The post-Cold War system of globalization that helped drive the
spectacular growth of East Asia has steadily eroded in recent years. Trade
wars, securitization of supply chains, ethno-nationalism and pandemic have all
taken a toll.
Will Russia’s brutal invasion of Ukraine be the last straw
that signals globalization’s end? That is a rapidly forming view in Europe. Not
only has the war led to Russia’s isolation by the developed world, but it has
cut off crucial Belt and Road Initiative routes and has the secondary
effect of deepening Western distrust and fear of China.
A newly solidified European consensus fears global interdependence
with economies that do not share its liberal values. Without trusted
connectivity with the wealthy US and European markets, it will be much
harder for China to lead the next phase of globalization.
A few years ago, developed economies from Germany to Australia
were enthusiastically integrated with Chinese supply chains, seemingly proving
that economic interdependence could overcome differences in political
systems. While there remain powerful economic and other arguments for such
countries to keep investing in rules-based economic cooperation, security
concerns may well trump economics.
The United States initially abandoned engagement with China
in favour of economic warfare, but it soon morphed into security competition
framed – as often in the US – as a battle of values. At first,
Europe considered itself aloof from ideological narratives emanating from the US
about its contest with China. That aloofness is no more.
In response to Russia’s recent actions, Germany is investing Euro
100 billion in rearmament that is unprecedented in modern times. Across Europe,
a new unity is evident and even earnest talk of building a European
defence force. Amongst the opinion leaders of Europe, Russia and China are
commonly grouped together, and distrust of China is deepening as a
result.
All major economies are looking to reduce strategic
vulnerabilities and strengthen self-reliance, which could yet see
further fracturing of supply chains to reduce exposure to apparent risks.
China, as the biggest beneficiary from globalization, may be the biggest loser
from globalization’s demise as a new, more divided world order takes shape.
To be sure, the conflict in Ukraine is not the only war
that has undermined the international order. The 2003 US invasion of Iraq was
an equivalent snub to the United Nations Charter, dismaying many Europeans.
Nevertheless, the Russian invasion of Ukraine has shaken Europe in a way
that only war in Europe can, and has united the West overnight.
Further, the conflict has come at such a time, after a series of
crises, to confirm the worst fears of the West, that authoritarian powers are
not to be trusted. If we were already plummeting into geopolitical
confrontation between the US and China, the European response to the Ukraine
war ensures the broader “West” will now cleave even closer to the US.
These views were expressed in a variety of research interviews conducted
for this article across central Europe in recent weeks. In Poland, once
anticipated to become a key hub for Belt and Road railways linking China to
Europe, the trains are now standing still.
The war in Ukraine, the internal instability in Belarus and
now sanctioned Russia have strangled the chances for the Belt and Road to reach
Europe in the foreseeable future. Polish attitudes to China, once divided
between those with geopolitical concerns and those seeking an economic boost,
now commonly conflate China with Russia, as twin powers to be feared in
any new world order.
It does not require too much knowledge of European history to
remember it was the Polish people whose Solidarity movement helped to topple
the Soviet occupation of Eastern Europe in the 1980s.
Today, most Poles are counting their luck to have joined the
European Union (EU) and the North Atlantic Treaty Organisation (NATO). Indeed,
with long experience of Russian expansionism, countries throughout central
Europe are likely to look West, not East, to reduce risks (and trade
deficits) in future.
China, which once looked distant enough to be an alluring economic
partner, now looms as a perceived threat because of its “no limits” partnership
with Russia, sealed on the eve of Russia’s invasion of Ukraine.
A critical factor supporting this narrative is that central
European countries perceive China has benefited more than they have from
economic interdependence. This is despite the EU itself representing the
world’s biggest regional experiment in economic interdependence,
successfully reducing rivalry between countries that used to see each other as
mortal enemies.
By the time of US President Joe Biden’s visit to Warsaw at the end
of March, his remarks on the “battle between democracy and autocracy”
were no longer heard as rhetorical hyperbole, but now appeared self-evident to
everyone interviewed for this article. To many ears, Biden’s words sounded as
if they were aimed as much at China as Russia. Security appears to have indeed
trumped economics.
For Europeans today, everything appears to have changed.
Globalization as we know it may be ending. Nevertheless, what appears certain
today may not be an accurate prediction of the future.
Indeed,
after the collapse of the Soviet bloc three decades ago, Francis
Fukuyama’s suggestion that history had ended turned out to be rather premature.
It remains possible that globalization can be re-constituted despite its recent
battering, and that key actors can protect against their feared vulnerabilities.
Yet it is also possible that the twenty first century conflict in
Europe will snuff out recent optimism about international interdependence for a
long time to come. In that case, the outlook for China and its deeply global
value chains is problematical indeed. How China chooses to respond to
this change may either deepen Western fears or begin the long process of
nurturing a new form of sustainable international cooperation.
Published in the South China
Morning Post, April 12, 2022
David Morris
The “The EU and the EEU: Between Conflict and
Competition, Convergence and Cooperation” (EUCON) project is a Jean Monnet
Network project co-funded by the Erasmus+ programme.