Is globalization dead?
This is one of the big questions at the World Economic Forum in Davos, Switzerland.
Widely taken for granted for decades, the surge in global connectivity and trade is certainly under pressure.
From the COVID-19 pandemic, to the conflict between the United States and China, Brexit and the war in Ukraine, a confluence of factors has upended the long-held assumption that business and investment should be able to move freely across borders. It has been.
Where once the cost of doing business drove investment decisions, businesses now must consider geopolitical and national security factors that increasingly drive government policy decisions.
Tinglong Dai, a globalization expert at Johns Hopkins Carey Business School, believes that globalization isn’t dead, but at least it’s struggling to survive.
“The coming years will see the emergence of an ‘iron curtain of supply chains’ that will scrutinize relations with China, Russia and others while the West maintains high levels of free trade, investment and movement of people between them. may be seen,” Dai told Al Jazeera.
“This means that free trade in sensitive and strategic categories of goods and services, such as semiconductor chips, car batteries and public health products, will be severely curtailed, and even mundane supply chains will face increased regulation and There will be social pressure.”
The relatively low attendance at this year’s World Economic Forum, one of the most high-profile annual gatherings of key political and business leaders, is itself a sign of a shift in winds. It seems that
German Chancellor Olaf Scholz is the only G7 leader in attendance. In 2018, six of his seven leaders in the developed world, including then-U.S. President Donald Trump, attended the meeting.
Key global South leaders are also absent, including China’s President Xi Jinping and India’s Narendra Modi, who attended in 2017 and 2018 respectively (both attended the rally via video link).
European Commission President Ursula von der Leyen, who was in attendance, used the rally to introduce a Green Industries Bill that rivals the U.S. Inflation Reduction Act, which angered European governments with subsidies for electric cars made in North America. announced plans for
Still, the key message emanating from Davos is that globalization must persist, and perhaps its demise has been exaggerated.
While China itself has turned inward toward more nationalism and protectionism, Xi said in a virtual address to the rally that globalization is a “trend of the times” and is as much to stop as a river flowing into the sea. He said he couldn’t.
Chinese Vice Premier Liu He stressed that foreign investment was still “welcome” and that “the door to China will be further opened.”
Historian Neil Ferguson has gone so far as to describe the mass deglobalization trend as a “mirage,” with Chinese apps like TikTok and South Korean pop culture increasingly prevalent in chips and hardware. Despite this, it continues to be popular around the world. Subject to protectionist regulations.
Even if globalization has reached its peak, it will not completely recede.
Apple is trying to diversify its production outside of China, but rather than moving most of its manufacturing back to the United States, it’s looking specifically at Vietnam and India.
In that case, it might be more accurate to say that globalization is evolving rather than regressing. This is a view shared by James Mittelman, a globalization and development expert at the American University in Washington, DC.
Mitterman told Al Jazeera, “The combined effects of the coronavirus pandemic, Brexit, supply chain disruptions and the war in Ukraine have created barriers to cross-border flows and inefficiencies, but there is also a significant downturn from globalization. “There is solid evidence that it’s not a withdrawal,” he said.
“From all indications, the tide of globalization will continue to recede and advance. The perplexing questions of the future will be not globalization and deglobalization, but what kind of globalization? How do we achieve a more globalized order?”