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Op-ed: Anti-globalization goes against the trend of time

(People's Daily)    14:09, October 19, 2018

New characteristics of unilateralism, trade protectionism and anti-globalization have emerged since the 2008 international financial crisis, posing severe challenges to the process of economic globalization.

Especially since last year, the US with its frequent trade protectionist moves, has been doing nothing but reversing the trend of globalization.

The development of world economy since the 18th century proves that the in-depth promotion of economic globalization leads to prosperity of global economy, while anti-globalization would only lead to stagnation.

As a major form of anti-globalization, a country adopting trade protectionism only hurts others without benefiting itself, and there will be no winner in such a situation.

The Hoover administration of the US issued the Smoot-Hawley Tariff Act in 1930, raising tariffs on over 20,000 imported goods with the aim of reducing imports and getting rid of the overstocked US commodities.

However, the results were opposite to the country’s wish. Trade partners of the US took counteractions one after another, which led to a drastic drop of the US exports. This protectionist policy was considered by historians as one of the reasons of the Great Depression that later resulted in a worldwide economic downturn.

At present, the US is declaring a massive trade war despite the opposition of the world, becoming the biggest uncertainty for the global economic recovery.

The International Monetary Fund (IMF) estimated that the losses caused by the trade war between the US and other countries might lower global growth by 0.5 percent for 3 consecutive years, or about $430 billion in lost GDP worldwide.

The US used to be a leader and the largest beneficiary of economic globalization, but now it has turned into a destroyer of international trade rules and economic globalization as it hopes to transfer domestic contradictions, exploit maximum benefits and constrain the development of other countries on strategic level.

The US is the last country in the western world to establish social security system. Valuing capital and making light of labors, the US suffers acute social diseases such as unfair distribution of income and severe social inequality.

During the past decades, especially since the 21st century, the US has seen increasingly worsened social inequality. In recent years, the wealthiest one percent families in the country earned 20 percent of the total national income, up from 9 percent in 1978.

In addition, the richest 10 percent US households occupy over three quarters of the country’s total family fortunes, while the poorest half households only have one percent of the total fortunes.

In 2017, the median net assets of African Americans and Latino Americans were only 10.29 and 12.11 percent of that of the white Americans.

The gap of wealth and social inequality are always hidden behind economic prosperity, but they will be gradually exposed when recession comes. For instance, after the 2008 international financial crisis, the Occupy Wall Street campaign to protest against economic inequality broke out.

However, the income gap in the US still got wider, and the social polarization was also worsening, which triggered strong dissatisfaction among the medium- and low-income earners.

Faced with intractable domestic contradictions, the US has resorted to populism and bullying practices, passing the buck to other countries and provoking trade disputes. By doing so, the US wishes to protect the interests of its monopolistic capital and divert attention of its people.

As the emerging markets and developing countries enjoy rapid progress in recent years, the US has seen a decline of its status in global economy. In 1960, the US economy accounted for nearly 40 percent of the world’s total. However, the figure slid to 24 percent in 2016. In the meantime, the share of global GDP from emerging markets hit 38.8 percent in 2016.

The emerging markets and developing countries, conducting manufacturing in the medium and low end of the value chain that only generates a narrow margin, are continuously providing cost-efficient products to the world. They have promoted world economic prosperity and balanced development, improving the general living standard of mankind.

The developed countries, including the US, have benefited much from the global market expansion and the enhanced international division of labor, thanks to their position at the high end of the value chain. These largest beneficiaries of economic globalization are still leading the world in terms of economic development and per capita GDP.

However, some narrow-minded people in the US, affected by the zero-sum mentality, believe that they are actually at a disadvantage if others are developing. From withdrawing from international organizations to imposing additional tariffs, they have a deep conviction that their country can benefit more if they force other countries to make concessions.

In order to protect its supremacy, the US has always been on guard of the countries that could possibly catch up with it. There is a saying that when a country develops an economy as big as 60 percent of that of the US and keeps strong momentum for growth, the US would take it as a rival and try every possible means to constrain the latter’s development. The Soviet Union, Japan, and China have all been the victims.

In order to suppress other countries, the US has trampled on international rules, undermined world economic orders, and built high trade barriers. However, the economic globalization is an irreversible trend, and to deprive a major country of the right to develop also goes against the historical law and international morality.

 With the coming of the 21st century, the US would only harm itself without benefiting the others if it still sticks to the old thinking of the colonial era as well as the Cold War and zero-sum mentalities.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Hongyu, Bianji)

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