Cui Hongjian: New balance being struck

China Daily | 作者: Cui Hongjian | 时间: 2020-07-13 | 责编: Wang Jiapei
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Although the international community is locked in a battle against the novel coronavirus, the post-pandemic global pattern has gradually shown a clear trend, as China starts to return to the normal track and things are looking up among Western countries. At the critical moment when the benefits from globalization still matter, the present global pattern will not move toward a new Cold War characterized by a full decoupling between the world's two largest economies. Instead, a new balance will be struck between market principles and political security concerns.

The pandemic has brought a halt to social life, wreaked havoc on economies, broken the balance of existing international relations and exacerbated the risk of imbalances worldwide. Pessimists even believe that the postwar situation "has never been worse than it is now", and that the public health crisis coupled with the economic shocks could lead to geopolitical confrontation that could result in the collapse of the global pattern and established orders.

There are lessons to be learned from the past century, when the world reaped the fruits of globalization, and reached a consensus on safeguarding common interests and preventing historical tragedies happening again. It is because of this that the international community is striving to find a new balance.

The pandemic has exerted successive impacts on regional economies such as that of East Asia, Europe and North America. The large-scale lockdowns and shutdowns and unsynchronized resumption of production have aggravated the economic dilemma faced by countries of whether to restart their economies or not. The partial breakdown of the industrial and supply chains has also exposed the fragility of the globalized industrial layout and its vulnerabilities. These vulnerabilities have been highlighted by the general shortage of medical supplies in many countries.

The pandemic will further shake the economic foundation of globalization that was previously determined by market principles, driving countries to make industrial adjustments that they might otherwise not have made. The pandemic will also promote the reorganization of the industrial supply chain worldwide under the guidance of related policies. Therefore, it is inevitable that economic globalization will undergo a profound transformation, and all major economies will participate in the process either actively or passively. The post-pandemic globalization will not simply be restarted, it will be reset.

This resetting of globalization will lay the necessary economic foundation for the rebalancing of the global pattern, leading to new types of economic regionalization. For instance, Washington has focused on the United States-Mexico-Canada Agreement, the European Union is focusing more on the pan-European network while the Regional Comprehensive Economic Partnership is being highlighted among Asia-Pacific countries. On the basis of the world economic hubs, an upgraded North American free trade area, Eurafrican economic union, and Eurasian economic union are expected to take shape in the future.

The resetting of globalization will mean that the previous dominating market-and-capital principle and weakening national consciousness will give way to multiple factors, including maintaining industrial security, enhancing international competitiveness and serving geopolitical competition.

This change will be directly reflected in more political intervention in economic activities. For example, the industrial division and layout planning will be more linked to the concept of national (regional) economic sovereignty. Concerns such as shock-resistant supply chains, the development of industries, and even political security, will be included in the cost calculations for industrial investment and layout; also governments will provide more explicit guidance to industries through policies and take advantage of financial means to offer substantial support.

While resetting globalization on the economic basis, international relations and world politics will also inevitably be greatly influenced by the pandemic. The international community will witness a tough competition among major countries and an acceleration of the multipolarization trend. Pragmatism, enhancing comprehensive strength and pursuing higher status and influence in global affairs will become the keynotes of the relations among major powers. Technology and industrial policies, governance systems and capabilities, and the right to make decisions and calls will become key areas of competition, as has already become apparent.

With regard to world politics, the key questions are whether the transformation of the global pattern will lead to the "full decoupling" of the two largest economies and whether they can repair their political mutual trust before relations deteriorate into a disordered state. Also, it concerns whether widely accepted game rules can be established against the backdrop of fundamental changes in globalization and the accelerating trend of multipolarization.

The development of economic regionalization, supported by state-of-the-art technologies and industrial layout, indicates that all sides are trying to secure a position on the mid-to high-end of the value chains, which is bound to be a gradual yet tortuous process. However, economic separatism everywhere should not be the pursuit of each player, as the gains brought by the comparative advantages of the regional market cannot make up for loss of those offered by the global market.

To conclude, the transition between the old and new global patterns will not be completed overnight. In the post-pandemic era, the old pattern will continue to coexist with the new normal for a long time. The international community will have to work extremely hard to live in harmony with "complex coexistence", and find a feasible way to achieve the rebalancing of the global pattern.



Source: China Daily, July 8, 2020.


Cui Hongjian is the director of the Department for European Studies at the China Institute of International Studies. The author contributed this article to China Watch, a think tank powered by China Daily.