Whilst economic factors brought globalization into being, it is politics and the divergence of cultures and values that are driving it to implosion.
Xi Jinping has begun a tour in order to present the new economic strategy that will be behind China’s next five-year plan.
Because of growing hostility towards Beijing’s hegemonic ambitions, this strategy comprises refocusing on China’s domestic market, reducing external dependency in the fields of technology, food and energy, and winning leadership of the digital industry. This aims to counteract the trade offensive – and above all the technical offensive – launched by the USA.
In this new Cold War, the role played by ideology in the post-World War II standoff between the USA and the USSR has been replaced by the digital sector. On one side, the US is imposing more and more sanctions on Huawei, ZTE and SMIC (the semi-conductor manufacturer), is forcing TikTok to sell off part of its operations, forbidding WeChat to enter into contracts with American companies, and uniting thirty or so countries in the Clean Network project whose intention is to protect digital infrastructures from Chinese intrusion.
On the other side, Beijing is launching a data protection initiative that aims to impose its own global norms for 5G and the internet, whose separation is already under way.
Dividing up cyberspace not only worsens the break-up of globalization, it makes it definitive. On the trade front, break-up has come with the “new silk roads” and with American sanctions; on the industrial front, with the relocation of value chains; on the financial front, with Wall Street’s exclusion of Chinese companies; on the ideological front, with democracy on one side being placed in opposition to totalitarian capitalism and authoritarian regimes on the other.
But the two giants who are in conflict are not the only factors behind the bipolarization of the world. It is happening on all continents. In Asia, India’s rapprochement with Japan, Korea, Taiwan, Australia and New Zealand is designed to counter its encirclement by China. In the Middle East, the UAE is creating an axis comprising Israel, Egypt and the Moslem Arab world to oppose the non-Arab Moslem countries of Pakistan, Iran, Turkey and Malaysia. In Europe, there is an increasing gap between north and south on an economic level, and between east and west with regard to values.
Since 2008, there has been a movement towards fragmentation, considerably speeded up by the Covid-19 epidemic.
The world is heading for archipelization, caused by the return of governmental power and the decline of nations – central banks are replacing the markets in order to finance companies and public administrations – brought about by the formation of continental blocs and the disintegration of the institutions, tools and rules that made it possible to have cooperation on a global level and to regulate conflicts. Whilst economic factors brought globalization into being, it is politics and the divergence of cultures and values that are driving it to implosion, and the values of freedom are in the front line.
Polarization and confrontation are the fellow travelers of fragmentation. The pandemic and the major recession that it has caused have brought into question the appeal of big cities and the organization of companies and labor. They are also upsetting the pecking order of nations, companies and individuals. With regard to regions and countries, Asia is among the winners, as shown in the way Taiwan, South Korea, Singapore and New Zealand have handled the epidemic and in the strength of their recovery in terms of trade. In comparison, the USA is fading into the background and Latin America is experiencing a descent into hell.
The digital sector, healthcare and the food industry are benefiting from the epidemic, whilst transportation – particularly air travel –, tourism, hotels and restaurants have suffered lasting damage. The people who have been spared are those protected by their status (notably public servants), by the solidity of large companies or by stable incomes. Self-employed workers, artisans, shopkeepers, those in precarious situations, young people and casual workers have been hard hit.
The archipelization of the world brings with it an extremely high level of risk and of conflict. From an economic standpoint, it means a potential fall in growth, tougher competition and less international regulation. From a geopolitical standpoint, it means that the likelihood of major armed conflicts, including the use of nuclear weapons, is vastly increased. Prosperity, the maintenance of peace, and the survival of democracy in the 21st century depend on the reunification of nations and their cooperation. It is an opportunity for Europe, for it could become a testbed for reconciliation between national sovereignty and continent-wide integration, between resilience and openness, and between security and freedom.
(Column published in Le Figaro,14th September 2020)