Anthony Rowley

China’s trying to revive globalisation, but it can’t do it on its own

China is taking a lead amid a worrying plunge in global investment, a pandemic-ravaged economy and a climate crisis. But its efforts to shore up globalisation won’t work unless the US returns to engagement, for a start

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A Chinese worker works on the first China-Laos rail line, part of the Belt and Road Initiative, on February 8. China’s push to resuscitate globalisation is timely. Photo: AFP

Anthony Rowley

Published: 5:15pm, 8 Nov 2020Updated: 7:07pm, 8 Nov 2020

With globalism under savage attack by the Trump administration, it may not appear to be an opportune time for Beijing to be hosting a forum on China and globalisation, involving former Chinese ministers and others.

Yet this is the very moment when globalisation needs help, if planet Earth and its inhabitants are to survive, let alone thrive and prosper. Someone needs to take a lead and if that is China, then power to its arm while the United States recovers from its ignominious retreat under Donald Trump.

The severity of the damage wrought by Trump and Covid-19 in the form of trade wars, ruptured supply chains, slumping business confidence and a collapse in economic growth was recently underlined by data from the Organisation for Economic Cooperation and Development showing an accompanying dramatic slide in business investment.

Unlike portfolio investment in stocks and shares, which is subject to wild swings on the back of capital flows and sentiment (and which recent equity market euphoria has shown to be out of touch with economic reality), foreign direct investment in business assets reflects “real economy” prospects.

Trade can recover fairly rapidly if business and consumer confidence is solid, but investment in manufacturing and services does not bounce back readily, especially after the traumas caused to sentiment by a combination of the pandemic and the economic nihilism of the US administration.

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This is why the FDI trend is worrying. OECD data show that global FDI flows fell by 50 per cent in the first half of this year compared to the second half of last year, to US$364 billion, the lowest half-year level since 2013, and the decline is forecast to continue.