SNAPSHOT December 9, 2016
The End of Globalism
Where China and the United States Go From Here
CARLOS BARRIA / REUTERS
T
By Eric X. Li
Audio Edition
☰ SCHUYLER FOERSTER
In the new era ushered in by Trump’s victory, the Chinese have the most to
gain—or to lose.
W
hen it rains, it pours. As the Great Recession, eurozone crisis, stalled
trade deals, increased conﬂict between Russia and the West, electoral
revolts against European political elites, and ﬁnally Brexit followed the
2008 ﬁnancial meltdown, it seemed clear that globalization was running
out of steam. Yet few expected that its opponents would claim the top prize—the
White House—and so soon.
World powers are now scrambling to react to Donald Trump’s paradigm-shifting
election as president of the United States. Japanese Prime Minister Shinzo Abe, after
repeatedly expressing concern about a potential Trump presidency and pointedly
meeting with only Hillary Clinton before the election, rushed to New York for face
time with the president-elect. European leaders have been more ambivalent, with
German Chancellor Angela Merkel even putting conditions on working with Trump.
And the Russians have seemed downright gleeful; in a congratulatory note, Russian
President Vladimir Putin wrote that Trump’s victory could bring “a constructive
dialogue between Moscow and Washington on the principles of equality, mutual respect
and real consideration.”
Yet the feelings of perhaps the most consequential power—China—remain somewhat
unclear. During the campaign, China was a primary target of Trump’s dissatisfaction
with trade. Yet Trump’s likely jettisoning of the Trans-Paciﬁc Partnership (TPP) trade
agreement would immediately beneﬁt China. And for obvious reasons, his antiinterventionist
foreign policy outlook suits the Chinese. For now, there are signs that
Beijing is still processing the enormous development and is calibrating its response.
It better hurry. In the new era ushered in by Trump’s victory, the Chinese have the
most to gain—or to lose. And as the world’s second-largest economy and its largest
trading nation, China’s response could mean the diﬀerence between prosperity and
stagnation, and even war and peace, around the world.
THE RISE AND FALL OF GLOBALISM
Globalization started as an innocent enough concept in the 1970s: the world was
becoming increasingly connected through trade, investment, travel, and information.
But after the Cold War, it was injected with an ideological component: globalism. And
now one can hardly distinguish between the two.
Globalism is rooted in the neo-liberal doctrine of the Washington Consensus, which
was initiated by the ﬁrst post–Cold War U.S. president, Bill Clinton, and carried out
by the successive administrations of George W. Bush and Barack Obama. It envisioned
a world moving inextricably toward the adoption of a uniﬁed set of rules and standards
in economics, politics, and international relations. National borders would gradually
lose relevance and even disappear. Cultural distinctions would give way to universal
values. Electoral democracy and market capitalism would spread the world over.
Eventually, all countries would be governed in more or less the same way.
The process would be backed by the United States’ hard and soft power. Indeed, it was
partially according to this logic that neo-liberalism’s oﬀspring, the neo-conservatives
and liberal interventionists, took America to war in Afghanistan and Iraq. And therein
lies the problem; globalism was a Trojan Horse. It devoured globalization, turning it
into a force that seemed unstoppable until it collapsed under the weight of its own
hubris.
In the West, the leading disciples of globalism became its greatest beneﬁciaries. Wealth
and power concentrated at the top, among the owners and deployers of capital, who
favored free trade, multiculturalism, multilateral institutions, and even regime change
and nation building in foreign lands. But their vision harmed the vast majority that
constituted the middle class. Just one generation after winning the Cold War, the
United States saw its industrial base hollow out, its infrastructure fall into disrepair, its
education system deteriorate, and its social contract rip apart.
Beyond the economic damage, changes in social values propagated by globalism
threatened social cohesion. The political scientist Robert Putnam captured the process
best in his important book, Bowling Alone, in which he described in painful detail the
collapse of American communities. In the name of globalization, in other words,
American elites had been building an empire at the expense of a nation.
The same thing happened in Europe. Technocrats in Brussels, along with their allies in
national capitals, pushed an ever-expanding set of standards onto an ever-expanding
European Union, relegating to the backburner the interests of the people in its member
states. In some European countries, youth unemployment reached and stayed at 50
percent.
Now the globalist elites have been overthrown at the very same ballot box that used to
sustain their rule.
THE VIEW FROM BEIJING
China, more than any other developing country, has beneﬁted from globalization. It
saw itself transform from a poor agrarian economy into a global industrial powerhouse,
all while lifting more than 600 million people out of poverty. Yet China chose to
engage globalization on its own terms, embracing connectivity while decisively
rejecting globalism. In turn, China was able to strengthen its one-party political system
and open its market according to its own national development priorities.
Perhaps sensing as much, Trump has taken to blaming China for many of the United
A Trump supporter leaves a rally for Democratic primary candidate Bernie Sanders in New York, April 2016.
States’ ills. This seems wholly unfair. Chinese leaders simply exercised their
responsibility to do what was best for their people. They would have been in the wrong
if they hadn’t. But it is also wholly understandable and justiﬁed for Trump to want to
do what is best for the American people—to put, as his slogan goes, “America First.”
Rather than balking, China should see this as a teachable moment. The awakening of a
large portion of the American people should not be viewed as a wholesale rejection of
China or as a precursor to unavoidable and fundamental conﬂicts. Rather, it should be
seen as a study in how to engage the United States in a new era.
The lesson comes at an important moment. China’s opinion leaders tend to get their
information about the United States from American elites. So they are just as
disconnected from Middle America as those in the country’s own newsrooms and think
tanks. As such, they are susceptible to seeing Trump’s supporters as “deplorables,” as
Trump’s rival, Hillary Clinton, put it, who are racist, uneducated, and misogynistic.
And that would be a grave misjudgment.
China would do better to look in the mirror to understand the ways in which the
United States and Europe are changing for good. The Chinese have been among the
loudest voices criticizing the one-size-ﬁts-all model of globalism and calling for the
world’s nations to be allowed to pursue their own development paths. As Chinese
President Xi Jinping famously said, “One could only know if a pair of shoes are good by
wearing them.” Trump, it seems, is ready to try on some new ones for America.
Meanwhile, Trump’s non-interventionist approach to the world—he has emphasized
that it was “a dangerous idea that we could make Western democracies out of countries
that had no experience or interest in becoming a Western democracy,”—must hearten
the Chinese.
No doubt, there will be conﬂicts as Trump pursues American national interests. But the
grievances behind his rise deserve China’s attention and due respect. If, for example,
Trump were to be less friendly to China on trade, as is expected, China would do well
to exercise a degree of restraint. If it responds with tit-for-tat escalation, the risk of a
geopolitical conﬂict is real. In such a scenario, both China and the United States would
lose.
ROOM TO MANEUVER
Chinese leaders, having proved wise over so many years, should see unprecedented
opportunities to pursue common interests with Trump’s America.
China’s ideas are fundamentally compatible with Trump’s vision. Strong sovereign
nations are paramount to a functioning international system. The primacy of culture
must be recognized, and enforcing uniform rules should never take precedence over
national considerations. Multilateral institutions, moreover, should not be used to
suppress bilateral engagements when bilateral arrangements are more eﬀective. All
these statements could have been uttered by Trump or by Xi.
On a practical level, there is a wide range of policies that could beneﬁt both the United
States and China. One of Trump’s most important initiatives is to rebuild America’s
decrepit infrastructure. He has promised one trillion dollars in spending, which might
not even be enough. His is a laudable goal that would infuse the U.S. economy with
much-needed vitality by creating jobs and by building new roads, airports, and dams
and upgrading existing ones. But challenges, namely ﬁnancial constraints and industrial
capacity, abound.
Had the globalist elites been more modest in their goals, they might have been able to push their
vision further. But it appears to be too late.
China understands a thing or two about building infrastructure. And as his many
campaign speeches indicated, Trump knows it. On the campaign trail, Trump
complained loudly that, compared with China, America’s infrastructure was “third
world.” China could bring its considerable capacities to bear in the United States. For
one, it could bring the United States into the Asia Infrastructure Investment Bank
(AIIB) and supply industrial capacity on favorable terms and relatively quickly. This
would signiﬁcantly beneﬁt China, which needs to deploy its excess capital and capacity.
And there is no better place to do so than in its largest trading partner.
In the area of geopolitics, there are likewise signiﬁcant common interests. Both Trump
and China seem to recognize that the gravest threat to world peace comes from
nonstate actors. One of the worst injuries globalism has inﬂicted on the world has been
to weaken the state just as the threat of transnational terrorism has grown. By erasing
national borders and diminishing the powers of national governments without
providing a good replacement, globalism has created a more dangerous world. Over the
years, of course, globalists have condemned China for a supposedly regressive
insistence on protecting its national sovereignty. But China certainly seems to have
fared better in protecting its people’s safety and interests. China and Trump’s America
can ﬁnd much common ground in that.
Even on trade, there is potential for convergence. The globalist elite narrative presents
a dichotomy between free trade and protectionism. Anyone who eschews global
standardization risks being labeled a protectionist. (In fact, China has frequently been
accused of protectionism on those grounds.) But the globalists’ dichotomy is false. It is
possible to promote trade and to protect legitimate national interests at the same time.
For example, China’s proposal for trade expansion in Asia Paciﬁc, the Regional
Comprehensive Economic Partnership (RCEP), speciﬁcally allows for many
diﬀerentiations on tariﬀs and industry standards based on participating countries’
varied economic and political conditions.
By contrast, Obama’s TPP was solely designed to enforce a set of uniform rules
regardless of the particular requirements of nations at very diﬀerent stages of
development. Ironically, many Americans now see the agreement as unsuitable to their
country’s own needs. As China restructures its economy to rely less on exports and
more on domestic demand and service industries, which are higher value-add, and as
the United States seeks to rebuild productive capacity, the two countries are in a good
position to explore new approaches to expanding their trade.
Last but not least, Trump seems to intuitively grasp the damage done to the United
States by what the historian Paul Kennedy called imperial overreach. The desire by
American elites to remake the world in their country’s own image has cost them—and
the world—dearly. The United States has less than ﬁve percent of the world’s
population and about 20 percent of its total GDP, but it accounts for 40 percent of its
total military expenditures (that ﬁgure reaches half in some years). Trump has said that
he would like to curtail such interventionism, and global elites have derided him as
A worker inspects a mask of then-presidential candidate Donald Trump in Jinhua, China, May 2016.
isolationist. But there is plenty of room between a United States that insists on telling
other countries how to govern themselves and total disengagement. For example, the
United States should remain engaged on Middle East issues, but end eﬀorts at regime
change or nation building there.
It is very much in China’s interest to encourage Trump’s shift away from an
ideologically driven worldview. And, as the second largest economy in the world, China
has a responsibility to help maintain global stability. It could do so by moderating its
own geopolitical postures in the Asia Paciﬁc so as to foster a more peaceful region, as it
has already done with the Philippines. China could also share the burden in the Middle
East, where it is fast becoming the region’s largest oil importer and has a long-term
interest in stability.
A NEW WORLD ORDER?
Trump’s victory was not an accident. It was the culmination of structural changes
within American society that elites had ignored for too long. These forces will continue
to push the United States and the world down a diﬀerent path than the one they’ve
been on for 25 years now. It is critical that Chinese leaders see this reality and respond
accordingly. If China gets it wrong, trade wars, geopolitical confrontations, and even
military conﬂicts could follow. It would be a classic case of the Thucydides Trap, in
which a rising power strikes fear in an established power and tensions escalate into war.
The United States has legitimate reasons to place itself ﬁrst in its dealings with the
world. China, more than any other nation, should be capable of understanding that.
And China, also more than any other nation, could oﬀer Trump’s America room to
successfully adjust its national priorities.
The death of globalism does not mean the end of globalization as the idea was
originally understood. On the contrary, interconnectedness will probably continue to
increase, driven by secular trends in technology and economics. Eﬀective global
governance, in other words, is needed more than ever. But it can no longer be based on
the narrative of globalism.
The world needs a new order grounded not in twentieth-century ideological fault lines
and the idea that history would soon reach its end, but in respect for diversity among
nations, state sovereignty, and cultural integrity. Instead of trying to run the world
according to a singular set of global standards, nations can cooperate freely in ways that
are suited to their particular circumstances. Only strong sovereign states can eﬀectively
cooperate with each other and, when appropriate, willingly moderate their sovereignties
for the beneﬁt of world order.
If we want a peaceful and prosperous twenty-ﬁrst century, China should work with
Trump’s America to develop that new future. Although competition between the two
powers will be unavoidable, their now-shared outlooks on the world and common
interests far outweigh their diﬀerences. Indeed, China’s leaders would be well advised
to hear what Trump had to say in a major foreign policy speech last April: “We desire
to live peacefully and in friendship with Russia and China. We have serious diﬀerences
with these two nations, and must regard them with open eyes, but we are not bound to
be adversaries. We should seek common ground based on shared interests.”
With so much doomsday thinking—so many dire predictions about what’s going to
happen to America and the world—a dose of optimism is needed. China harbors no
designs to somehow replace the United States as the dominant world power. It
naturally seeks to reclaim a leadership position in its neighborhood. And America needs
to focus on rebuilding itself. If the two nations have the wisdom and pragmatism to
work together on those goals, to live and let live, they can perhaps formulate a new
consensus on global governance that will lead to a more stable world.
Globalism has committed suicide. A new world order has been born. Let’s engage it
now.
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