China is a major trading partner of over 140 countries and regions. — China Daily
THE United States used to champion globalisation and free trade, so why is it now back-pedalling and turning inward? This is a question raised by Chinese Ambassador to the United States Xie Feng recently.
Xie’s comments came at a point when “derisking” has become a novel buzzword across Europe and North America.
A closer look into the US’ narrative tells us that “derisking” is essentially about shutting China out and containing China.
An article in the Foreign Affairs magazine outlined three goals of “derisking”.
They are to limit China’s abilities in strategic sectors that have national security implications, such as cutting-edge semiconductors; to erode Chinese dominance of the market for certain essential inputs, including critical minerals; and to diversify corporate economic exposure more broadly to reduce the potential costs of a sudden disruption in trade between China and the West.
Stripped down to its most essential elements, “derisking” clearly has China in its crosshairs.
When put in the perspective of economic globalisation, “derisking” runs counter to the logic of global development.
Network of interdependence
Over the past decades, economic globalisation has turned economies around the world into a tightly knit network of interdependence.
It is a natural outcome of the international division of labour. However, “derisking” threatens to split the global market.
And a fragmented global economy will turn the world into competing regional blocs, leading to redundancy in industries, low efficiency, soaring costs and blunted competitive edge of businesses.
Dilma Rousseff, president of the New Development Bank and former Brazilian president, noted in her remarks at the 11th World Peace Forum that the very dynamics of globalisation, although currently weaker, has given rise to a deep interdependence among economies and regions of the world.
She went on to point out that disconnecting the world has thus become unworkable, and any attempts to erect insurmountable barriers between nations or countries are nothing but an extraordinary return to the Iron Curtain.
Though it is up to governments to reduce risks and diversify, the real risks, however, are not to be discerned through the lens of geopolitics.
Hammer and nail theory
As Xie aptly put it, if national security is used as a hammer, then everything will look like a nail. He concluded that one country’s security cannot be built on the insecurity of others, nor can a country keep its industrial chains stable if those of the world are not.
What are the real risks facing our world? A quick glance at the track record of the United States, a good teller of the “derisking” tale, might help.
By pushing for “derisking”, the United States is actually putting its own interests above those of the world and trying to maintain its global predominance.
From stoking camp-based confrontation and a new Cold War to recklessly meddling in other countries’ internal affairs, from invading Afghanistan, Iraq and Syria to creating and fuelling regional unrest and even conflicts, the United States is far from being the self-claimed champion of the “rules-based international order”.
It is essentially a “troublemaker”, not a Samaritan.
On the economic and financial front, the United States has imposed unjustified sanctions and engaged in “long-arm jurisdiction” over thriving developing economies.
It has flooded the world with the dollar before suddenly turning off the hose with aggressive interest rate hikes.
It exports economic and financial risks – sometimes crises – to the global market, raking in tremendous wealth from the rest of the world.
It ignores international trade rules, abuses the concept of national security to crack down on foreign firms, disrupts global industrial and supply chains, and is pushing the world into bifurcation.
Judging by this scorecard, the US, not China, is the real risk to global stability, and the world is clear-eyed about this.
China delegation
In the first half of this year, senior executives of German companies such as Volkswagen, Siemens and Adidas came to China together with the chancellor of Germany Olaf Scholz.
Heads of French companies including Airbus, L’Oréal and Alstom were part of president Emmanuel Macron’s delegation to China.
President Lula’s delegation to China included 250 Brazilian executives, including the chief executive officer of Vale. For them, China brings opportunity, hope and future to the world, not risks.
China, the largest developing country in the world, has been a powerhouse driving the world economy, contributing over 30% of global growth on average over the past decade.
It is a major trading partner of over 140 countries and regions. Its development has not only improved the lives of its own people, but also provided people in the rest of the world with myriads of inexpensive but quality products.
Economic globalisation
China’s development is a boost of confidence amid growing backlash against economic globalisation, a source of impetus for world economic recovery and growth, and an anchor of certainty in a profoundly uncertain world.
As noted by Chinese premier Li Qiang at the Summer Davos in Tianjin, we no longer live in a going-it-alone era.
With multiple crises hitting the global economy, the best way to navigate a volatile world and seize the opportunities of open trade is to go for more collaboration and globalisation reform.
“Derisking” is not a viable way out, let alone shutting China out. After all, our world is better off united, not divided. —China Daily/ANN
Yi Fan is a Beijing-based current affairs commentator. The views expressed here are the writer’s own.
