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Economy

Less Globalization Is No Answer to the World’s Ills

Jan 25 , 2017
  • Yi Fan

    Analyst, Foreign Ministry of China

Nine years after the global financial crisis, while many economies are on the mend, anxiety lingers about the negative side of economic globalization. Populist and protectionist forces dismiss globalization as working against ordinary workers and widening economic inequality. Should globalization be blamed for all the problems facing the world? Is a reversal of globalization the way forward?

The answer is “no”, according to Chinese President Xi Jinping in his opening address at the 2017 World Economic Forum. Globalization is not the panacea for all problems, and neither should it be. We must understand that it is a double-edged sword that cannot always deliver the best of both worlds. Occasionally, setbacks and frictions do happen. Insecurity finds new material in the fears about unemployment, as economic gaps widen within and between societies. Advanced economies are losing manufacturing jobs; developing countries are grappling with severe environmental problems as a result of years of neglect for the sake of economic growth. But these do not justify a complete reversal of economic globalization. To clear-eyed observers, it has always been a challenge as well as an opportunity.

Economic globalization is not a new phenomenon. Trade with distant places is as old as recorded history. Assisted by globalization, countries have accumulated wealth and new technologies have penetrated every corner of the world. Rising incomes in large emerging economies and the low costs of communication and transportation have made our lives so much more convenient. On the other hand, terrorism and disease have also spread across border with greater ease. In this respect, every country, including China, is not helped and hurt by a more integrated world. The days are long gone when every country only needs to look after its own backyard. Therefore a race back to isolation does no good to solve the world’s problems; it only worsens them.

What can we do to make globalization more progressive and inclusive? President Xi Jinping’s four-day tour of Switzerland offers a glimpse into the solutions.

The state visit to Switzerland highlights the necessity to pursue an innovation-driven growth model. Acknowledging innovation’s primary role in creating new demand and boosting development, the two countries have taken major steps to boost relevant cooperation. Last April, China and Switzerland established an innovative strategic partnership between the two countries, the first of its kind for China. The newly established Sino-Swiss High-level Innovative Dialogue stands as another example, which will catalyze collaboration in cutting-edge technologies.

Following the state visit, President Xi’s presence at Davos answers the call for “responsible and responsive leadership”. We live in a world where countries’ interests are closely intertwined and their actions impact one another profoundly. All countries must view their own interests in a broader context and refrain from pursuing them at the expense of others. Today’s leaders must chart the right course for global trade and investment. Protectionism may shield industries over the short term, but it never works in the long run.

As the final stop, his visit to international organizations in Geneva highlights China’s commitment to multilateralism and a fair and equitable system of global governance. As Europe’s own history reveals, multipolarity did not prevent the two world wars. The answer must be multilateralism. Accounting for 80% of global growth, developing countries sometimes bear the costs of globalization without enjoying a fair share of its dividends. A fairer system should be in place to ensure equitable governance.

The world is becoming a place in which everything is everywhere. No one is capable of building a fortress around himself to exclusively let in the good and seal off the bad. We should craft viable solutions to guarantee a progressive and inclusive globalization that benefits all nations. As President Xi has remarked, “Less economic globalization is not the answer; better globalization is!” No one could have put it more succinctly.

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