Globalization is a systematic process involving the integration of the world economy. However, with a series of actions taken by certain countries, the chief element among these being the trade war, the globalization process has not only slowed down and faced barriers, but is also experiencing new differentiation. This differentiation is reflected in many aspects, particularly in attitudes towards free trade, the impacts and restructuring affecting global industrial and supply chains, as well as assaults on international industrial investment, international technology, education, cultural exchanges and the flow of talent. There are also changing attitudes in immigration policies, even to the extent of creating rifts in the civilization of mankind itself.
The most serious differentiation in globalization is manifested in broader economic fields, and this is obvious from the financial to the industrial sectors. Speaking about the outlook of the large-scale U.S.-China trade war with uncertain future, Standard Chartered Group Chairman Jose Vinals said recently that as the tension between the two countries escalate, it is becoming "increasingly likely that the world will split in two". In an interview with CNBC right after attending the Institute of International Finance's spring meeting in Japan, Vinals predicted that some countries and companies would be "doing more business and operating in the half of the world which is globalized along the western line," while the other half may work "in the part which is globalized along the eastern line". Vinals believes that this situation can be called "a sort of bifurcation of globalization". He further pointed out that once this pattern of differentiation becomes a reality, it will be very unfavorable to the global economy.
Vinals is not the first person to raise warnings along this tone. In 2018, former Google CEO Eric Schmidt estimated that there would be two distinctly different forms of internet within the next decade: one led by the United States and the other by China. From the perspective of global internet development, although China's internet application industry has developed rapidly in recent years, the U.S.-led internet model still remains the dominant one. Although Schmidt is referring mainly to the internet in this respect, the reality is that the "Chinese model" has repeatedly shown its own characteristics in other areas of broader economic development. At the same time, the traditional Western-led globalization model is also undergoing changes. Everything that the U.S. President Donald Trump did after he assumed the presidentship is destroying the globalization paradigm that the United States led after the Second World War.
The impact of the trade war on globalization is also reflected in the adjustment and reconstruction of the industrial chain. This is not purely because of the industrial transfer brought about by the tariff issues, but also due to the split in the industrial chain caused by the U.S. ban. In the case regarding the global encirclement and suppression of Huawei, the Chinese tech giant's global supply chain system has been hit hard after the U.S. trade ban. Regardless of how Huawei's suppliers are rushing to stock up and subjectively express their regrets, as long as the Trump administration's policy remains, companies from the United States and other countries covered in the ban must abide by the Trump administration's hegemony.
The Daily Telegraph has recently revealed that the two European tech giants Nokia and Ericsson are "weighing drastic changes to their corporate structures, including setting up separate units in the Eastern and Western Hemispheres, in a bid to protect themselves against the escalating global trade war". This is because the two companies are also trying to mitigate any security concerns arising from the trade conflicts. Both companies, which produces equipment used to run 5G networks, have started drawing up emergency plans to move some of their most sensitive operations out of China and split up their supply chains so as to counter increasing national security concerns. Nokia is considering establishing an EU-only business unit for its 5G supply chain, so that there will be no interference or security violations due to its activities in China. Ericsson is focusing on plans to produce sensitive components and develop software using separate supply chains in the Eastern and the Western Hemispheres, hoping that this will reduce the likelihood for it to be trapped by the unclear regulations set by the European Union in addressing security issues.
It is obvious that in terms of both economy and business management, these two strategies lead to inefficient investment, which may hinder the development of new technologies and cause the risk of paying the high price related to repeated investments. Global supply chains, which are efficient up to now, will be artificially split, which will possibly lead to cost increases, and this increase in costs is likely to be passed on to end users. It should also be pointed out that this is one of the clearest signs of differentiation in globalization so far, and decades of globalization may be reversed due to protectionist policies being put into effect.
The wave of anti-globalization was not caused by Trump alone. In fact, Trump is just a single figure in this tide of anti-globalization. There are more profound factors behind the various phenomena of globalization. Take the global U.S.-China trade war as an example. Economically, it is a competition by the United States to put in its demand for the redistribution of global market space in this world of over-capacity. Looking at it from a strategic point of view however, this is also based on the U.S.' long-term suppressive behavior towards China, the latter often regarded as "long-term strategic competitor" in its new national competitive strategy.
We might not be able to expect the wave of anti-globalization to subsidize in the short term, and that globalization will return to the previous track that it used to be on. Although the long-term trend of globalization will not change, the globalization model will continue to become differentiated and evolve for quite a long period of time. Global production, market space and interest distribution too will continue to change. This is the change in the environmental that China will have to face in its future developments.
Final analysis conclusion:
Anti-globalization is a change in the process of globalization. Under the impact of the trade war, the previous manifestations of globalization are undergoing differentiation. The interests of numerous countries face impending systematic adjustments, China is one of the important stakeholders involved in such adjustments as well.
