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Anthony Rowley

With globalism under savage attack by the Trump administration, it may not appear to be an opportune time for Beijing to be hosting a forum on China and globalisation, involving former Chinese ministers and others.
Yet this is the very moment when globalisation needs help, if planet Earth and its inhabitants are to survive, let alone thrive and prosper. Someone needs to take a lead and if that is China, then power to its arm while the United States recovers from its ignominious retreat under Donald Trump.
The severity of the damage wrought by Trump and Covid-19 in the form of trade wars, ruptured supply chains, slumping business confidence and a collapse in economic growth was recently underlined by data from the Organisation for Economic Cooperation and Development showing an accompanying dramatic slide in business investment.
Unlike portfolio investment in stocks and shares, which is subject to wild swings on the back of capital flows and sentiment (and which recent equity market euphoria has shown to be out of touch with economic reality), foreign direct investment in business assets reflects “real economy” prospects.
Trade can recover fairly rapidly if business and consumer confidence is solid, but investment in manufacturing and services does not bounce back readily, especially after the traumas caused to sentiment by a combination of the pandemic and the economic nihilism of the US administration.


This is why the FDI trend is worrying. OECD data show that global FDI flows fell by 50 per cent in the first half of this year compared to the second half of last year, to US$364 billion, the lowest half-year level since 2013, and the decline is forecast to continue.
“Globalisation is falling in investment as well as trade,” the OECD said – and we could substitute the word “failing” for falling. This is not simply a post-pandemic phenomenon; it has been going on for several years during Trump’s administration, and the decline has proved to be worse than even the most pessimistic scenarios.
We now globalise each other’s problems
The slump in cross-border private investment comes just when governments everywhere are being urged by the OECD and the International Monetary Fund, among others, to step up public capital investment to prevent the global economy from sliding into a state of declining output, lower productivity, stagnant growth and rising unemployment.
China’s initiative to resuscitate globalisation is thus timely, and reminiscent of the country’s push to stimulate international investment and growth with the launch of the Belt and Road Initiative in the aftermath of the 2009 global financial crisis. It is also in keeping with China’s new opening-up policy endorsed at the recent fifth plenum – its most important political meeting – in Beijing.


Reviving belief in globalism, and the globalisation process needed to achieve it, is also critical as the world seeks to cope with the massive social and economic damage being wrought by the Covid-19 pandemic. The virus has no respect for national borders and can only benefit from the economic nationalism that has characterised the Trump era.
Fortunately, some of the multilateral or global institutions created in more enlightened decades, such as the IMF and the World Bank, have managed to escape the worst Trump tantrums (by virtue of their relative independence in financial funding). But they cannot continue their global activities without the full support of globally-minded governments.
Then, there is the massive challenge of dealing with climate change and in this regard, the need for global thinking and concerted global actions has never been greater. Saving the planet from intolerable heat, all-consuming fires, droughts, inundation by rising seas and so on, cannot be done in segmented areas and behind national borders.


China alone, of course, cannot revive the spirit or reality of globalisation. It will require the active reinvolvement of the US in forums such as the World Trade Organization and – given the link between the pandemic and economic recession – the World Health Organisation.
The new US administration will need to state explicitly that it will continue to honour its international treaty obligations. Even if it does not rejoin what has become the Comprehensive and Progressive Trans Pacific Partnership, it must pledge not to simply walk away from such partnerships.
Most of all, national leaders need to behave with a sense of global obligation, and an end to the Trump era should be an encouraging development in that regard. The US may have lost much international credibility over the past four years but it is still important enough to set an example.
According to the Beijing-based think tank Centre for China and Globalisation, the annual China and Globalisation Forum has become a “magnet” for officials and businessmen to “debate the most pressing issues regarding the development of globalisation”. That debate is more critical than ever now.
Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs


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China is taking a lead amid a worrying plunge in global investment, a pandemic-ravaged economy and a climate crisis. But its efforts to shore up globalisation won’t work unless the US returns to engagement, for a start



China is taking a lead amid a worrying plunge in global investment, a pandemic-ravaged economy and a climate crisis. But its efforts won’t succeed unless the US returns to engagement, for a start.


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Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


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