For Globalisation, Look East
Much to President Xi Jinping’s pleasure - with the isolationism that is sweeping across the West - China will become the unlikely beacon of globalisation. Western demagogues threaten the global liberal order and jeopardise the era of free trade but at the same time leave China as the champion of economic globalisation.
China has benefitted hugely from globalisation; its transformation in 1979 to the workshop of the world lifted many out of poverty. GDP per capita has experienced a 26-fold growth since the mid-Eighties and some 600 million people were lifted out of poverty. In the space of two generations China went from economic insignificance to the world’s leading trading nation. It is also on track to become the biggest economy. The reason for this, whatever the Communist Party may say, is that China embraced the liberal order and the trade that came with it. The US-led institutions such as the World Bank and IMF created an economic structure established on the principles of free movement of capital. As a result, China was successful in attracting Western and Japanese investment. Its embrace led to a move towards mass manufacturing of consumer goods and a degree of acceptance for the free market. That’s not to say it’s a nation part of the liberal order; China still lacks a proper democracy and even used the Brexit vote as a prime example of why ordinary people shouldn’t have a say in the government of a nation.
In fact, it is rather ironic that the biggest beneficiary of the global neoliberal economic order is so critical of it, but as the drawbridges start going up across the West, we’re likely to see China become the champion of global economics. Trump has promised to scrap “the worst trade deal in history,” namely NAFTA, and has said he’ll slap heft tariffs on Chinese goods, as well as punish companies that vacate job opportunities from America. In response to America’s emerging introversion, President Xi Jinping said at the Asia Pacific Economic Cooperation summit that China was a buffer against “isolation and exclusiveness”.
With the USA seemingly retreating from world affairs, China’s president has pushed for the Free Trade Area for the Asia-Pacific and a Regional Comprehensive Economic Partnership, already flexing its economic muscles in the region. Xi has already started looking beyond Asia and will be the first Chinese leader to attend the World Economic Forum in Davos. The move away from global trade, as signalled by Trump & Co. may trouble China, but this will turn out to be a blessing in disguise for the nation; instead it’s an opportunity to become the beacon of globalisation and initiate an ’Asia-pivot’ of their own.