By He Yafei Source: China-US Focus Published: 2021-2-26
Having passed through the turbulent torrents and navigated the dangerous shoals of 2020, the great river of history keeps roaring ahead in 2021, with tempestuous waves. Changes are accelerating as a host of global conundrums pile up, presenting harsh, unprecedented challenges for humanity.
The new characteristics of centennial changes lie in three profound changes:
One is deep changes in global power equilibrium, reflected mainly in the steady increase in the strength of such developing countries as China, as well as worsening domestic contradictions and a relative decrease in the strength of such Western countries as the United States.
The U.S. is largely responsible for an increase in geopolitical conflict and estrangement between civilizations.
Another relates to traditional security threats in such forms as military conflict, war and use of force. These are interwoven with such non-traditional security threats as climate change, cross-border virus spread and energy and grain crises. These are unprecedented global challenges.
A third is the scientific and technological revolution, which is entering a new period of leapfrog development. The shocks to the world’s politics, economy and culture have never been seen before. Technology is radically changing the way humans live and produce. A brand new world is on our horizon.
1. The global geopolitical environment will continue to change profoundly. It will become more complicated and sensitive. The global balance of power and world order will continue to tilt in favor of China, and China’s development will become unstoppable.
The U.S., meanwhile — plagued by such long-standing domestic problems as a widening wealth gap, inequality, contradictions between capital and labor and identity politics hijacking its political discourse — will find that its strength increasingly falls short of its ambitions, both domestically and internationally. The same goes for other major Western countries. This is the grand trend of history, which will last for some time and deeply affects the direction of historical development.
The size of the Chinese economy surpassed 100 trillion yuan in 2020, per capita GDP exceeded $10,000, thus the country very likely will stride over the middle-income trap. The world economy as a whole sank into recession last year, with China the only major economy that saw positive growth. Its foreign trade also grew against the overall downward trend.
Both in containing the pandemic and resuming work and production, China performed exceedingly well in 2020, demonstrating the capacity of the Communist Party of China and the political system for nationwide mobilization and policy implementation, and highlighting the cohesive power of the Chinese people and the Chinese culture’s core values of putting the state and collective first. These differ completely from the United States and the West, both institutionally and philosophically; and they have different outcomes, which naturally stirs up profound retrospection in other countries.
The series of commitments and measures China has made and taken over the years in such areas as climate change, poverty alleviation, new energy promotion, reform of the economic development mode and global free trade have contributed both conceptually and pragmatically to humanity’s responses to global challenges.
China’s in-depth participation in international affairs and efforts to cope with global challenges, as well as the continuous increase in its say and influence in international affairs, will not be swayed according to the wishes of the U.S. and the West. Owing to growing pressure and strategic anxiety, however, the U.S. and West tend to read China’s growing strength from a negative angle, worrying that China’s development will upset their dominance of world affairs. Though there is no lack of positive comment in the West about the impact China’s progress has had on the world economy and global peace, generally speaking, when it comes to China, excessive anxiety and strategic suppression remain mainstream in the West. The forms and rhythms of suppression may vary, but the overall orientation will prove hard to reverse.
Meanwhile, many small and medium-sized countries, including some Western ones, have clearly stated they are unwilling to take sides in a China-U.S. conflict or confrontation. This indicates that, driven by globalization, the present world is no longer dominated by the U.S. but is a world of all countries. There won’t be a fundamental reversal of the trends of a multi-polarizing world and economic globalization — which is a check on the U.S. and West’s containment and suppression of China.
The biggest variable affecting the global political and economic orientation is the U.S. American scholar Francis Fukuyama wrote in a recent article, saying that the “U.S. political decay” he described in 2014 turned increasingly serious over the past few years, and the U.S. government is still controlled by a powerful elite group. Previous policy divergences between the Democratic and Republican parties have become exercises in cultural identification that are irreconcilable.
Washington D.C. was turned into a military fortress around the inauguration of President Joe Biden. In the absence of any external threat, more than 20,000 soldiers were deployed there. What does that say?
From one aspect, it reflects American society’s present state of severe division, with the chasm extending along the lines of the political characteristics of the cultural identities of races, sections and groups. The 73 million people who voted for Donald Trump and the social forces they represent won’t recede from the political stage. Trump is said to be setting up a “patriot party” independent of Democrats and Republicans, and U.S. politics has become even more complicated. Don’t simply conclude the Trump phenomenon or era is a thing of the past. America’s political mess didn’t start with Trump, nor will it stop at Trump. What we see now is just the beginning of chaos, which shows that thee social contradictions in the U.S. have become very sharp and cannot be reconciled.
Political chaos and disorder in the U.S. are rooted in the inequality resulting from a widening wealth gap, which has to do with globalization but is more closely related to U.S. political and economic institutions, especially its interest-distribution regime. The elite groups’ political, economic and social policies over the past few decades are also responsible. As for the standoff between capital and labor, income gaps are steadily on the rise. Since the 1980s, the proportion of workers’ incomes and welfare in terms of GDP has been dropping one year after another — especially worsening since 2000.
The Biden administration wants to raise the minimum wage nationally and increase corporate taxes. Its policies may tilt toward the latter between capital and labor. It is still too early to tell whether such policies can change the fundamental defects in U.S. political institutions, or whether they can be implemented at all. Internally, social unfairness has brought a standoff between the general public and the elite and government. Externally, it has brought scapegoating and shifting blame onto countries like China, which have benefited from globalization.
2. Non-traditional security threats are emerging simultaneously in great numbers. Of these, the most prominent are the coronavirus pandemic and climate change. Such threats, along with the aforementioned traditional geopolitical threats, brought humanity unprecedented challenges that constitute an existential crises.
The pandemic, which dealt unprecedented blows to economies around the globe in 2020, will no doubt continue to pester countries this year and won’t disappear thereafter. Severely hit global politics, economies and people’s livelihoods won’t regain normalcy in a short time. This year will be one in which the virus races against vaccines.
The coronavirus has profoundly changed people’s ways of thinking and lifestyles, broken supply chains and obstructed international and people-to-people exchanges. These are historical changes that will affect one or more generations. Likewise, climate change will change people’s ideas about their living environment and methods of production. A green economy and green development have become the main themes guiding countries’ economic decisions.
In addition to the economic and digital gaps between rich and poor countries, there have been vaccine gaps and climate gaps, which will ultimately boil down to the wealth gap — the biggest global challenge. Without concerted efforts by the international community as a whole, humanity is destined to suffer increasingly severe blows.
Against the backdrop of globalization, countries’ economies are interconnected and depend on each other to a great extent. Production needs capital, resources and markets. Primary products need export markets. Both need strong logistics and are indispensable to each other, because the world has already been interwoven tightly.
The pandemic’s impact on the world economy is beyond imagination. Worldwide, the number of poor people doubled last year and will continue to grow in 2021. The pandemic has sunk many parts of the service sector into stagnation, and many industries have simply been destroyed. Labor-intensive industries have rapidly shrunk, both because of the pandemic and the technological revolution; and supply chains constantly move and relocate. Prospects for the world economy look gloomy as it suffers four primary shocks: economic cycle, pandemic, technological revolution and geopolitics.
The pandemic and climate change have taught people a single lesson: Non-traditional security threats, such as the coronavirus, climate change, energy and grain crises, are serious challenges rising directly in humanity’s face. Together with such traditional security threats as deteriorating geopolitics, military conflicts and war, they constitute an existential threat. Past crises all occurred in a relatively narrow area, but nowadays when they happen — thanks to global interconnectivity — cross-region, cross-border, comprehensive crises may rapidly reach all corners of the globe, endangering humanity as a whole.
A global governance regime for handling worldwide challenges entails close cooperation between all countries, especially big countries, which is partly why the China-U.S. relationship is so important. Unfortunately, the spirit of solidarity and mutual assistance is gone, and it will take time and great effort to rebuild it.
Facing economic recession and the pandemic, major countries have exhausted their monetary and financial tools. Limitless currency easing, negative interest rates, and large-scale financial stimulus are no free lunch. A price will have to be paid. Large-scale entry and exit of international capital and dramatic ups and downs in U.S. dollar indices deal the heaviest blows to small and medium-sized nations and countries exporting intermediate products. Now, countries like Brazil are in danger of bankruptcy, and the financial risks are imaginable. It is only a matter of time before a new financial crisis strikes.
3. Profound changes brought by the technological revolution. These are another prominent feature of a historical turning point, and a tremendous dynamic pushing the world economy to a new stage. Technological revolutions are often accompanied by fundamental changes in methods of production. The shocks to the world’s politics and economy are unprecedented, having changed the look of the world. This will continue.
Artificial intelligence, the internet of things, big data, automation, life sciences, space and deep-sea exploration and new energy sources will fundamentally change the way the world looks, as well as people’s ways of life and mode of production.
While bringing the world tremendous wealth and new opportunities, technological revolution, like other revolutions, will also profoundly change society and its structure. According to estimates by international organizations, 50 percent of current jobs will be taken over by automation and robots with artificial intelligence by 2030, and global supply chains will undergo adjustments and reorganization. This process will inevitably lead to turbulence in society.
Countries will also face serious monopolies originating from the combination of new technologies and capital, as well as the challenges they pose for frameworks of national and social governance. Are countries ready?
The period of transition amid centennial changes is full of risks and crises. Great changes call for great wisdom and great development. The world needs to be reevaluated, the path forward needs to be reconsidered. The ultimate truth is the simplest.
There are several points for deliberation:
First is to be vigilant against the pitfalls of the zero-sum geopolitical game, and to avoid any form of cold or hot war. Major country competition is normal, but there must be order, bottom lines and rules. And competition must be caged in the search for peaceful coexistence.
Second is to adhere to economic globalization and free trade, and oppose protectionism on the basis of WTO reforms. As the world enters a stage of knowledge and a digital economy, new rules have to be made to adapt to the technological revolution and changes in global supply chains. Green, sustainable development must be promoted.
Third is to take global poverty alleviation and poverty relief seriously, making concerted efforts to bridge North-South gaps. Advanced countries should assume their due responsibilities, take world development as a whole instead of the interests of only a small number of countries. The UN 2030 Agenda for Sustainable Development is a fine platform. China’s achievements in poverty alleviation and its Belt and Road Initiative have similar goals.
Fourth is to rebuild the spirit of mutual assistance in the face of common threats and a sense of community with a shared future for humanity facing common existential crises. Under the threat of a spreading pandemic, climate change, cybersecurity risks, collapse of the nuclear non-proliferation regime and the grain crisis, there is no more important, pressing challenge than preserving the environment for human existence. Fragmentation of the global governance regime and a state of anarchy are unsustainable. Humanity won’t be able to overcome the extreme difficulties posed by the confluence and simultaneous outbreak of traditional and non-traditional security threats, which opens up new prospects.
Centennial changes are brimming with challenges and opportunities. Countries should have sufficient wisdom and willingness to overcome difficulties, engage in active dialogue and cooperation and contribute to the creation of a new future for all.
He Yafei is Former Vice Minister of Foreign Affairs, senior fellow of Chongyang Institute for Financial Studies at Renmin University of China.
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This is part 3 of The Pacific Dialogue, between veteran Chinese diplomat Ambassador He Yafei and long-time American scholar on China Professor David Lampton. The dialogue took place on June 25, 2020, and was moderated by China-US Focus Editor-at-Large James Chau. The conversation focuses on the June 17 talks in Honolulu, Hawaii, between U.S. Secretary of State Mike Pompeo and China’s top diplomat, Yang Jiechi, the first high-ranking meeting between the two powers in months. He Yafei sees the talks as the beginning of renewed positive momentum, while Professor David Lampton calls for more dialogue across the board between government agencies, businesses and ordinary people.