"For people who say globalization is ended, in terms of levels, this is not true; in terms of change, it is true," said Martin Wolf, chief economics commentator at the Financial Times, London, at a recent event hosted by the Center for China and Globalization (CCG), a Beijing-based think tank. "We haven't ended globalization, but we have ended hyperglobalization."
"If you look at the statistics in aggregate, what has happened is that prior to 2008, trade was growing about twice as fast as world GDP, roughly. And since 2008, trade has grown roughly in line with GDP. It is still true today that we do more trade with one another across the world than we have ever done prior to 2005-2008," said Wolf.
In an interview after the speech, Wolf gave his views on three different topics: the end of the explosive growth of globalization, the shifting views of the West, and China-U.S. relations in a post-globalization world.
Martin Wolf, chief economics commentator at the Financial Times, London, delivered a speech at an event hosted by the Center for China and Globalization (CCG), a Beijing-based think tank, on February 22.
Developed countries are blaming developing nations for domestic failures
On the shifting views of the Western countries from supporting globalization to opposing it, Wolf said: "By and large, emerging and developing countries still think trade is pretty a good thing, because it's done rather well for them. But in developed countries, notably including the U.S., they now think it's a plot against them, even though they pushed it for half a century."
It is rather ironic as in the 1970s when Wolf worked for the World Bank, his job was to persuade the developing countries to accept globalization, yet now the developed countries are casting doubts.
"Because globalization has imposed adjustment costs upon developed countries, which they handled very badly and blamed on foreigners, particularly Chinese. And they wouldn't be prepared to confront the domestic issues in the way their economy and politics work which failed to ensure that the benefits of trade were widely shared," said Wolf.
Wolf accused Western politicians of wielding populism as a political tool. He called the former U.S. President Donald Trump a demagogue fanning the flames of populism. He argued that demagogic politicians take advantage of the anxiety of people who feel they have suffered from globalization, and make them to protectionists blaming everything that has gone wrong with them, above all, on China.
U.S. will unlikely cease the trade war against China
Wolf said another reason that developed countries have reversed their attitude towards globalization is a changing world in which China emerged as a major power.
"It is always possible that the Americans have woken up and realized that China is a great power, and they find this very difficult to handle," said Wolf.
Wolf further elaborated on the tension between China and the U.S., claiming the trade war launched by the U.S. will unlikely cease, "because. China is more or less a rival for the United States in the long term. So with this in mind, it's difficult for China to create a kind of harmonious world because you need two to tango."
Martin Wolf, chief economics commentator at the Financial Times, London, spoke at an event hosted by the Center for China and Globalization (CCG), a Beijing-based think tank, on February 22.
In a way, Wolf is both optimistic and worried about the future. He said that the globalization is still on track. "Globalization is still pretty powerful, but there are strong stresses upon it, particularly from the high-income countries," said Wolf.
"I think leaders of the major Western countries in Europe and America do not want a collapse in trade, finance or international relations more broadly, but that cannot be guaranteed. There are profound risks in the system which mostly originate from the side of politics, and that's what happened in the interwar period," said Wolf.
Author | Zhi Zhucheng (intern), Lydia Liu
Editor | Steven Yuen, James
