Editor's note: "2020: Opportunities from Adversity" is a special CGTN series dedicated to reviewing the most startling events of the past 12 months and how they will impact the future. The second episode is on the COVID-19 pandemic. Jonathan Woetzel is director of McKinsey Global Institute, Tim Stratford is former assistant U.S. trade representative for China affairs at the Office of the United States Trade Representative, Noah Fraser is managing director at Canada-China Business Council, and Steven Lynch is managing director of BritCham China. The article reflects the experts' opinions, and not necessarily the views of CGTN.
COVID-19 has disrupted the integrated world. Borders are closed, international transportation halted, global trade suspended.
Will the virus kill globalization? Some populists believe and hope so. It's true that people are physically more distanced, but does this really mean the death of globalization?
"Globalization is changing. It has been changing for some time now. It's been digitalizing. It's been regionalizing. And it's been dematerializing. But it hasn't been going away. After COVID, in fact, in a pandemic world, that [globalization] will continue. We will continue to see the growth of intra-regional trade. We will continue to see even more growth in digital trade. And we will continue to see growth in the trade of services across borders," said Jonathan Woetzel, director of McKinsey Global Institute.
However, a rise in populism is impeding this process. As the world is struggling to trade, populists are enthusiastically touting nationalism, new barriers and decoupling.
"Theoretically, you could decouple, but it would require such a huge disruption in supply chains that it would have a real negative impact on the global economies and be very, very costly," said Tim Stratford, former assistant U.S. trade representative for China affairs at the Office of the United States Trade Representative.
The huge economic sacrifice hasn't deterred populists from their pursuit. In fact, globalization had started to retreat even before the pandemic.
Just take a look at Chinese tech giant Huawei, which several countries have sought to block.
"I can say from experience that companies like Huawei are trying very hard to integrate in the West," said Noah Fraser, managing director at Canada-China Business Council. "I think that in Canada we have a lot of jobs that have been invested in from Huawei. We have over 1,200 positions in Canada, so 1,200 mouths are being fed by Huawei in Canada every year. And this number is continuing to grow."
A ban on Huawei means job losses, soaring telecommunications costs and delayed 5G dividends. But for Western protectionists, these consequences pale in comparison with the need to contain the country they deem to be a threat. And a similar fate befell Japanese companies decades earlier.
"I look back to the 1970s and 1980s when Japanese companies were going to the West, there was a lot of distrust. There was a lot of concern about Japanese companies taking over the world, so to speak. We're probably encountering a little bit of that," said Fraser.
Politics should pave the way for economic growth. But in some countries, it is played at the cost of economics. And populist sentiment arises in this context.
Steven Lynch, managing director of BritCham China, believed there are many aspects to this. "Sometimes we must separate the politics from the business. I think China is actually very good at separating the politics from the business where business can thrive," Lynch said.
It's true. China is the first economy to recover from the pandemic. Its willingness to shield political divergences and cooperate is the key.
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