Wang Huiyao: Globalization is changing against the tide | Global

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“China can connect developing countries, and it also has a certain degree of capital and industrial capacity from developed countries. It can connect several major blocks in a multipolar world and play a leading role in economic globalization.”

Regional conflicts continue to occur, the world economy is struggling to recover, scientific and technological development has a multifaceted impact, and the “extreme right-wing trend” has swept across many places… Under the superposition of many factors, the countercurrent of globalization or anti-globalization forces have taken advantage of the situation, bringing more dimensional troubles to the process of globalization. At the same time, globalization itself is constantly transforming in adversity, keeping pace with the times, and constantly showing new vitality and color on the main road for mankind to move forward hand in hand. The new type of globalization with China as the main leading force has received more and more attention and recognition.

“As a beneficiary and contributor to economic globalization, China has continuously expanded its opening up in recent years, linking its own development with the development of other countries in the world. It has become a stabilizer of the world economy and an important driving force for global development.” Wang Huiyao, founder and chairman of the Center for China and Globalization (CCG), former counselor of the State Council, and dean of the School of Development at Southwestern University of Finance and Economics, told a Global magazine reporter.

This scholar who focuses on globalization research has recently released new works – “Dialogue with the World: Understanding Globalization in the New Era” and “Shared Destiny: China and the Future of Globalization”. What further observations and thoughts does he have on the logic, changes and solutions of globalization in today’s era?

Globalization is becoming more complex

Global Magazine: In recent years, many terms related to globalization have emerged, such as “anti-globalization”, “deglobalization”, “slow globalization”, “reglobalization”, etc. What do these terms mean? How can we better and more comprehensively understand the concept of “globalization”? What are the main differences?

Wang Huiyao: In recent years, various new terms and new phenomena about globalization have emerged, indicating that the development pattern of globalization has changed significantly. At present, globalization is in a complex and turbulent transition period, with past contradictions intensifying, multiple forces competing, and anti-globalization trends appearing widely. The traditional driving force for globalization has weakened, while new driving forces and new development patterns are emerging.

In fact, globalization is a multi-dimensional dynamic integration process. From an economic perspective, globalization means that capital flows freely around the world beyond the borders of nation-states, and resources are allocated globally. Therefore, the fundamental driving force of economic globalization is also attributed to the development of the market. In general, it can be considered that globalization means that human society, which is composed of multi-dimensional actors such as people, enterprises, countries, and international organizations, is driven by the development of knowledge and technology, and through multiple forms of expression such as global trade, global investment, global immigration, and global governance, it has formed economic, cultural, and social phenomena and orders that affect the development process of the world.

Economic globalization is the result of the global flow of production factors and technological progress under the background of productivity development. It will eventually meet the development interests of most countries and people and will not be easily reversed. What many anti-globalization people in the United States and the West really fear is the hollowing out of local industries, rising unemployment, declining social welfare, widening gap between the rich and the poor caused by globalization, and the adverse effects on the international order, living environment and cultural exchanges that follow. The huge uneven distribution of wealth has led to the intensification of social contradictions in the United States and the West and the rise of populism, while China has become a “scapegoat.”

In the era of globalization, with increasingly close economic and trade exchanges between people, more and more global problems that transcend national borders have emerged, and the trend of internationalization of domestic problems and domesticization of international problems has become increasingly obvious. However, in recent years, the existing global governance mechanism has become increasingly incapable of dealing with global problems, and a new global governance system has not yet been formed. Overall, Western countries are still in a relatively high position, and the weak position of the vast majority of developing countries in terms of discourse has not fundamentally changed. However, the rise of emerging countries such as China has changed the balance of power in the international landscape, and the old rules of globalization are increasingly incompatible with the current relationship between countries. The COVID-19 pandemic and the conflict between Russia and Ukraine have accelerated the evolution of the international landscape and the differentiation and combination of international strategic forces.

The big trend is hard to reverse

Global Magazine: What are the main stages of globalization? What are the characteristics of globalization today? What are the key words?

Wang Huiyao: Since the Age of Exploration, the world has entered an era of globalization characterized by the global flow of factors such as people, goods, capital, and information. Over the past 500 years, the three industrial revolutions brought about by human technological progress have brought about tremendous social changes and also changed the form and rate of global development. From the 1990s to before the outbreak of the international financial crisis in 2008, it was the golden age of global development. Marked by the disintegration of the Soviet Union, the breaking of the two camps created a good political environment for the unification of the world market, and international trade reached an unprecedented stage of prosperity. However, prosperity and inequality are two sides of the same coin in the past development of globalization. Neoliberal thought regards the market as the criterion, which greatly facilitates and allows capital to take profits around the world, while weakening the role of the state and government in controlling and balancing the economy and society.

As a result, economic integration driven by market fundamentalism (the core idea is that the market can automatically restore balance without any government intervention) has caused great oppression on the welfare society. Neither developed countries with complete welfare systems nor underdeveloped developing countries have fully benefited from the global flow of resources. Since the 2008 international financial crisis, the world economy has been sluggish, and domestic job losses in some countries have aroused opposition from blue-collar groups and the middle class with reduced income in these countries. In order to stimulate economic recovery, many countries have implemented diversified trade and investment protection measures, which has also caused the development of globalization to regress. The world economy has entered an era that some people call “slow globalization.” During the slow globalization period, the growth rate of trade was roughly consistent with world output, while the ratio of cross-border investment to world output fell by more than half.

The outbreak of the Russia-Ukraine conflict in February 2022 has caused a reset of Europe’s geopolitical structure and security system, and the world order established after World War II has suffered a severe blow. The world economy has been further deteriorating, and many developing countries have been affected by rising energy and food prices. Under the influence of the COVID-19 pandemic and the changes in the century, globalization as an inevitable trend of economic and technological development may not stop, but the form and direction of global development are undergoing new changes.

At the same time, the end of the era of “hyperglobalization” does not mean the end of globalization. Despite the pressure of economic adjustment costs and tensions between major powers, the momentum of globalization remains strong. Leaders of major countries in the United States and Europe want to control potential risks and do not want trade, finance or broader international relations to collapse. Although Western companies have paid more and more attention to political risks in recent years and sought to diversify supply chains to hedge, this does not mean “deglobalization”. The problem is whether a framework of trust and cooperation can be established. To this end, all parties must work hard to control differences and reach cooperation.

At present, with the rise of developing countries and emerging economies and the relative decline of developed countries, the so-called “center-periphery world system” in the West has also undergone major changes. A more equal and inclusive multipolar world order is taking shape, but before the new order is fully established, we may face a more divided, turbulent and constantly differentiated world.

China becomes a “repayer” and “leader”

Global Magazine: In terms of globalization and global governance, what are China’s main advantages and contributions? What are its main challenges?

Wang Huiyao: China’s reform and opening up has gone through more than 40 years. China has also become the world’s second largest economy. The rapid growth of China’s economy has provided the world with huge markets and investment opportunities, and promoted the growth of global trade and investment. China’s economic growth has a significant positive impact on global economic growth, especially during the financial crisis and economic recession. China’s stable economic growth has played an important role in the recovery of the global economy. China is promoting the process of globalization by actively participating in global economic governance and the construction of the multilateral trading system. At a time when anti-globalization and trade protectionism are on the rise, China firmly supports free trade and open markets, advocates multilateralism, and maintains the stability and fairness of the global economic order.

China has proposed the concept of a community with a shared future for mankind and promoted the implementation of the “Belt and Road” initiative, put forward the “Three Major Global Initiatives” (Global Development Initiative, Global Security Initiative, Global Civilization Initiative), promoted the construction of the Asian Infrastructure Investment Bank, joined the Regional Comprehensive Economic Partnership (RCEP), applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA), etc., which have been recognized and welcomed by many parties.

“To get rich, build roads first.” China focuses on infrastructure construction, especially investment in transportation, communications and energy. China’s economic development model focuses on industrial upgrading and technological innovation. By introducing foreign capital, cultivating local enterprises and strengthening independent innovation, it has promoted the upgrading of industrial structure and the improvement of technological level. The above experience can provide useful reference for other developing countries and even the wider international community.

China is striving to assume more international responsibilities, gradually transforming from a participant in globalization to a “repayer”. China is a member of the “Southern Countries”, but some coastal areas are close to the level of developed countries. In this sense, China can connect developing countries, and has a certain degree of capital and industrial capacity of developed countries. It can connect several major blocks in the multipolar world and play a leading role in economic globalization.

In the face of a world full of changes and chaos, how to continue to promote globalization is a huge challenge facing China. To further build a new international governance system, we need to reach an agreement with the United States, the European Union and other “Southern countries” to find a model of multipolar and peaceful coexistence. The emergence of a multipolar trend has led the world off the track of a bipolar world, and we must avoid the formation of two major camps.

At present, China has entered an era of rapid technological change. New business forms such as the Internet, artificial intelligence, and clean energy continue to emerge, reshaping the original business order. However, they lack a governance system, such as the digital economy, carbon emissions, the world’s lowest corporate income tax, and some cutting-edge issues, including space governance. These areas that lack international institutions and international coordination can all become themes for China to discuss with other countries.

Global Magazine: What are the fundamental differences between the new globalization led by China and the globalization led by the United States and the West?

Wang Huiyao: In the past 30 years of rapid globalization, universal prosperity and development have masked the unfairness and injustice of the international system and world order, which has become more prominent when the world economy slows down. As a beneficiary of globalization, China has continuously expanded its opening up in recent years, provided the international community with conceptual and institutional international public goods, and promoted globalization and global governance to develop in a more inclusive, fair and just direction.

Different from the “center-periphery” world system formed under the leadership of the United States and the West, China does not seek to form a hegemonic system centered on China in promoting the development of globalization, but is committed to creating a new type of globalization that is more open, inclusive, equitable, balanced, and win-win. The international pattern formed by this will be a more equal and orderly multipolar world. On a deeper level, the two are different at the level of “Tao” and at the essential level. The logic of China’s actions is not to pursue the so-called maximization of capital interests, but to advocate win-win cooperation and common development.

“Adhere to development first” and “Do not let any country fall behind in the process of world modernization” all show that the essence of globalization that China understands and promotes is to achieve common development of mankind. “When calculating one’s own interests, one should consider the interests of the world” and “Stand up for oneself and help others, and benefit the world” explain China’s value choice of the concept of righteousness and interests under globalization. These ultimately reflect the profound value adherence to the community of human destiny.

China’s hybrid rice has helped the people of Madagascar gradually get rid of hunger, and has also made the world believe that hunger will eventually be eliminated. As a landmark project of the China-Indonesia cooperation on the “Belt and Road Initiative”, the Jakarta-Bandung High-Speed Railway connects the Indonesian capital of Jakarta and the famous tourist city of Bandung. It is the first high-speed railway in Indonesia and even Southeast Asia, closely linking China’s high-quality development achievements with Indonesia’s high-quality development vision, and bringing new opportunities for cities and people along the line to accelerate towards a better life. After the opening of the line, the travel time between Jakarta and Bandung has been shortened from more than 3 hours to more than 40 minutes, which means that more people will come to Bandung to work and live, bringing more economic activities, which will benefit the next generation in a sustainable way.

Multi-dimensional global collaboration moving forward

Global Magazine: How do we understand the relationship between regionalization and globalization? How can China better grasp the relevant issues?

Wang Huiyao: The relationship between regionalization and globalization is multifaceted. There are mutual promotion and conflict. When globalization encounters great resistance, regionalization tends to develop more forms. Regionalization is actually a kind of local globalization with its own characteristics, different regional characteristics, and different geopolitical games.

At present, the world is becoming more regionalized, and the United States and the West are more skeptical about trading with countries they consider potential enemies. The United States is becoming alliance-oriented, not globalization-oriented, or it can be said that it is Western alliance-oriented. The United States is dividing the world, but not into individual countries, but into various alliance systems. China needs to continue to promote economic globalization, including regional economic integration.

China and Europe have consensus in many areas, such as climate change, multilateralism, and the digital economy. Europe may not be so strong militarily, but it still has significant advantages in economy, soft power, and cultural influence, and many international organizations are located in Europe. At present, China has established third-party market cooperation mechanisms with many countries, including France. In the future, China and Europe, and even China, the United States, and Europe, may also consider deepening third-party market cooperation in Africa and other places, jointly promoting investment, trade, and infrastructure construction in Africa, and forming a new direction for South-South cooperation.

Global Magazine: What are the connections and differences between globalization in terms of politics, economy, technology, and culture?

Wang Huiyao: Globalization at the political, economic, technological, and cultural levels has its own specific manifestations, and also influences and blends with each other. For example, at the economic level, globalization is mainly manifested in the free flow of goods, services, capital, and labor around the world. The rise of international trade, multinational corporations, and global financial markets has promoted the formation of global supply chains. At the technological level, it mainly refers to the global dissemination and application of scientific and technological achievements and innovations under the development of globalization, the development of information technology, the strengthening of scientific research cooperation, and the international flow of scientific and technological talents.

Although globalization in the political, economic, technological, and cultural aspects differs in form and content, they are closely connected, mutually influential, and complementary. In many cases, they overlap, just like many issues that involve multiple areas of human activity. Today, after multi-faceted and multi-level global development, the trend of global integration is very obvious. Countries can no longer be separated from each other, but are integrated and interconnected. Each country influences each other at all levels and makes common progress.

Breaking out of adversity and reflection and starting again

Global Magazine: The so-called “anti-globalization” and “de-globalization” phenomena have appeared at different stages of history. How do they affect the process of globalization?

Wang Huiyao: From a historical perspective, under the global pursuit of profit by capital, the problem of unbalanced development has become a prominent symptom of the globalization crisis, and prosperity and inequality have become two sides of the same coin of globalization. The free competition encouraged by the market economy and globalization cannot solve the problem of uneven distribution of national interests by itself, and it is easy to produce the “Matthew effect” where the strong become stronger and the weak become weaker. This is also the economic reason for the internal social unrest and even world wars that have occurred many times since the birth of capitalism.

As early as the 1940s, in the face of the devastated Western civilization after the two world wars, Hungarian-born economic historian Karl Polanyi proposed the “two-way movement” theory, explaining the “great transformation” that occurred in the 20th century from the pendulum-like tug-of-war between the market and society. In his view, economic globalization based on liberal principles cannot be independent of the social system, and its relationship with the social system is a mutually “embedded” two-way movement. When economic globalization expands to a certain extent, it will inevitably require governments to make adjustments based on actual conditions.

Therefore, many phenomena such as “anti-globalization” and “anti-globalization” in the United States and the West are actually a reflection of the governance crisis in the United States and the West under the development of globalization. When the social contradictions and conflicts between countries caused by the free expansion of capital reach a certain level, the emergence of the “anti-globalization” and “anti-globalization” trends will force and promote the government to improve relevant governance, improve the welfare of the people, and ease the contradictions between capital and the people. When the contradictions are irreconcilable, divisions or even wars may break out, breaking the existing rules and shackles, redistributing interests, building a new order and rules, and promoting a new round of development and prosperity. In the past, globalization itself has paradoxes. Voices such as “anti-globalization” are afraid of seeing themselves no longer become the center of discourse and their interests are damaged, and they look for scapegoats, such as shouting “de-Sinicization”, which is itself a reflection of the hegemonic mentality and self-contradictory.

Global Magazine: How does globalization affect the evolution of human civilization? What are the future trends of globalization?

Wang Huiyao: Globalization is a double-edged sword for the development of human society, but generally speaking it is a booster for the evolution of human civilization. In the long run, mankind has achieved a historic leap from traditional agricultural civilization and nomadic civilization to industrial civilization and information civilization. Globalization has undoubtedly injected strong impetus into the development of human civilization. The development and popularization of the Internet and information technology have changed people’s lifestyles and social structures, making information more transparent and society more open. At present, digital globalization and digital civilization led by the development of digital technology have also become a new trend in the new stage of global development.

There are many trends in future globalization. In the medium term, first, as the negative effects of globalization emerge, the trend of regionalization will intensify. Secondly, some countries may adopt more conservative trade and economic policies to protect their own interests, and the process of globalization will continue to reverse or slow down. With the rise of emerging economies, the global economic and political landscape will become more multipolar, and the balance of power between developed and developing countries will be more balanced. Finally, in the future, globalization will pay more and more attention to information technology and green technology, and even a new globalization guided by climate change governance. Major economies such as China, the United States, Europe and Japan have proposed “carbon neutrality” plans. The development of green technology has increasingly become a game point between major countries, and this trend will continue to deepen, forming more close communities of interests.

Global Magazine: What lessons can we learn from historical and current phenomena related to globalization for the future?

Wang Huiyao: After World War II, under the leadership of the United States, the existing global governance system was gradually established and improved, economic globalization reached a new climax, and mankind avoided a new world war for more than 70 years. However, in recent years, the trend of anti-globalization has risen, and the United States, which has benefited greatly from globalization, has also taken up the banner of trade protectionism and unilateralism. Under the conflict between Russia and Ukraine, the world has undergone epoch-making changes, becoming more divided and more insecure, and mankind is facing the risk of a new world war.

In this new “Bretton Woods moment” (a period when a country or region plays a core role in the international economic system, especially when the currency of that country or region becomes an international reserve currency or the center of international economic cooperation), how can we avoid the escalation of world political and military confrontation and trigger the Third World War? Perhaps the international community can learn from the historical experience of countries cooperating after World War II to build the Bretton Woods system, establish and improve the global governance system, and promote world peace and development by building a post-war international economic and financial order, deepening international economic and trade cooperation, and promoting world peace and development.

In the future, to bridge the world’s divisions and confrontations and avoid the outbreak of larger-scale regional and global wars, we still need to rely on enhancing cooperation and trust among countries in the reshaping of the global governance system. In the face of the “collective security paradox” (some operations carried out for their own security make them less secure and bring hidden dangers to the international community, such as NATO), it is necessary for all parties to work together and maintain dialogue and communication. Economic cooperation and regional alliances, as new development trends and manifestations of economic globalization, are more in line with the interests and needs of world development and are more long-term and sustainable. They will also bring about integrated development and mutual trust and friendship among countries.

China has become a stabilizer of the world economy and an important driving force for global development. Faced with an increasingly unstable world, China must, on the one hand, maintain strategic stability and always regard development as its top priority; on the other hand, it must also turn challenges into opportunities, play more initiative in a complex and turbulent international environment, demonstrate more responsibility as a major country, play a greater leading role in building a new international order and promoting global development, provide more international public goods to the international community, promote the shaping of a new international order that is more inclusive and equal in a multipolar world, and lead the in-depth development of a new round of economic globalization.