When it comes to economic globalization, consensus is sorely needed

BEIJING — The theme of this year”s World Economic Forum annual meeting is “Cooperation in a fragmented world.” No word better describes the gloomy state of the global economy than “fragmented.”

In addition to rising trade barriers, jolted supply and industrial chains and major regional conflicts, the fading consensus on economic globalization is harming the world economy. Many no longer view economic globalization as a cornucopia of opportunities and wealth. Some even call it a Pandora’s box.

The world must rebuild a consensus on economic globalization, but a few realities must be understood first.

For starters, economic globalization is the prevailing historical trend, independent of people’s likes and dislikes.

Facing surging trade protectionism and economic nationalism in recent years, economic globalization has suffered. However, as many have observed, globalization is far from dead. The process is an inevitable outcome of growing social productivity and increased scientific and technological breakthroughs and has facilitated the flow of people and profit-thirsty capital.

As Chinese President Xi Jinping has said, “economic globalization is the trend of the times. Though countercurrents are sure to exist in a river, none could stop it from flowing to the sea.”

Meanwhile, the historical contribution made by globalization to world growth has been widely acknowledged. Economic globalization has allowed countries to unleash their comparative advantages, share each other’s markets, and better access technologies, services, labor and investment, all of which have ultimately enhanced the productivity of humanity as a whole and improved people’s lives.

Thanks to globalization, beef from New Zealand, red wine from Chile and coffee beans from Nicaragua are on Chinese dining tables, and consumers worldwide enjoy quality products “Made in China.”

However, countries must recognize that economic globalization in its current state has several flaws.

One is unequal distribution. When global trade started at the Age of Discovery, economic globalization were mainly driven by a handful of countries, which reaped most of the benefits.

After World War II, the United States and its Western allies attempted to control policy-making and agenda-setting in post-war global economy, leading in establishing such institutions as the World Bank, the International Monetary Fund and the General Agreement on Tariffs and Trade.

When the Cold War ended, the United States, the world’s sole superpower, nudged those economic organizations and rules to go global. That to some extent has promoted global trade and investment, but most of the fruits have gone into the developed world. The United States has also spearheaded a winner-take-all mentality in economic globalization. All have resulted in a widening gap between the North and the South.

Sheriff Ghali Ibrahim, head of the department of political science and international relations at the University of Abuja, said Western-centric global rules have disadvantaged developing countries, including Africans.

In recent years, emerging markets and economies have called for reform. Economic globalization is no longer a handy tool for Washington to grab wealth as it wishes. Hence, once a strong advocate of economic globalization, the United States is now backpedaling — raising tariffs, scaling down tech exports, fomenting anti-globalization sentiment and even pointing the finger at the economic organizations it nurtured decades ago.

Furthermore, global governance must catch up to a fast-evolving economic globalization. With cross-border flows of capital, people, products, information and technologies, friction has inevitably occurred among countries. Economic crises will affect more regions. The lack of effective international coordination to cushion the impact of the COVID-19 pandemic and geopolitical conflicts has further exposed this problem.

Accomplishing the above ensures countries embrace economic globalization. The world should focus on making the bumpy journey smooth, not on whether to shift into reverse.

In the face of a fragmented world, this year’s WEF annual meeting emphasizes cooperation. On the economic front, cooperation among all parties is urgently needed to forge a more open, inclusive, balanced and beneficial globalization. In this regard, China is inspiring.

China has been an active cheerleader for economic globalization. Over the past few decades, the country has opened its door wider to the outside world and opposed unilateralism and protectionism. In 2022, the value of China’s foreign trade in goods hit another high, reaching 42.07 trillion yuan ($6.3 trillion).

It has firmly supported making economic globalization work for everyone. The country has called on all parties to better coordinate macroeconomic policy and championed more assertive representation for developing countries.

More importantly, the bridges and roads along the Belt and Road jointly built by Chinese companies and their foreign counterparts, support for the China-proposed Global Development Initiative, and the successful operation of such institutions as the Asian Infrastructure Investment Bank have all vividly demonstrated that economic globalization is not a zero-sum game but mutually beneficial.

Economic globalization is facing headwinds. Consensus is sorely needed. It is hoped that the global economic and political elites now gathering in the snowy Swiss resort town of Davos will inspire a befuddled world to have faith in economic globalization once again.