Phoenix New Media, a Hong Kong-based website (Phoenix TV, a Hong Kong-based satellite television station belongs to the same group), published a Xinhua article titled “Experts believe that Protectionism raising its Head will exacerbate Risks for Economic Recovery” on Thursday last week. The authors were three Xinhua correspondents – Wang Bingkun (王炳坤), Deng Qian (邓茜), and Li Zheng (李铮) – reporting from Dalian, where the 2011 Davos Summer Forum was held until Friday last week. A forum with the topic “Against the Tide of Globalization” (反对全球化浪潮) had met with a lot of interest, wrote the Xinhua correspondents.
[Links within blockquotes added during translation – JR]
On the background of the current European and American debt crisis, many people are pessimistic, and doubts and reflections are cast on the question “if globalization is actually right or wrong”.
“Today’s global interconnectedness (关联化), integration and countries’ interdependence with each other (你中有我)1) means that the prosperity of one is the prosperity of all, and the loss of one is everyones’ loss”, said one of the debators, WPP advertising company CEO Sir Martin Sorrell. When everyone profited from good economic trends, beneficial for all countries, only few people would differ [about globalization], but once the global economy’s road became slippery, with no country being spared, a trend of anti-globalization thoughts would frequently become very vocal.2).
The perspective of a weakening economy has made some countries establish trade barriers in great confusion (纷纷竖起保护主义藩篱). One of the world’s four greatest accounting companies, Ernest & Young, in their “Business Risks Facing Mining and Metals 2011 report”, believe that strategic risks faced by mining companies have increased, and that resource nationalism had become the biggest of these risks. The “report” says that during the past 12 to 18 months, at least 25 countries had, by taxes or royalties, strengthened their revenues, or announced their intention to do so.3) Also, a rise in resource nationalism had been shown in the participation, control, and adjustments, authorized mining (授权选矿), and phenomenons such as enforced government participation etc.. Protectionism was also growing.4)
Many economists had expressed their concern about globalization as it was growing in intensity (愈演愈烈), wrote the Xinhua correspondents. IMF vice president (or managing director) Zhu Min (朱民) was quoted as saying that global economic recession needed to be confronted jointly by everyone (全球经济衰退风险需要大家共同面对), because if every economic entity raised trade barriers and fought on its own (各自为战), it would exacerbate the uncertainties about a global economic recovery.
The correspondents then quote from Gideon Rachman‘s Financial Times blogpost of September 12, which had said that if, in the emerging world-wide trend of protectionism, all country’s governments used tariffs and exchange rate policies to protect domestic markets, rather than cooperating with each other, this would only lead to even greater disaster.5)
People opposed to globalization also pointed out that all kinds of local disasters, such as natural disasters, or debt crisis, or political instability, were inflicting global harm and losses. A small number of countries’ debt crisis had turned into a global crisis, the Xinhua reporters quoted an American consultancy CEO – globalization was in fact a double-edged sword (全球化是一柄双刃剑). Certain countries, and international organizations, had been lacking leadership and hadn’t been able to control the situation. More scientific and fairer rules, and an innovative system of international cooperation were needed, the correspondents quoted another (apparently not Chinese, although “scientific” might suggest that) Forum participant.
IMF vice president Zhu Min had the last words in the article –
Zhu Min says that globalization must not go backwards, and especially when the global economy is in a difficult situation, it requires national policymakers’ resolve and confidence, common advancement (携手共进, literally “advancing hand in hand”), and only with even more openness, and measures taken in mutual trust, there is hope for reviving the global economy.
The Xinhua article still reflects China’s policy – or its official harmonious artwork -, but there is some disagreement among Chinese academics, and not necessarily only among Neo-Maoists. “Public opinion” in China, however, won’t turn against their globalization-friendly elites as easily or visibly as people may do in Europe, North America, or even Brazil or South Africa (the latter of which, even if a BRIC candidate, wouldn’t resist every “temptation” of protectionism, if the Ernest & Young report – see further above – is right).
Rather, headlines like “China has become trade protectionism’s greatest victim” (中国已成贸易保护主义最大受害者) work China’s “public opinion”. The headline claims to quote a government official on a recent workshop with Chinese exporters in Xiamen, held by the Chinese ministry of commerce.
Or, in other words: globalization is good, but some (especially western) participants are refusing to play by the rules.
1) In full, it should be “你中有我，我中有你”.
2) This probably isn’t Sorrell’s exact wording. I couldn’t find the English-language original of this Chinese translation online.
3) In the report’s own words: “From the outset of 2011 we have seen numerous countries changing their fiscal environment (taxes, royalties), and some have invoked ‘use it or lose it’ clauses.”
4) If still referring to the Ernest & Young report, the article leaves out the countries the report’s summary is naming in this context, i. e. Ghana and South Africa.
5) Rachman’s blogpost in full can be found here.
» Is Public Opinion turning against Globalization, CNBC, Sep 15, 2011
» “If EU nations can demonstrate their sincerity several years earlier…”, sina.com, Sept 15, 2011
» The Costs of Running a Trade Surplus, Aug 7, 2011
» Chinese Export Restrictions violate Global Rules, July 6, 2011
» Creative Destruction or Development, March 15, 2010
» Welcome, Trade War, January 9, 2010
» Doha Round: Selling the Failure, August 2, 2008
» Michael Sata wins Presidency, NY Times, Sep 23, 2011