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“Globalization V.S. De-globalization” —— China Needs Global Concerts of Powers and a Correct Attitude towards Economic Nationalism

Submit Time:21-02-2017 | Zoom In | Zoom Out

Author:Pang Zhongying | Source:Guangming Net – Theory Channel

Abstract:

In recent years, be it the refugee crisis, Brexit in Europe, the terrorism or Trump phenomenon , they have all led to a judgment entirely different from that in the past two decades that “the world is flat”. Trump put forth the slogan of Americanism instead of globalism; in Germany, and even a grand parade against the TTIP broke out on Sept. 17; the nationalist extreme parties rose again in a number of countries, geopolitical conflicts have intensified, the surge of trade and investment protectionism rose again; and TTP, TTIP and other exclusive regional mechanisms kept on emerging. 

Obviously, the process of globalization is now at a new turning phase, and globalization now faces new uncertainties. On Dec. 17, 2016, on the “Culture Crossing Salon (Nandu Observation Special)”, Prof. Pang Zhongying of School of International Studies of Renmin University of China explored with the audience the question “Globalization V.S. De-globalization”. 

The globalization process has not been reversed 

Pang Zhongying summarized the effect of globalization on many countries with the saying “globalization brings both success and failure”. People’s attitude towards globalization also changed from “scrambling” to “evading”, at first, they believed that the momentum of globalization was irresistible, exaggerating the role of globalization, but today, on the contrary, they think that globalization has already reversed, overemphasizing the role of states. 

This is also the case with China. In the 1980s, China started reform and opening up, merging itself into the globalization process. It was just out of some economic motivation that this political decision was made, i.e. to promote the trade of the country by cashing in on the flourishing economy of the outside world, and also to promote reform in the country in an open environment. The dividend China has obtained in participating in globalization in the past decades can be easily seen. 

  

Today however, the world economy outside China has come to a turbulent and uncertain period with crisis. The economic nationalism returned, while globalization is in retreat and is slowing down. Pang Zhongying named it the globalization dilemma. In this situation, China can get far less effect than that in those years by opening to the outside world to force domestic reform. 

  

Yet, in the future, what role should China play in the pattern of globalization? How should we think about the law of development in the new round of global trade, cross-border investment and personnel flowing? How can we find the possible evolution mechanism of the Fourth Industrial Revolution and the new round of globalization process? What challenges and dilemmas will be possibly encountered in the new round of globalization? All these questions are worth our conscientiously thinking and exploration. 

However, Pang Zhongying also pointed out that, “the retreat of globalization” is not a recently occurred trend. He said, a research of the globalization history for 25 years can reveal that all scholars researching the globalization have recognized that globalization is a profound paradox. 

  

Pang Zhongying divided the views on globalization into optimists and pessimists. The former believe that, globalization is like “India” to the Europeans in those years, and can bring fortune and opportunities as “gold everywhere”. In the view of these optimists, even in the difficult situation today, globalization is still going on, only with the new globalization replacing the old. The globalization process cannot be reversed and is irresistible. On the contrary, the pessimists put forth the saying of “de-globalization”, indicating that globalization is in a difficult situation and has really encountered greater resistance. 

Pang Zhongying does not accept the term “de-globalization”. Because there are still new forces to drive up globalization. For example, the “Belt and Road” of China is pushing forward the global trade and investment, and the globalization process in the finance and Internet fields shows no slowdown. Although the signs of rising nationalism and nativism have really emerged in some developed countries or developing countries, resisting the dominance of the unrestrained globalization movement over the national state sovereignty and policy agenda, yet up to date, it still seems difficult to simply conclude that de-globalization has become a one-way trend. 

Pang Zhongying pointed out that, according to the science of complexity, we should not neglect the complexity of globalization. The history of 200 years of globalization can be divided into two periods: that from 1815 to 1914 is the first “Centenary”, dominated by peace in general, and especially in Europe, it was a “Centennial of peace” without significant wars, and the mutual dependence of states deepened. However, it was also in this period that the process of Europe scrambling for Africa and the world accelerated. China and other regions of Asia were also subjected great impact from Europe. The rising of the United States also occurred at the end of the 19th century and the beginning of the 20th century. The then US Secretary of State John Hay put forth the “Open Door” policy. “Open Door” not only meant policy of the United States demanding the European powers not to divide China, but also the globalization policy of the United States at that time. 

The period from 1914 to 2014 should be seen as the second “Centenary” of globalization. During these 100 years, changes of policies in various countries, transfer of international power and various major events, such as the two world wars (1914-1918 and from the 1930s to 1945), the birth of the Soviet Union (1918-1919), the transfer of world power center from the old Europe to the United States and the Soviet Union (1945-1989), and the post-war decolonization/ nationalist movements (1945-1999), led to major changes in the globalization pattern: there was slowdown and retreat like the Cold War (1947-1992), and also unprecedented trend of regional integration such as the European Community and European Union (since the 1950s up to date). The globalization has proceeded in such a zigzagged way. 

Therefore, Pang Zhongying pointed out that, we should not simply conclude globalization has been reversed only because of some major events today that have affected the globalization. 

Who globalizes whom? ---- The formation, collapse and rebuilding of world order 

Pang Zhongying pointed out that, the current discussions about globalization are mostly limited to the economic field. He believed that was not enough. The political issues in globalization are more important. The politics of globalization is “who globalize whom”, and specifically, who drives, dominates and controls the globalization? Who will benefit from the globalization? Who will suffer loss in the globalization? The politics of globalization is just a question how the world order will form, collapse and be rebuilt. In other words, people try to manage the globalization through the world order. The concert of great powers (Concert of Europe) in the centenary of peace, and the UN system, international financial system (International Finance Cooperation) and World Trade Organization formed after the WWII are the embodiment of the world order of management globalization. The Concert of Europe collapsed later, and the existing world order has failed to effectively govern the globalization. 

Pang Zhongying emphasized that three concepts of globalization, global issues and global governance should be distinguished clearly. He pointed out that globalization should be viewed from the angle of global issues, globalization is the biggest global issue, i.e. the global issues are embodied most intensively as globalization. Global governance is to solve global issues. The insufficient globalization governance, or insufficient global governance, and the rising deficit of global governance, has led to the current intensive rebound to the globalization. Some countries, especially the US and UK governments after the end of the Cold War, took globalization as their main policy (such as the Clinton Administration of the United States and the Blair Administration of the UK). However, the governments of these countries did not pay equal attention to global governance. The public would not oppose globalization when they enjoy the benefits of globalization, but when they are harmed by globalization (for example bearing the harm of globalization while getting little benefit from globalization), the public would have to protest against the globalization as a policy by means of the existing political mechanism (such as democracy), resulting the unmanageable populism today and its political consequences. 

Stepping out of the globalization dilemma: China needs global concerts of powers and a correct attitude towards economic nationalism 

How to step out of the dilemma of globalization in face of these problems? Pang Zhongying believed that, the rising again of economic nationalism is a world reality of globalization. The question today is how to cope with this fundamental major challenge. 

According to Pang Zhongying, one of the fundamental ways to cope with the ebbing globalization and the rising again of economic nationalism is to strengthen the global concerts of powers. He stated that people of insight in and out of governments of all countries should reach consensus on global concerts of powers and take actions, otherwise, the world will possibly slip towards a disaster of major conflicts in the 21st century. And now it is the right time to officially start the all-round and in-depth global concerts of powers. 

Pang Zhongying’s doctoral thesis on international politics in 1997 in Peking University was research monograph on economic nationalism. That was the first works in China specialized in the research of economic nationalism. When Pang Zhongying wrote his doctoral thesis, globalization was advancing in the song of triumph, and most people denied the economic nationalism, believing that it was irrational, not scientific and not in line with the general trend of globalization. 

Economic nationalism has been a tenacious existence of world economy, and has never retreated from the stage of history. Pang Zhongying pointed out that only the economic nationalism is the right view angle to interpret the Brexit and policies of the elected US president Trump, because economic nationalism has come back to the state policies of the UK and US again. Historically, the United States grew and thrived depending on the economic nationalism, but it later turned to economic imperialism. The United States under the Trump administration is trying to make America great again (MAGA) with economic nationalism – this is a historical regression with great sarcastic taste. Brexit is also a solution of economic nationalism. The Brexit has resulted in the contraction of the EU for the first time. In short, economic nationalism has become a method to correct the unbalance resulted from the globalization. Like it or not, economic nationalism is a reality and trend. Of course, any action separating from the globalization and world order would not be easy, and can even hardly be successful, despite of its reasons. It will be quite difficult for the UK to complete the procedures to exit the EU in 2016-2018. 

In answering the audience’s question whether boycotting foreign goods is economic nationalism, Pang Zhongying stated that this is question that could not be answered in a simple way. Transnational companies manufacturing and operating in China still have the national characteristics of their mother countries, and most profits flows back to their own countries, although they enjoy the national treatment specified by the WTO in China. Their behavior of tax evasion and dodging in China and demand for improving environment to foreign investment by the Chinese Government also indicate that they are not national enterprises of China. If these enterprises fail to properly handle the social relationship with the Chinese labor and consumers, it is normal and inevitable that their products and service are be boycotted. There are economic nationalists in many countries. The economic nationalists view the world in angles and methods that are not global or cosmopolitism. Pang Zhongying called for facing up to and studying the economic nationalism, instead of simply laughing at the economic nationalism. 

In the viewpoint of international relationship and to learn the severe lessons in history, the global concerts of powers established in the 21st century should cover not only states, but also non-state players. Pang Zhongying pointed out that, only with the concerted cooperation by governments, big companies and non-state institutions, and by strengthening the international financial system, WTO and the UN-led climate governance, can the global governance be re-established. Global concerts of powers include regional concerts. Pang Zhongying emphasized in particular that, if the concerts of Europe in the 19th century decided the world order at that time, then the concerts of Asia-Pacific and Asia-Europe will decide the world order of the 21st century. 

Pang Zhongying criticized the specious saying that “China is the biggest beneficiary of globalization”, and pointed out that new evaluation should be made for on the relationship of China with globalization. China’s benefit from globalization is only one aspect, and China has also paid various costs in globalization, in particular, there are also losers in globalization like those in Europe and America, and even, there are no fewer globalization losers in China than those in Europe and America. As China keeps on saying that it is the biggest winner of globalization, the economic nationalists in Europe and America believe more firmly that China is the root cause to turn them into losers. In his election campaign, Trump repeatedly referred China as the root cause to the problems in the United States today. China has unfortunately become a scapegoat for the problems of the United States, and now “anti-globalization” has become opposing China. 

As for such sayings that “globalization is coming to the next phase and China is becoming a new motive force in the globalization”, “globalization with China as the center” and “China drives, organizes and leads the globalization”, Pang Zhongying stated that these are only possibility and hope. Actually China also needs its own economic nationalism. While other countries strengthen themselves by means of economic nationalism, China can never cope with the economic nationalism of other countries if it still talks about the so-called globalism. China must learn the lessons of both success and failure from the globalization policies. 

At the end, Pang Zhongying summarized concluded that, China in need of more economic nationalism does not mean a return to the planned economy, instead, we should strengthen the market economy and establish the real market economy of China, because the real market economy is just founded upon the nation, or the basic population of the own country. An economy dominated by transnational companies, instead of founded on the own nation, is certainly not national, nor is it a real market economy. Both the domestic market economy and global economy need the functions of the government. Under the economic nationalism, the role of the government can possibly be exaggerated and abused, however, with the domestic democratic process and concerts of international policies, the role of the government will be restricted, market economy developed, and global economy balanced. 

 (Author’s entity: School of International Studies, Renmin University of China)

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