Amid the US-Sino rivalry: how high is the risk of a deglobalisation trajectory for China?

The ongoing military conflict between Ukraine and Russia has allegedly changed the course of history and revived the era of ‘Great Power Rivalry’. Under this backdrop of re-energised geopolitical competition, the hostile rhetoric and posture have only further aggravated between the U.S. and China, especially regarding the ‘Taiwan issue’. Re-assertion of the international order dominated by the west, and counteraction of it (led by Russia and China), have led to a more fractured world both politically and economically. In the meantime, as most of the world has stepped out of the horror of Covid-19 pandemic, China’s continuing resolute containment measures and minimum border entry have astonished audiences in the west and beyond. These Covid-related restrictions coupled with China’s position in the rivalry with the U.S., have posed the question of whether China is gradually taking a deglobalisation course? Because China is so deeply ingrained in many aspects of globalization, including the global trade network, the answer to this question will not only have a significant bearing on China’s economic development and state-building, but it will also have significant worldwide implications. In this blog, we endeavor to answer this question by taking stock of modern China’s history of globalisation as well as the discourse around it and taking into account the consequences of the present Ukraine-Russia conflict.

A historical sketch of globalisation in modern China:

Globality has been an essential part of the discourse of modernity in the non-European world, when western history has become world history and those being perceived as oriental or raw have been compelled into this form of world history. The choice of globalisation has never been a given for modern China, and the early encounters with the Europeans has been stamped and memorised as ‘sovereign door being knocked open by the cannons’ and ‘Century of Humiliation’. Since the ‘humiliation’ was primarily caused by techno-scientific backwardness of the old, un-modernised China, the discourse of modernity had mainly been formulated as techno-scientific and economic progress, with even cultural inferiority mostly enunciated as a hindrance to scientific advancement. While globalisation was forced upon China and its past was derogated for absence of any elements of modernity, China paradoxically had been looking outward for its ideal model of modernity and formation of nation-state, especially from nations that bore some similarity with China in the past— ranging from Sun Yat-Sen’s acclaim of Japanese victory in Russo-Japanese war as ‘our own victory’, and communists’ marvel at Soviet Union’s rapid industrialisation during Stalin’s rule, to China’s learning and replication from newly industrialised east Asian countries in post-Mao period. The most notable walking-back of globalisation in modern China was the Soviet-Sino split from 1960 when China severed economic ties and technological exchange with Soviet Union and consequently most of the socialist camp that China once belonged to, with reasons ranging from Soviet Union’s unfulfilled promise of technology transfer to personal enmity between top leaders. Nevertheless, even under the integument of revolutionary discourse of modernity in late Mao-era, huge underlying efforts had been made by the technocrats led by then premier Zhou Enlai to pursue (and had achieved to some extent) techno-scientific progress and capital accumulation in the industrial sector (Yao, 2019). At last, unprecedented economic and technological progress has been most-effectively achieved in modern China since the 1980s, which features deepening globalisation, with China also taking lead on initiatives in issues like global infrastructure development and climate change to gain a bigger footprint in global governance. Nevertheless, recent signs are emerging that the Chinese state is tending to downplay the importance of globalisation to economic achievement (the advocacy of ‘dual circulation’ economic development pattern, in which global economic cycle plays a supplementary role relative to domestic economic cycle) and is willing to compromise the economic benefits of globalisation for political and public-health ends (divergent Covid-19 policy).

China’s choices in the ‘Great Power Rivalry’:

Utilitarians put emphasis on material and economic gains and ignore the role of values in driving human and social behaviors, however, the materialistic and individualistic approach of utilitarianism may fail to explain certain strategic decisions based on calculations beyond economic rationalisation. Recent events have shown that, when factoring non-material values into social behaviours, the underprivileged could take on a trade-off between nationalistic values and economic benefits in severely unequal and polarised society, which has been manifested in the form of populism that climaxed in the trade war that former U.S. President Donald Trump (Murshed, 2020) waged against several countries, and in the form of outright war that Russia wages presently against its western neighbor. The mechanism behind such a non-utilitarian rationalisation is that the feeling of deprivation and grievance arising from unequal distribution of economic output is compensated by the sense of fairness arising from the collective glorification or collective insecurity during conflicts (whether armed or unarmed) fought for nationalist rhetoric. Thus, on one hand, a repetition of Russian experience as deglobalisation by outright military conflict in Taiwan strait could happen in China, as two countries bear similarities in both the dynamics of ‘Great Power Rivalry’ with the U.S. and domestic factors pertaining to authoritarian rule and severe socio-economic inequality. On the other hand, the Russian economy has exhibited a certain level of resilience under western sanctions mainly because of Europe’s energy reliance on it, and this dynamic has shown that economic dependence is an advantage to be leveraged even when globalisation is compromised for other political ends.

In all, China has been going through considerable reconfigurations in a broad range, including assertion in global economic and political sphere, revival of Confucian values, and strengthening of patriarchal authoritarianism within party-state, since mid 2010s, when China’s share in world economic output approximately reached historical level, which was generally above 20% before mid-19th century (Broadberry et al., 2018). Currently, by displaying strategic behaviors across different issue areas, China is seeking space to further gain techno-scientific and economic prowess, while at the same time, preserving the party-state’s political and economic interests at home and abroad. Russia’s war against Ukraine could also prompt a profound re-calibration of China’s globalisation policy as the possibility of a west-east division resembling the cold war era rises. If any lessons can be drawn from the Soviet-Sino split in the Mao-era and the recent deglobalisation courses that populist governments (Brexit, Trump’s tariff war) and authoritarian regime (Russia’s invasion of Ukraine) have taken, we believe that the level of patriarchal authoritarianism within party-state and socio-economic inequality (not always independent of one another) are the two most significant home elements in any potential reversal of globalisation course for China. Inopportunely, the trends for these two domestic factors are on the side of disruption rather than cooperation within the current international order dominated by the west. However, in the manner that the conditions of deglobalisation have been partly brought about by the rise of China’s relative economic and technological strength in the world, globality will persist in any measured deglobalisation, which should be dynamic and imbalanced among multi-fronts if it would occur.

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