World Economy
New Issues in Political Economy

In recent years, the United States has used high-tech, dollars, and trade as weapons to block and sanction emerging countries such as Russia and China, forcing more and more developing countries to consider the issue of “self-sufficiency”. From this perspective, the United States is the biggest troublemaker of globalization, writes Valdai Club expert Wang Wen.

We did not expect that 40 years after the concept of “globalisation” was proposed, the issue of “self-sufficiency” would still be discussed. This is truly a tragedy of world development and an ideological predicament of political economics.

Under the theoretical logic of political economics, through the social division of labour and cooperation, the continuous growth of socialised production will inevitably break through the boundaries of a country and form a large global market. It is a pity that there are now signs of cracks and decoupling in the international markets for high-tech and energy commodities, leading to more and more people worrying about whether globalisation will go backwards.

The risk of the possibility of retrogression in globalisation is mainly due to the coercion of the United States. In recent years, the United States has used high-tech, dollars, and trade as weapons to block and sanction emerging countries such as Russia and China, forcing more and more developing countries to consider the issue of “self-sufficiency”. From this perspective, the United States is the biggest troublemaker for globalisation.

China is overtaking the US as the world’s largest consumer market. Two years ago, China proposed the strategy of “building a new development pattern with the domestic cycle as the main body, the domestic & international dual cycles promoting each other”, which it referred to as the “dual cycle strategy”. China hopes to take advantage of its large domestic market to enable it to achieve independent innovation in key technological fields, such as large aircraft manufacturing, microchips, car engines, etc., to reduce its dependence on the West, to prevent the constant threats from the United States, and to promote more equal cooperation.

However, China’s “dual circulation” strategy is not to return to a natural economy, nor a self-sufficient economy, nor to decouple from the West, but to better promote high-level openness and enhance economic autonomy through the advantages of a large domestic market; for example, by expanding imports and rebalancing the relationship between trade and the economy.

In the theoretical framework of political economy with Chinese characteristics, globalisation is an inevitable trend, especially in the era of the digital economy; no one can stop economic globalisation. Judging from the data on international trade, investment, the flow of people and information, it is still showing a growth rate every year. China is a beneficiary of globalisation, as well as a defender, builder and contributor.

At present, the changing trend of globalisation that we need to think about is the speed of globalisation and who will lead it. In this regard, I would like to share four points of view about new Issues in Political Economy:

First, changes in the dynamics of globalisation. In the past, the driving force of globalisation originated from the West; now, it has shifted to developing countries, especially the BRICS countries. In 2021, the BRICS countries will grow by 7.6% year-on-year, which is higher than the global average growth rate of 5.5%. The contribution of BRICS growth to the world has exceeded 50% for 10 consecutive years. The growth rate of R&D investment, service trade, and infrastructure investment in emerging countries is higher than that of Western countries. Various data show that the BRICS countries are becoming a new locomotive of globalisation.

Second, no country has the ability to completely block other countries. At present, the Western strategy of sanctioning Russia has failed. Over the past 40 years, sanctions have not crushed Iran or North Korea, nor can they contain the development of China and Russia. Sanctions will only expose the selfishness of the West, and force emerging economies to pay more attention to self-sufficiency in technology and finance. From this perspective, “Western-centrism” will come to an end. In the future, globalisation will be more balanced, more equal and more inclusive.

Third, prepare for the worst and think bottom-line, but try to keep the world from returning to a self-sustaining economy. In recent years, closed, confrontational and powerful political forces have emerged in the international order. The US Indo-Pacific strategy further exacerbates the trend. At present, we need to work hard to prevent a “complete decoupling”, to prevent a new world war, and to resist the repressive force of US hegemony. In this regard, emerging economies must promote localised substitution in key technologies and achieve necessary food and energy reserves. They must have independence, while at the same time, it is necessary to maintain a moderate growth rate in terms of population, investment, and international cooperation in trade.

Fourth, it is necessary to have a broader vision, prevent future disasters on Earth, and explore a wider universe. One of the neglected reasons for the current tension between major powers is limited global resources. The Earth’s resources are not enough to support 8 billion people leading modern lives. In order to prevent the outbreak of a new world war, the country’s goal of competing for resources should turn to a wider universe and higher technological fields. Human beings should unite to explore space, explore new nuclear energy technologies, innovate with low-carbon emission reduction technologies, and standardize AI technologies. This can not only prevent future climate crises, virus crises and food crises, but also safeguard the future destiny of mankind.

Globalisation Is Set to Continue, but According to New Rules
On Thursday, June 16, a Valdai Club session, titled “Self-sufficiency and Cooperation: Features of Modern Political Economy”, was held as part of the business programme of the St. Petersburg International Economic Forum 2022.
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Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.