New Sino-US globalization opportunity
WHILE the United States’ postwar policies in Asia are shifting, a new Sino-US historical opportunity has emerged. US and Chinese visions of globalization could prove complementary.
Since the mid-2010s, global economic integration — as measured by trade, investment and migration — has come to a standstill. Trade has been falling. Investment continues to stagnate. And slower migration has given rise to elevated global displacement and refugee crises.
On the surface, it seems that the US and China differ a lot about free trade, with the former blaming homegrown ills on “chronic trade abuses” and the latter throwing its weight behind globalization.
Yet, neither country has illusions about pure free trade ideals in which markets would be self-disciplinary and which thus would only generate winners. Both the US and Chinese visions support globalization, but with caveats. Both criticize the old multilateral international banks, though for different reasons. Both believe in rebalancing that is not accompanied by excessive trade deficits and foreign investment that should benefit both investors and destinations.
As aging advanced economies suffer from secular stagnation, they can no longer fuel world trade, investment and migration as vigorously as before. That’s reflected by the US’ pessimistic narrative of a globalization victim.
Yet, the global economy is also in the midst of a secular transition that is characterized by increasing South-to-South trade, investment and migration, which are now fueled by emerging and developing nations. And that’s reflected by China’s more optimistic narrative of a globalization champion.
The big picture includes both narratives.
In the 21st century, the international environment that fuels global economic integration is shifting dramatically. While globalization was initiated by advanced economies in the 20th century, it will be completed by emerging economies in the 21st century. At the same time, the drivers of globalization are moving from the transatlantic axis to Asia.
It is thus not the competitive US-China visions that will lead to a destructive conflict in Asia Pacific. Rather, it is the inherent commonalities in the Sino-US approaches that have potential to sustain economic cooperation in the region — and globally.
Dr Dan Steinbock is the founder of Difference Group and has served as research director at the India, China and America Institute (USA) and visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Center (Singapore). Shanghai Daily condensed the article. For more, see https://www.differencegroup.net