There is no need to fret about deglobalisationChina, the slowing down of the world economy and the rise of political populism dominated the headlines during last month’s G20 summit in Hangzhou, along with calls for “inclusive growth” and “civilising capitalism”. Amid indications that the pace of globalisation has stalled, there were concerns that we may be entering an era of deglobalisation. Yet the leaders present did not seem to have many new ideas.
The past 70 years were a special period for the world economy that is unlikely to be repeated — at least not until serious adjustments are put in place. The factors that enabled a mutually reinforcing pattern of economic growth and expanding globalisation have been greatly weakened.
The social bargain in the advanced democracies that sustained a generous welfare state alongside economic openness has come undone. Trust in governments has declined, along with their ability to manage their economies. The possibilities of easy industrialisation that fuelled Asia’s economic miracles — most notably China’s — have dried up. Immigration, trade and the free flow of capital have become hot-button issues.
Yet we should not fret too much about a reversal in globalisation. We should instead take it as an opportunity to redress the imbalance between global markets and national responsibilities.