As we bunny hops into lunar rabbit year 2023, there is a marked disagreement between discourse on globisation and the global economic data analysis of such worldly phenomenon. On one perspective, we have many a narrative of deglobalization and decoupling. On the other hand, various statistics indicate “an inertial continuity in trade and investment patterns” according to Tooze, Chartbook #192.
Globalisation has encouraged companies to restructure their operations internationally through outsourcing and offshoring of activities. Firms try to optimise their production processes by locating the various stages across different sites.
International production, trade and investments are increasingly organised within so-called global value chains (GVCs) where the different stages of the production process are located across different countries.
There is a strong trend towards the international dispersion of value chain activities such as design, production, marketing, distribution, etc.
Insofar as within many of the World Economic Forum essays is concerned, the discussions are not about deglobalisation, but slowbalisation, or a plateauing of globalization.
Indeed, trade trends between China and the rest of the world and between Emerging Markets hardly suggest a sudden stop to globalization.
That dynamic of integration continues.
How should we look at this phenomenon?
It's nothing more than a twisted thrust on US-China competitive rivalry.
take Washington seriously it is hard to avoid the conclusion that whatever the statistic tell us about the current state of affairs, the United States is bent on revising the world economic system. They intend to reprioritize domestic production and to face up to the historic challenge posed by China’s rise. And the administration is not alone in this. If there is one thing that America’s divided polity can agree on, it is the necessity to confront China.
Just take a look at the latest round of sanctions being targeted at Huawei
or
the continuing War on Chips.
Listen to Cyrus Janssen on the prevalence and performance of multinational firms in China.
REFERENCE
IMF, 15th.Jan 2023, Geo-Economic Fragmentation and the Future of Multilateralism
or, coined by Tooze, Chartbook, 2nd February 2023 as “slowbalisation”: