The outbreak of the coronavirus came at a time when the world was split between further globalization and a rising tide of inward-looking, populist momentum, especially in the developed world.
The relationship between China and the United States, infused as it is with competition and resting at a historic low for cooperation, has recently found respite with the phase one trade agreement. Currently the world is still absorbing the pain brought by the unexpected virus. It will certainly be a game-changer for globalization and the Sino-U.S. relationship, which is in search of a new pattern.
The latest round of globalization, which thrived in the aftermath of the Cold War, has fostered a relatively benign relationship between the world’s two biggest economies. The U.S., boosted by a new liberalism and its collateral optimism as the guardian of the post-Cold-Car “liberal international order,” had embraced China as a part of that order, employing the dual approach of engagement and constraint. China, on the other hand, had been thirsty for integration and opening to the world. With its entry into the World Trade Organization, China has become further intertwined with the world economy and, increasingly, the linchpin of the global supply chain.
Both China and the U.S. were satisfied with the peace and prosperity brought by globalization and the established world order, and both endorsed the positive side of globalization. Stability sprang from economic interdependence. However, the seeds of discord had also been planted, despite the huge benefits enjoyed by each side.
With the rapid rise of China, and especially as its GDP reached No. 2 in the world, the Obama administration in the U.S. began to fret about the trend and criticized China for taking advantage of the “U.S.-led” world order. That uneasiness was coupled with a rising sense of loss of U.S. superiority in world affairs, especially after the financial crisis of 2008. Although Obama tried to meet this worry through his “rebalance” toward Asia policy, the underlying force against globalization, free trade and the overreach of U.S. overseas “obligations” gradually accumulated amid public perception of U.S. decline.
At the same time, rather than reaching a consensus on internal reform of the country to solve the problem, the U.S. became more and more fragmented, with inadequate statecraft arising from political polarization and social tribalism. This made it difficult to pursue any meaningful agenda to solve latent problems, such as the loss of middle class and low-end jobs that came with outsourcing in a global supply chain.
Actually Obama had tried to revitalize manufacturing inside the U.S. but failed. The discontent over free trade symbolized by the signature Trans Pacific Partnership ultimately blew up, and President Donald Trump abandoned it after his inauguration.
Wielding a cudgel against global trade since taking office, Trump has made numerous gestures, such as calling for the return of manufacturing jobs to the country, create more jobs and balance trade. Moreover, his “America first” mission has inflated U.S. historical exceptionalism to such a degree as to an nearly overhaul international regimes such as the WTO, not to mention the withdrawal from various international organizations.
With the structural changes arduously implemented by the Trump administration both at home and abroad, China consistently emerges as the crux. China has been regarded as the main reason for the loss of U.S. jobs, given its high-tech edge and trade imbalance. China has flourished in the U.S.-protected world order but is said to have become increasingly aggressive in the strategic arena, directly challenging the predominant role of the U.S. And the current global supply chain hinges on China. Too much interdependence has taken a toll on the U.S., the China critics say, not only economically but strategically. Therefore, the U.S. has begun the process of decoupling.
The sudden outbreak of the coronavirus seems to have become a catalyst for this trend. In many eyes, it may even be the last straw. There have been a lot of discussions to the effect that if countries were more inward-looking and self-reliant, international regimes would be more marginalized at critical times, and globalization would recede, since each country, especially the United States, should not rely on global supply chains at the cost of its own national security. For example, there have been a lot of calls inside the U.S. to reshore medical supplies to the country. Strong voices to decouple with China have also risen as the country wrestles with the coronavirus. Yet we also see that the U.S. government has accepted and praised China’s help with medical supplies lately, showing there is still room for cooperation at a critical juncture — a time when all humans need to huddle together to save themselves.
Looking into the future, there are reasons to believe that the countries of the world will become more isolated, that globalization will be recede and that the global supply chains that have been established over the past several decades, in which China has played a crucial role, may experience some reshaping, if not outright downsizing.
The American anti-globalists are likely to try every means possible to link the chains back to the homeland, or at least to the neighboring area — at least within “democratic” boundaries. But there remain globalists who believe U.S.-China cooperation is necessary and really good for humanity. For them, cooperation with China is seen as vital for both the U.S. and the world.
The lessons that should be learned from the pandemic still needs some sorting out. Although realism is relevant, as pointed out by such well-known scholars as John Mearsheimer and Stephen Walt, learning and seeking help from others — especially from China — shows that cooperation still matters. As for the Trump administration, Sino-U.S. cooperation may become a minimal or tailored need. Realism will surely lead its China policy during the rest of Trump’s time in office. Decoupling is only a matter of time.