Comprehensive and Progressive Agreement for Trans-Pacific Partnership" (CPTPP) that came into effect on December 30, 2018, the "United States-Mexico-Canada Agreement" that came into effect on July 1, 2020, and the "United States-Mexico-Canada Agreement" that came into effect on January 1, 2022. The officially effective " Regional Comprehensive Economic Partnership Agreement " (RCEP) is an important regional or cross-regional economic relationship agreement that has emerged since the global trade conflict in 2018. It is based on the globalization pattern based on regionalization. is accelerating, and the regionalization and localization of the industrial chain is becoming a reality.
4. Digital Globalization: "Going abroad" is no longer important
Throughout the history of globalization waves, there are at least two driving forces behind the economic support. One is the global flow of products, and the other is the global flow of capital. Some scholars believe that now, the third engine is emerging, which is the global flow of data. Some people believe that the most valuable thing in the world is no longer oil, but data.
"Globalization in Change" released by the McKinsey Global Institute (MGI) shows that although globalization has slowed down at the trade level, globalization itself has not regressed, but is on a new path. Today's globalization It is driven more by digital technology , and is increasingly led by emerging countries such as China. Data flow will become the "connective tissue" of the global economy. Data flow will drive the flow of other production factors. At the same time, digital technology is increasingly becoming a platform that creates opportunities for enterprises.
Yan Haowen, a research assistant and policy analyst at the Institute of Public Policy of South China University of Technology, believes that future globalization may have some characteristics - a high degree of digitalization and intelligence and increasingly becoming the main driving force for development. Digital technology has become the main driving force of economic development. Globalization, once primarily measured by cross-border trade in goods and financial activity, is now increasingly integrated with digitalization.
He said that current data research has found that broadband usage has increased by 45 times in the past decade, supporting vibrant business activities, and is expected to increase by 9 times in the next five years. The value created directly by data flows is higher than that of foreign direct investment. Considering its direct and indirect effects, the contribution of data flows to GDP has exceeded that of global commodity trade. Data flow not only creates value, but also changes traditional business. Half of the world’s services trade has been digitized, and this proportion is growing.
When digital technology becomes the main driving force of globalization, what impact will it have? Yan Haowen believes that although the current global supply chain has been impacted by the epidemic and anti-globalization, the digital and intelligent era itself is also innovating the value chain. Among them, the demand for personalized customization and rapid delivery of on the demand side, and the reduction of dependence on cheap labor by intelligent manufacturing and automated production technology on the supply side have accelerated the trend of reshoring and rearranging the industrial chain.
"Forbes" biweekly contributor Mike O'Sullivan believes that the idea that technology is changing the nature of economic activity is very important and provides clues about what will replace globalization. For companies, globalization means that they can optimize their business processes through interconnected networks: factories in Mexico, R&D in Zurich, headquarters in Berlin, and marketing experts in Barcelona. Provide inspiration and sell products to North American consumers.
He pointed out that the fact that cheap labor no longer exists, the rise of protectionism and the advancement of robotics technology are likely to mean that the trend of "going abroad" is slowing down. Even more interesting is the situation for consumers and workers: for the most part, they are "going home", able to work in the city of their choice and consume more services online (from legal advice to virtual fittings ), which makes them feel more free.
Yan Haowen believes that under this trend, globalism may give way to regionalism, global connections will weaken, and the flow of offline production factors such as goods, personnel, and capital at the global level will slow down, while regional cooperation has received more attention. All parties will increase investment in the region, regional cooperation will show a momentum of deepening development, and the degree of regional integration will deepen.
In general, Yan Haowen said: "When we look at it from a macro perspective, the slowdown in the globalization process in the past ten years and in the next few years is just that human society has once again entered a stage of adjustment. It is far from At the moment of collapse, just like every time human society experienced a disaster in the past, it ushered in a change and built a new way of connecting the world. Today, we may be ushering in a newer form of globalization."
Conclusion
Finally, Xiaoxin would like to use the summary of the judgment of the trend of globalization in the book "Reshaping the Global Industrial Chain - China's Choice" as a conclusion -
"In general, the factors of production dominated by developed countries The 'hyper-globalization' characterized by high-speed flow and optimized allocation on a global scale has receded. However, factors such as the development of digital economy and artificial intelligence , the increasing ability and willingness of emerging economies to participate in global governance, the industrialization process of developing countries and the objective need to integrate into the global economic division of labor will continue to support the development of globalization. Future globalization is a globalization in which multiple forces compete and weigh against each other. The global industrial chain will also find a new steady state under the weighing of multiple factors such as technology, market, cost, competition and government. "█
References:
1. "Zheng Yongnian: Limited Globalization and the Future of Hong Kong (Part 1)"; Greater Bay Area Review.
2. "Wang Jinbin: New Trends in Industrial Chains in the Era of Slow Globalization"; "Academic Frontiers" Magazine.
3. "Reglobalization: A New Perspective for Understanding China's Interaction with the World"; Wang Dong, Cao Dejun.
4. "Yan Haowen: A Preliminary Study of the Next Stage of Globalization";
5. "Can Digitalization Become the New World?" Globalization?"; Reference news.
6. "IMF Chief Economist: Globalization faces two possible paths"; Reference news.
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