The Novel Coronavirus pandemic has become a turning point for the international community. The reconstruction of the global industrial chains is inevitable. During the pandemic, if the supply of components from a country or company cannot be ensured, the whole industrial chain, including many participants and links, will be affected. Therefore, to avoid such risks in the future, it is likely there will be a narrowing of the scope of allocation.
Some enterprises with a global layout will be encouraged to reshore. Today, medical products such as face masks and ventilators are essential to protect people’s safety.
But the scarcity of such personal protective equipment in many countries at the start of the pandemic has exposed the weakness of their manufacturing systems because they were incapable of producing those supplies relying on domestic manufacturing resources after their companies had moved their factories overseas to countries with cheaper labour.
In response, countries have highlighted the revitalisation of medical care and other low-end and low-profit enterprises related to people’s wellbeing, which can help them regain so-called economic sovereignty and manufacturing independence.
The governments of the United States and Japan have earmarked funds to subsidise domestic enterprises abroad to return or relocate. The European Union has called for reducing the bloc’s dependence on imports through purchasing from more EU manufacturers.
Under the principle of maintaining hegemony, the United States will intensify the implementation of the decoupling policies for less economic and financial reliance on its major strategic competitors.
Emerging economies, including China, on the other hand, will strive to promote a new round of globalisation. It is thought by some that a two-pronged form of globalisation will emerge, centred on China and the US.
In this case, countries will increasingly emphasise regional cooperation, avoiding excessive expansion of the industrial chain, which can bring risks to production if there is a crisis.
That means they will pay more attention to the balance between society and the market. Correspondingly, countries will be able to adjust their participation in globalisation to prioritise fair competition and develop a better understanding of the world economy where state-owned enterprises and private enterprises co-exist.
Globalisation has led to a social and growing wealth division in some countries, causing resentment among those who feel it has not benefited them.
So the balanced progress of society, as well as the mutual benefits of most countries, should be taken into account, instead of focusing on market competition and profits.
It is also necessary to create a fairer playing field with more inclusiveness, which is not dominated by a single country. Some developed countries that advocate free trade are not willing to yield benefits to developing countries.
So they question the status of some developing countries to refuse to provide equal treatment, which is a new kind of enforced inequality. Rewriting the international rules requires consensus among all countries and regions and more give than take from the developed countries. Realising fair competition needs long-term efforts, also negotiations and understanding of participants.
Although China is putting efforts into supporting the growth of private companies, the country cannot reduce the importance of its state-owned enterprises. It is the same in the West.
Some Western State-owned enterprises in industries of electricity, postal services, insurance and oil are also on the list. In the context of the pandemic, multilateralism has not disappeared but accelerated in some areas. As a result, no power is likely to dominate globalisation again. A pluralistic world is bound to bring various views, demands and policies designed by countries according to their interests. China has grown to be the world’s largest consumer market, driven by its vast population, which is the key to reviving global growth and globalisation. The globalisation of the future will no longer be a simple expansion of scale, but a balanced, fairer and inclusive development for mutual benefits. That calls for enhancing the global governance system.
The author is the vice-president of the China Institutes of Contemporary International Relations. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.