What a difference a generation makes! In the 1980s, America championed free trade, while China’s doors were closed to foreign investment. In an ironic twist, China has emerged as the guardian of globalization, while US President Donald Trump endorses tariffs and protectionism. At the 2017 World Economic Forum, President Xi Jinping defends globalization while acknowledging its flaws. Peppering his speech with ancient Chinese wisdom and metaphors, Xi offers a to-do list – rather than a how-to list – for improving globalization. Yet he outlines his desired path, which includes plans to open China’s protected industries to foreign investment.
Today’s world is one of “contradictions.” While wealth is expanding and science and technology are advancing, rising inequality, conflict and poverty have led to global instability. Though many blame globalization for this upheaval, it isn’t the source of all the world’s problems. For example, warfare, not globalization, triggered the refugee crisis, and greed and inadequate regulatory oversight sparked the global financial crunch. Alas, “economic globalization is a double-edged sword.” When the global economy shrinks, there is less wealth to share among all people. But instead of recoiling from it, nations must identify globalization’s flaws and work together to make it more inclusive and sustainable.
“Economic globalization was once viewed as the treasure cave found by Ali Baba in The Arabian Nights, but it has now become the Pandora’s box in the eyes of many.”
“It is true that economic globalization created new problems, but this is no justification to write economic globalization off completely. Rather, we should adapt to and guide economic globalization, cushion its negative impact, and deliver its benefits to all countries and all nations.”
An economic recovery has yet to transpire, due to a dearth of “driving forces for global growth”; a worldwide economic governance model that excludes developing nations, which account for 80% of growth; and “uneven global development” that has led to a situation whereby the top 1% is richer than the other 99%. To address those failings, world leaders must promote an “innovation-driven growth model”; form partnerships that benefit all people; allow all nations to participate equally in economic governance; and cultivate a fair and broad development model that focuses on social equality, justice and the environment.
“Pursuing protectionism is like locking oneself in a dark room. While wind and rain may be kept outside, that dark room will also block light and air. No one will emerge as a winner in a trade war.”
China’s progress since the onset of reforms in 1978 is proof that globalization works. China’s model follows a “people-oriented development philosophy” that has pulled more than 700 million citizens out of abject poverty; embraces reform and innovation; and strives for open, comprehensive development. This approach, though unique to China, may provide opportunities for other nations. It has allowed China not only to profit from globalization but to contribute to it. For example, since 1978, China has welcomed more than $1.7 trillion in foreign investment and invested more than $1.2 trillion overseas. While 2016 GDP growth is likely to be 6.7%, the Chinese economy performs more efficiently than during the era of double-digit growth. Personal consumption and services are now the major contributors to growth. China is committed to pursuing development and innovation, deepening reforms, expanding market access for foreigners, strengthening property rights, attracting and extending overseas investment, and building win-win free trade partnerships.