Question

Please discuss the trend of de-globalization and nationalism among the world in recent years, and what China and England should do to cope with this situation in your opinion?

Answer 1

In the light of various social, economic, diplomatic, and political events and incidents across the world, many countries have commonly incorporated the notion of de-globalization and nationalism into their economic and social policy agendas and mechanisms. In business and commercial spheres, such major shifts or modifications in the policy-making approach by the governments in many countries essentially implies lower economic and commercial transactions or exchanges characterized lower overall volume of international trade and movement of goods and services across international borders and additional administrative and economic restrictions on international trade. Now, considering the contemporary global scenario which is comprehensively dominated by the effects of commercial and economic globalization, such or anomalous aberrant move by the respective countries compels us to reconsider our resistive mechanism and perspective against adverse global events and incidents. It evidently implies that many countries are now emphasizing on restructuring their internal or domestic policy framework based on the practical complexities and adversities caused by various socio-economic events such as excessive immigration influx into the countries through domestic borders, unexpected shocks or fluctuations in the international market for goods and services, poorly developed domestic infrastructures and resources, the spread of global contagion such as COVID-19, and so forth. For example, it has been long debated that less stringent and restrictive border policies and immigration policies by countries such as the US have caused significant unemployment among the domestic citizens or civilians and slowdown or downturn of many of the domestic businesses. It may cause a major modification of the immigration policies of the country focusing mainly on safeguarding and prioritizing the economic opportunities of the national citizens. As regarding many developing countries, recent unexpected supply shocks and adverse fluctuations and unstable conditions in the international market have compelled the government of these countries to rethink the trade policies with an emphasis on various nationalist economic policies such as import-substitution, subsidy-led commercial or economic growth of domestic firms/companies and companies, development of new products and services through appropriate modifications in factor/input endowments, etc. to reduce excessive dependence on import. Most notably, the recent global outbreak of COVID-19 pandemic has also adversely impacted the international trade scenario as the overall volume or level of trade has decreased considerably across international borders. With the ongoing global economic downturn or slowdown, the GDP level of many countries has decreased alarmingly with relatively slower GDP growth rates in most countries across the world. As the income level of people has decreased globally following the onset of the contagion, the overall consumer demand for goods and services in the international market has dipped considerably contributing to the lower volume or scale of international trade. As a consequence, many countries are now increasingly reducing their dependence on international trade for economic growth and alternatively focusing on stabilizing the market conditions and developing internal infrastructural facilities within the domestic economy to attain and maintain sustainable economic growth and stability, considering the recent tough times.

The contemporary shift towards de-globalization and economic centralization can possibly have a profound impact on countries that are predominantly dependent on international trade activities such as China. China has essentially dominated the global manufacturing market for a significantly long period with export supply to most of the countries around the world. With apprehensions of the global economic downturn and reduced export demand in the international market to continue even after the viral contagion, it would expectedly impact the overall trade situation of the country with reduced export levels of various manufacturing products or commodities. As a protective mechanism against such impending predicament, the Chinese government can emphasize on various alternative policies to export such as the expansion of consumer demand of goods and services within the domestic economy through various expansionary fiscal and monetary policies such as income tax credits and relief programs and interest rate reduction which would directly stimulate consumer demand for domestic goods and services. Alternatively, the government can also enforce various restrictive trade policies such as import tariffs, trade quotas on import, etc. which would stimulate the economic or commercial growth of domestic businesses, firms or companies and strengthen the domestic markets accompanied by a simultaneous increase in consumer demand in the domestic economy. This would possibly lead to an increase in the GDP level and potentially improve GDP growth rates of the country.

Now, following the BREXIT and the onset of the outbreak of COVID-19, the overall trade situation or scenario of UK or England has been severely impacted. With a sustainable decline in the export demand for various goods and services in the international market, the overall trade volume of the country is also expected to decrease potentially. The ongoing economic slowdown in the country has further exacerbated such bleak trade-related economic predictions. Following the BREXIT, UK is officially free from the trade-related mandates and restrictions of the EU and therefore, can implement its trade policies freely and autonomously which could ideally benefit the country in developing its trade restrictions such as import tariffs, enhancement of customs duties and taxes, etc. and formulate various import-substitution policies to strengthen the domestic markets for various goods and services. Hence, notwithstanding the negative trade impacts of BREXIT, Uk can essentially utilize its non-compliant trade agreements with the EU to promote various protective mechanisms against the economic meltdown in the international market for goods and services such as import restrictions and mostly developmental conducive and favorable market situations in the domestic economy to promote and sustain economic growth in the near and distant future.