Globalisation is alive and well, especially in Asia

Morris Chang, founder of Taiwan Semiconductor Manufacturing Co and a man known as the “father” of the microchip industry, had some weighty words when he spoke at the opening of his company’s new plant in Phoenix, Arizona, last week. “Globalisation is almost dead and free trade is almost dead,” he said at the event attended by a host of tech chief executives and US President Joe Biden. “A lot of people still wish they would come back, but I don’t think they will.” Strong stuff. But the first thing these statements reminded me of was a lecture I went to in the mid-1990s at which the author and academic Malcolm Bradbury was due to address “the death of the novel”. Mr Bradbury listed the many occasions in the previous two decades when the art form’s imminent expiration had been predicted. And yet, here we all were, with new novels by fresh new voices appearing every month. Similarly, the end of globalisation has been announced by numerous commentators and think tanks, particularly over the past year or so. It has become so commonplace that many just nod their heads sagely when they hear it repeated, particularly because “globalisation” has become synonymous in some quarters with an exploitative capitalist model that has led to worse inequalities, increased global warming, and the rise of populist nationalists who tap into the backlash the phenomenon has caused. Now, in the case of chips, Mr Chang is certainly on to something. The US has been leading an effort to restrict Chinese access to this crucial technology – which some consider to be akin to an act of war – and is ramping up production stateside. We can be certain that for the foreseeable future, European markets will be far less reliant on Russian gas imports. The Covid-19 pandemic is one of several factors why a wide range of countries are beginning to build their own domestic supply chains so they are less at risk to disruptions to just-in-time inventory delivery from abroad. So, yes, some things have changed. Improving national resilience is a sensible course of action in an uncertain world, and if consumers can source foodstuffs, for instance, from their own region rather than from thousands of kilometres away, that can only be helpful to the effort to save the planet from environmental degradation. But in many ways, the integration of the world’s economies is increasing, not decreasing. This is the year in which the biggest free trade pact in history, the Regional Comprehensive Economic Partnership, came into effect. Led by the 10-member Association of South-East Asian Nations (Asean), it includes China, Japan, South Korea, Australia and New Zealand, and covers about 30 per cent of global population and gross domestic product. Another trade pact, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, whose 11 signatories represent 13 per cent of global GDP, is proving sufficiently attractive that six applicants, including the UK and China, have submitted requests to join. At a much more micro level, although very important for the country, Timor-Leste has finally been given the green light to join Asean. Further to the West, Chinese President Xi Jinping’s visit to Saudi Arabia last week led to $50 billion of investment agreements being signed – and that was just with the kingdom. As my colleague Raghida Dergham wrote , two other summits that Mr Xi attended with Gulf and regional leaders “fired the starting gun” for a future of increased partnership and joint development. China’s ambitious Belt and Road Initiative continues to expand; earlier this year, Mr Biden launched the 15-member Indo-Pacific Economic Framework for Prosperity; and a new scramble for influence and trade in Africa has seen countries from around the world seeking opportunities in a continent that is expected to make up one quarter of the global population by 2050. What do the above have in common? They are all examples of enhanced co-operation, freer trade, and connectivity in the Asia Pacific and the Global South. They rebut the words of Mr Chang and other harbingers about globalisation’s demise. It might be that the model that suited America so well for so long is faltering, but in the rest of the world it is clearly thriving. This is quite apart from the argument put forward by the Welsh historian Hywel Williams that globalisation is such an “ancient” phenomenon that he gave as an example simultaneous developments in scientific thinking in Greece, China and India in the sixth century BC. “It is not at all implausible that these similar trains of thought were being followed in different continents and countries because of the land routes and sea lanes that linked East and West,” he wrote. “Those channels of communication were developed for trading purposes, and ideas often travel by the same routes as goods and cargoes.” All of which makes, with no disrespect to Mr Chang, talk of the death of globalisation as facile as the idea that “history” had ended with the collapse of communism. Some countries may pursue the paths of protectionism, on shoring and decoupling, but as a World Trade Organisation report put it: “Globalisation is not slowing or stalling. Rather, it is evolving, driven by trade in human skills, knowledge and ingenuity.” The multiplicity of recent trade pacts and initiatives in the Asia Pacific and Global South alone are all that is needed as proof.