Covid-19, Globalization and Evolution of International Order

Zhang Chi Zheng Yongnian

Deputy Professor， School of National Security， National Defense University of PLA

Director， the Advanced Institute of Global and Contemporary China Studies， the Chinese University of Hong Kong， Shenzhen

As a once-in-a-century catastrophe， Covid-19 pandemic has initiated worldwide comprehensive crisis， manifested in economic development， social stability， political governance and international order. The pandemic is accelerating the evolution of international order. The EU and the US have so little attention to spare from their domestic epidemic that can hardly contribute to the global combat against the disease， which has undermined their international leadership. Meanwhile， the West becomes anxious about the rise of Chinas geographic political influence. Influenced by Covid-19， China-US relations are experiencing accelerated deterioration with bigger challenges ahead.

“COMPREHENSIVE CRISIS”

OF THE WORLD

What Covid-19 has introduced is “comprehensive crisis”. Asian financial crisis in 1997 and global financial crisis are respectively local crisis and crisis in the field of finance and economy. The pandemic， however， has introduced all-around crisis， a “symptom” of economic crisis， social crisis， political governance crisis and international crisis， which is especially obvious in the West.

With the spread of Covid-19， no one can tell its total impact to countries' economy. Nevertheless， more and more empirical evidences indicate that Covid-19s impact to world economy largely surpasses that of “the Great Depression” from 1929 to 1933. On one hand， “the Great Depression” mainly impacted western countries， while todays Covid-19 has impacted all major economies in the world. On the other hand， during “the Great Depression”， countries agreed to solve the problem with Keynesianism， while today some countries have started massive quantitative easing policy， merely trying to transfer their own troubles to other countries.

In such a general circumstance of economy， all major western countries see panic grow in their society. In recent years， the scale of middle class have been shrinking and populism and extreme right wing have risen rapidly. Once the pandemic went out of control， political crisis might happen in some countries. Historically， western countries ability to control social panic is relatively weak. Fascism regimes in Italy and Germany received massive domestic support at the very beginning. It was social panic that took Mussolini and Hitler to power， because when panic grows in society， people need a hero to stand out. Thats why the pandemic may cause even worse consequences when populism and right wing has gained power. In other words， if unemployment rate in countries including the US continues to go up， how to contain panic will become a difficult problem for social governance. In fact， social panic caused by the virus is more detrimental than the virus itself.

In practice， to bring the panic in societies caused by Covid-19 under control， many countries in the world have entered emergency status with military used to maintain social order. What worth notice is that in human history， epidemic and war is all-too-often a pair of twins. If the pandemic couldnt be effectively curbed， crises in different countries went worse， severer panic appear in societies， then fascist regime would go next to democratic government， which would increase the risks of conflict and war to a large extent.

OBVIOUS TENDENCY OF

“LIMITED GLOBALIZATION”

The pandemic of Covid-19 has given a heavy blow of the economic globalization process. Global industrial chain and supply chain suffer. Tendency to return to “economic sovereignty” appears in globalization， which may evolve to “limited globalization”.

The wave of globalization since 1980s has unquestionably created unprecedented wealth， but it has also brought about many problems. Wealth is channeled to only some counties and a tiny minority of people， making income gap wider and wider， society more and more divided and scale of middle class smaller and smaller. Meanwhile， many western countries lost some “economic sovereignty” in this wave of globalization. Under the dominance of capital， many of their industries were transferred overseas， together with the elements of “economic sovereignty” such as tax and employment， which has caused lots of domestic conflicts. All of them are key reasons for the growth of populism and protectionism of the West in recent years. Although international division of labor contributes to higher productivity， it causes separation of economy from society of western countries at home. Economy should have been embedded into society， but todays economic activities have become highly internationalized， sovereignty nature absent， and out of control of society. Consequently， economic life and social life are separated， thus leading to serious social problems or even crisis.

This pandemic makes people more skeptical about globalization. Developed economies like the US and Western Europe are equipped with advanced medical and public health systems， but they were caught out and suffered much. One major reason is that those developed countries industries， especially those with low added value， were largely transferred to other countries with the international division of labor during the globalization guided by neo-liberalism since 1980s. As a result， industrial chain of medical supplies including masks， sanitizer and ventilators had been transferred to China and other developing countries， productivity in Europe and the US shrinking by a large scale. Statistic shows that 80% of medical supplies in the US are made by China and 97% of antibiotics rely on Chinas supply. In the face of Covid-19 crisis， every country has to save itself， its materials supplying itself first. Experts are limited or even banned. So， the inefficiency of western countries combating the virus is not only because of their governance systems， but also because they no longer produce unsophisticated medical materials.

After Covid-19 pandemic， European countries and the US will emphasize on their “economic sovereignty”. No matter for what reason， nationals life safety or economic and social security， many countries will try their best to recover “economic sovereignty”. They may adjust their economic structure via “return of industries”; Production capacity relates to national security and peoples life safety will be kept at home， transferred back from overseas or relocated to countries reliable and convenient for logistics and communication. Against this backdrop， globalization will be negatively affected and its concept and direction may turn to “limited globalization”， i.e. all countries try to seize “economic sovereignty” by keeping crucial industries at home so as to hold their own destiny. From this prospective， economic globalization will decline after Covid-19 pandemic and a portion of industrial chains will return to western developed countries. Of course， not all enterprises and capacity are to return to European countries and the US. The industries to return are likely to focus on two fields： first， national security-related enterprises， embodied in the US trade war against China; second， enterprises related to public health and medical materials， just as Trump trying to pull back capacity of medical materials by reactivating Defense Production Act.

China will also be profoundly affected by the alteration of direction of globalizations development and evolution. For a short run， “limited globalization” will forcefully impact Chinas economy. In recent years， trade has been taking over 30% of Chinas GDP， both foreign capital and foreign market enjoying important position in Chinas economy. The negative effects of Covid-19 to China at least go to two aspects. First， many Chinese enterprises quickly recovered to production， only to find the number of order from European countries and the US slumped or even returned to zero， which impeded their return to produce. Second， after Covid-19， some enterprises and capacity of the US， Japan and other countries may leave China， bringing about costs for China to readjust its industries. However， for a long run， China can hopefully benefit from “limited globalization”. On one hand， the West cannot pull back all the capacities in China. Even though the US and Japan intend to let a portion of enterprises return， it will take a long and gradual process. On the other hand， when western enterprises leave， a certain space of market will be emptied for Chinas native enterprises to take over. Now， China is not only the country with the most complete industrial chain， but also enjoys spacious domestic market. For those native enterprises， “limited globalization” can grant more than industrial links and market shares left by foreign companies; they can take the vacancy and do a better job so as to climb toward high added value links of industrial chains and speed up their industrial upgrading.

ACCELERATED EVOLUTION OF

INTERNATIONAL ORDER

The pandemic of Covid-19 is accelerating the change and evolution of international balance of power and major countries relations. When combating coronavirus， each European country basically fights all by itself and the EUs role to organize and assist its member states to collectively confront the epidemic is very limited， which greatly undermines its international leadership. Meanwhile， the US and western countries are highly alert to Chinas assistance to many countries during the global combating Covid-19， worrying about the rise of Chinas geographic influence. However， their obsession with ideology will increase the uncertainty of the development of international landscape， or even accelerate the fall of the West. Covid-19 has added more challenges to existed difficulties of China-US relations， which is declining at a higher speed.

Firstly， EUs member states became “isolated islands” in the combat versus Covid-19， seriously undermining EUs credibility and status. As a political unity by sovereignty countries， EU has achieved glorious progresses through economic， social and political integration historically. It is called “new empire” by some and regarded as the future of Europe as well as a classic example for regional cooperation of humanity. However， the fact that EU is not of sovereignty decides its limited power to coordinate among member states， making it often appear unable to put its will into action. In recent years， EU has been declining faster than expected. For instance， “Brexit” has stirred complaints by many of its member states. This time， Covid-19 again exposed EUs weak point that its member states are willing to share the welfare， but not the suffering.

During the combat against Covid-19， people dont see the existence of the integrated Europe， but a Europe returned to the age of absolute sovereignty with each country betraying extreme selfishness. The spirit of cooperation vanished among member states， while rises of domestic right-wing populism further increased the difficulty to cooperate. Although it is known by all that countries should work in team to cope with the pandemic and EU had underscored the importance of solidarity in the early stage， serious conflicts and disputes abounds among its member states with the spread of Covid-19. Leaders of nations cannot abide by EUs framework in order to meet the demands of people of their own countries. As a result， Covid-19 has thrown EU into unprecedented crisis.

When the pandemic ends， EUs world influence and soft power will decline. Similar to “Brexit”， Covid-19 has brought very negative effects to EU， damaging the cohesive force it relies on， breaking its international credibility and position. This crisis makes member states realize that they need to emphasize on their own sovereignty， thus drastically lower the possibility of additional power transferring to EU. To conclude， EU will not only hard to see progress in integration， but become a more loose organization.

Secondly， the pandemic may probably accelerate the decline of America， now that its world leadership and influence has moved down to another step. With world No.1 economic， scientific and military strength， the US not only failed to handle the pandemic due to its fault in policies， but also showed reluctance to take due international responsibility or to offer assistance to its allies. Contrarily， it even grabbed materials from its allies and stopped funding WTO. American unilateralism behavior greatly damaged its international image and undermined its international position and influence.

Against this backdrop， many a politician is worrying about whether Covid-19 will trigger the final decline of America. Kurt M. Campbell， former Assistant Secretary of State in charge of East Asia and Pacific affairs in Obama administration and scholar Rush Doshi published an article in Foreign Affairs in March， 2020， pointing out “the status of the United States as a global leader over the past seven decades has been built not just on wealth and power but also， and just as important， on the legitimacy that flows from the United States domestic governance， provision of global public goods， and ability and willingness to muster and coordinate a global response to crises.” This pandemic is “testing all three elements of U.S. leadership. So far， Washington is failing the test. As Washington falters， Beijing is moving quickly and adeptly to take advantage of the opening created by U.S. mistakes， filling the vacuum to position itself as the global leader in pandemic response.” They worry that China is trying to establish new standards and make itself an essential player， on which base China will renew its relations with countries all over the world. In their article they say that although US European allies havent publicly criticize its government， they have altered their stance on some key issues， which deserve as much anxiety of Washington. In 1956， the action in the Suez marked the destined end of the United Kingdom. If the US keep its present pattern， the coronavirus pandemic could mark another “Suez moment”.

Thirdly， overdue obsession with ideology and lack of self-reflection will accelerate the decline of the West. Just as that a countrys external influence is the reflection of its internal growth， external declination reflects internal decline. To make words explicit， the decline of Britain was not because of the rise of America and the decline of America is not due to the rise of China. The waning of American international leadership origins from both its domestic problems and its unilateralist practices since it gained sole hegemony. The US has become estranged from its European allies because of its unilateral policies since 9/11. Years later， the US had to adjust and reverse its former overdue strategic expansion. Especially， after Trump took power， America withdrew from many international treaties in a rush. Guided by “America First” principle， the US has lost the ability to play a leaders role in international stage just as its performance during the pandemic.

Now， western countries are highly dependent on Chinas medical materials supply. As a major manufacturer of medical materials， China is willing， able and morally compulsory to help other countries in the world. However， western countries worry that Chinas medical assistance to them may affect their peoples view about China. Western politicians overdue obsession with ideology has eroded their confidence in their own country and the people. This kind of mentality can do no good but prevent the West from correctly understanding the trend of international landscape evolution and making proper adjustments and changes. It may even accelerate the speed of the decline of the West.

Fourthly， the pandemic adds more difficulty to perplexing China-US relations， and brings more challenges to the relations between China and the West. Recent years have witnessed the constant escalation of the US trade war and science war against China and the potential of “decoupling” in many aspects. The two sides finally reached the first stage of trade agreement in early 2020 after back-and-forth struggles and painstaking negotiations. Scarcely had people seen silver ling of? China-US relations when Covid-19 broke out and rapidly spread all over the world. In the very beginning， some thought the pandemic might prompt the cooperation and provide the two countries with an opportunity to recover their relations. However， that didnt happen. Instead， China-US relations kept going down. A major factor is that Trump administration uses the pandemic to challenge China and manufacture confrontation. Especially， some American politicians try every means to blame and smear China， bringing more difficulties not only to the two countries anti-coronavirus cooperation， but also to already cold China-US relations.