Globalisation still has a future despite geopolitical concerns

Researchers say that despite rising tensions between the USA and China, reports of an end to globalisation are premature.

The team from the University of Waterloo, the University of British Columbia and the China Europe International Business School in Shanghai have undertaken a detailed survey, the findings of which, challenge the widespread assumptions that the rivalry between the United States and China, will  only further escalate and split the world into two hostile camps.

As the ongoing dispute around the shooting down of alleged Chinese spy balloon in North American airspace continue, Dr. Victor Cui, a professor at Waterloo’s Conrad School of Entrepreneurship and Business, said analysis shows that most likely the assumed scenario isn’t going to happen.

“First, the potential economic cost of doing this is too high for the US, China, their allies, and the entire world,” Cui said. “The breakdown of globalization ultimately hurts consumers, which we are all experiencing too well. Globalisation is not over.”

Beyond economic realities, the researchers found that the US-China rivalry is based, in part, on misunderstanding. For example, China’s intentions to seek ‘self-reliance’ were largely defensive while being interpreted in Washington’s narratives as solely aggressive. They added for their part, China’s communist leaders bristled at what they saw as American attempts to limit China’s growing economic and political power.

The authors suggest that Washington may have overstated China’s techno-nationalistic threat to the liberal world order for a few reasons. First, China increasingly centralises top-down control over its innovation effort, which is unlikely to sustain its rapid technological advancement. Second, China may not be able to continuously inject the funding required to sustain its technology innovation because of its continuing economic growth decline. Moreover, China also faces a growing shortage of young productive workers in the next decade due to its former one-child policy.

The researchers conclude several key assumptions, that China’s rapid pace of technology innovation will accelerate, and that China may establish its own technological hegemony and surpass the US in some strategic fields, are overstated.

“We expect China’s threat will slowly disappear, it is not sustainable,” said Cui, the Conrad Research Excellence chair. “Once the fear of China’s rise declines in the US, we expect the disengagement to slow down and even dissipate. We can be conservatively optimistic there will be changes.”

The researchers argue the entire world would benefit if the U.S. and China acted as partners instead of rivals, as they can more effectively manage existential global challenges such as inflation, climate change and future pandemics while minimising the risks of military confrontations.