Sunday, July 5, 2020

OPINION AND ANALYSIS | 30-11-2018 05:10

Globalisation and its discontents

Unless he decides to keep his mouth firmly shut and close his Twitter account for the duration, both of which are highly unlikely, Trump will, as always, dominate the proceedings.

To the evident satisfaction of enemies of whatever happens to be the status quo, whose mission in life is to get people to march up and down streets, shout slogans and (if they feel they can get away with it) hurl stones and even Molotov cocktails at the cops, the travelling roadshow known as the G20 has hit Buenos Aires to celebrate yet another summit in which “world leaders” will go through the motions of discussing weighty topics before coming up with a suitably uplifting final statement.

On this occasion, that may be asking too much. Donald Trump is prone not only to dismiss the pieties that are currently enshrined in what is assumed to be the international consensus, but also to make his contempt for most of them scandalously clear. His views on such matters have far more in common with those of the protestors who are trying to besiege the gathering than with the ones favoured by his alleged peers. Unless he decides to keep his mouth firmly shut and close his Twitter account for the duration, both of which are highly unlikely, Trump will, as always, dominate the proceedings.

The worldwide “Trump derangement syndrome,” the notion that were it not for the unpredictable behaviour of the disruptive US president it would be fairly easy to solve the problems upsetting “the international community,” has made life easier for other potentates by helping them distract attention from the difficulties confronting them back home. Though none of them has much idea about what should be done when tens of millions of jobs get devoured by automation, how to narrow the rapidly growing gap between the incomes of a few and those of a hard-pressed majority or handle social unrest attributable to large-scale immigration from countries whose mores are incompatible with those of their increasingly reluctant hosts, and much else besides, they can always win a couple of brownie points by denouncing the latest Trumpian Twitter outrage.

  In the G20 get-together, Trump’s principal antagonist is expected to be Xi Jinping, an autocrat whose country should soon boast a gross national product bigger than that of the United States and then, unless it stumbles badly, as it well could in the not too distant future, be bigger than that of the entire Western world put together. To achieve this, China, with its almost 1.4 billion inhabitants as against the slightly more than 1.1 billion of the US, Canada, Australia and Europe (including Russia, Ukraine and Belarus), combined, would need to become about as productive per capita as South Korea, a goal that already seems to be within reach.

By then, the world will have entered an entirely new era. Xi knows this. Unlike Trump, who for good reasons feels the US will have to move quickly and make full use of its many assets if it wants to remain top nation for much longer, Xi thinks his country can afford to bide its time and play a long game by trying to look as innocuous as possible in the eyes of Westerners while it keeps getting richer and builds up its power by taking advantage of the opportunities provided by relatively free trade.

The Chinese clearly believe that their hour has finally come and others had better get used to it. In their own neighbourhood, they have adopted fairly aggressive policies, claiming sovereignty over wide stretches of water despite the objections of the Vietnamese, Filipinos and Japanese and building military bases on recently constructed artificial islands. At home, they are trying to “re-educate” members of the Muslim minority in special camps in an effort to make them more like their Han compatriots, if that is the word. Needless to say, were a Western country to do the same the entire “Muslim world” would react with fury, but as China is thought to be impervious to outside criticism, most Muslim leaders have preferred to remain silent.  

Globalisation and the discontents it is bringing in its wake are in large measure the result of China’s apparently unstoppable rise. For poor countries such as Argentina, competing with the US and Western Europe, where wages have long been far higher, proved hard enough. Competing with China, where labour costs are still much lower, has turned out to be far more difficult. Without protectionist barriers disguised as trade agreements, China would have taken over the lucrative international clothing market 30 years ago when shops in Argentina and elsewhere suddenly started offering decent enough garments that Raúl Alfonsín, among others, thought were criminally cheap. Since then, China’s ability to produce immense quantities of ever more sophisticated consumer goods and sell them at accessible prices has increased so much that it has helped prop up living standards in the developed world. It also prevented other countries from making headway in what they, along with most development economists, had assumed would be their natural markets. Luckily for the laggards, China has moved on and is now letting low-wage countries like Bangladesh do what it once did.

Argentina and Brazil have been relegated to the same league. As things stand, neither has much chance of building a manufacturing base capable of taking on China’s or, for that matter, Japan’s, North America’s or Europe’s. Much as nationalists, who for decades made industrialisation a priority, may dislike the idea, for the foreseeable future they will have to supplement their earnings from the export of farm products plus raw materials with tourism and what are generically called services which, by and large, depend on the presence of a highly educated workforce.

The challenge China poses to the rest of world is a formidable one not only because there are so many Chinese but also because a considerable proportion of them are determined to make the most of their many talents. Like 19th century Germans and Japanese, they appreciate that “human capital” is their greatest asset and are doing their utmost to develop it.  There are not that many “snowflakes” or devotees of what are scornfully described as “grievance studies” in China these days, but there are a huge number of young men and women who like nothing better than coming to grips with the hard sciences, engineering and other demanding disciplines, as well as learning English or, with the consummate skill that comes from much practice, playing European classical music which, happily, has found a new home in the Far East.

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James Neilson

James Neilson

Former editor of the Buenos Aires Herald (1979-1986).

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