Slowbalization
Two years ago
Last year
America turn into protectionist was thought as dark warnings
Now
Misplaced ominous predictions
Global growth was decent; unemployment fell and profits rose
China is slowing ; Western firms exposed to China have been clobbered
Stagnating economy - slowbalization
Complacent
Globalization (1990-2010)
Trade war is designed to squeeze concessions from China, not blow up the commerce
commerce soared, firms set up around the world, investors roamed and consumers shopped with enough choices
costs of shipping fell, phone calls cheaper, tariffs cut and finance liberalized
Less glaring than but as pernicious as rise in costs of imports, rules of commerce are being rewritten
WHY
multinational firms burns money in global sprawl while local rivals eat them alive
Services are hard to sell across borders
Costs of shipping stop falling
Chinese manufacturing has become more self-reliant - less import
Regimes for vetting foreign firms (America, EU and China)
America weaponized power gained from dollar-payment system to punish foreighers
Grip on tech industries
Rules on privacy, data, espionage are splintering
Tech systems bent to patriotic ends - repatriate capitals to silicon valley
Cross-border investment fell / value of cross-border firms fell
Impact
Not a disaster for living standards, continental-sized markets are large enough to prosper
Deeper links within regional blocs / a fluid patchwork of regional deals
Evaluation - meaner and less stable, only feed the discontent
Disadvantages
Create new difficulties
Not a real fix for problems created by globalization
More countries struggle to trade their way to riches
Interest rates still influenced by the Fed, leading to financial turbulence, but Fed is less likely to rescue foreigners
Slowbalization will not moderate or contain China, but help it win regional hegemony faster
Climate change, migration and tax-dodging harder to solve without global co-operation
Automation means fewer blue-collar jobs
Slowbalization
Background
Slowbalization
Globalization benefits
Commerce soar, firms set up around the world, investors roamed and consumers shopped with abundant choices
This is caused by reduction in shipping costs and phone call price, tariff cut, finance liberalized
costs stop falling, global sprawl burns money, competitive local rivals, services hard to sell across border, more self-reliant manufacturing in China
Sluggish economy - Slowbalization
protectionist turn in America since 2 years ago
Provoked misplaced ominous predictions 2 years ago
Now, seems to work-China is slowing / global growth was decent, unemployment fell and profits rose
America sign a deal pact with Canada
Trade war
Tax rise on imports - cost passed to consumers
Complacency - Treat trade war as to squeeze concessions from China not blow up commerce
Imply rules of commerce is changed
Impact
WHAT - stagnating economy, shrinking cross-border investment leading to fragmented rules, regional protectionist
WHY - Neglected problems from globalization now accumulate to a point to which they cannot be ignored
Neutral
Disadvantages - rule of commerce is being rewritten
Not a disaster for living standards - continental markets prosper
New difficulties
Not a real fix
Countries influenced by interest rate planned by the Fed are more vulnerable to financial turbulence without rescue from the Fed
More countries will struggle to ratchet up riches
Helps China win regional hegemony faster
Climate change, migration, tax-dodge harder to solve without global cooperation
Fewer blue-collar jobs because of automation
Deeper links within regional blocs
Slowbalization
Globalization
WHAT - Commerce soar, firms set up around the world, investors roamed and consumers shopped with abundant choices
WHY - This is caused by reduction in shipping costs and phone call price, tariff cut, finance liberalized
Stagnating economy
Protectionist turn / Trade War
Rule of commerce is being rewritten
Impact
Neutral
Disadvantages - rule of commerce is being rewritten
New difficulties
Countries influenced by interest rate planned by the Fed are more vulnerable to financial turbulence without rescue from the Fed
More countries will struggle to ratchet up riches
Not a real fix
Helps China win regional hegemony faster
Climate change, migration, tax-dodge harder to solve without global cooperation
Fewer blue-collar jobs because of automation
WHY - costs stop falling, global sprawl burns money, competitive local rivals, services hard to sell across border, more self-reliant manufacturing in China
Deeper links within regional blocs
Not a disaster for living standards - continental markets prosper
Evidence
Fragmenting areas - Grip on tech, vet foreign countries, etc
Slower global investment