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Cooperation, not conflict, is the way

By Zhong Feiteng (China Daily Europe) Updated: 2017-03-05 15:48

The great powers need to get closer in order to solve the world's problems

Has President Donald Trump rewritten history in promising "America First"? He tells his supporters that globalization has led to inequality and political gridlock in United States. He believes his country receives unfair treatment in the world economy. In Trump's words, "We have to stop our jobs from being stolen from us."

The solution Trump suggests is a retreat from globalization. As a result, he has withdrawn the US from Trans-Pacific Partnership and declared a potential trade war with China.

Cooperation, not conflict, is the way

In an interdependent world, however, this kind of extreme action will not make the US great again. To some extent, the Bretton Woods Multilateral System, under US leadership, promoted prosperity and freedom for the world. This was particularly true for Europe and the US in the early days after World War II. The enlarged market and stable environment helped Western countries realize a growth rate unparalleled in the history of humanity.

Angus Maddison, the late Organization for European Economic Cooperation economist, once called the period from 1950 to 1973 "a golden age", when per-capita GDP averaged an annual rate of nearly 3 percent and world GDP nearly 5 percent. The growth of the international economy was strongly supported by the international and domestic political arrangements of the developed countries. Without international political consensus the world could not have established multilateral arrangements. To establish an open international market for its alliances and partners, Western Europe and the US reformed their industrial relations. The new compact between the workers and the capitalists led to a great enlargement of the middle class and this growing middle class has been the main pillar of democracy.

Benefiting from the diffused effects from advanced countries, East Asian countries enjoyed their best performance between 1973 and 2001. The success of China is a part of this great story. It opened its doors after 1978 with Deng Xiaoping's reform and opening-up policy, and integrated gradually into the world economy. It has been a huge success as China has improved its living standards over the past four decades. Hundreds of millions escaped the poverty trap. The story of China is one of the best demonstrations of globalization's positive effects.

If Trump's logic could be extended to the global scale, it would be difficult to believe that the poor of China benefited from globalization, while the richer Americans lost from that process.

However, Chinese per-capita GDP is still lower than that of the US. According to the IMF, the per capita GDP of China might account for 20 percent of that of the US in 2020. Although China faces serious domestic challenges, its government tries to persuade its people to integrate more with the outside world. As President Xi Jinping said at the 2017 World Economic Forum in Davos: "Whether you like it or not, the global economy is the big ocean you cannot escape from."

The difference between Trump and Xi is that China regards globalization as an opportunity. The Chinese waited a long time to embrace this new world. In China's view, countries should jointly meet challenges and collectively reform global economic governance. To Trump, however, globalization is a problem for the US. "Trump sees the world in terms of a zero-sum game," said Joseph Stiglitz, a Nobel Prize winner in economics, in a recent article entitled "How to survive the Trump era". Even more, Stiglitz claimed that "it is not normal for the US to have a president" like Trump.

The world view reflected in Trump's addresses seems to create uncertainty and chaos for many countries. Allies of the US worry about its commitment and willingness to maintain stability. Emerging markets are also afraid of US economic prospects and its attitude toward globalization. Whether globalization or technological progress created inequality is still a subject of hot debate in the US, but the new administration is moving in the deglobalization direction. If Trump closes the US market to the outside world, the rest of the world will certainly lose its dynamism in the short term. But in the long run US competitiveness will decline without enough skilled labor, especially global talent.

Beyond his views on globalization, there is a much more dangerous aspect to Trump's geopolitical view. He attempts to play the "China Card" to adjust international strategy.

The idea of a US-Russian alliance against China is one without strong support in either Russia or the US. In the view of mainstream foreign policy circles around the world, it is difficult to utilize a Cold War mental map to guide international strategy.

This era is very different from the 1970s when the US established a semi-alliance with China. Today, the fundamental characteristic of Sino-Russia relations is a very close friendship. Both China and Russia recognize that the two sides' relationship goes beyond a "strategic partnership" and serves as a force of stability to uphold regional and world peace.

For Russia, the biggest challenge lies in its economy and status as a great power. In recent years, its economic growth rate has been lower than the average world level. It is expected that the growth rate of the Russian economy for 2016 will reach only 0.5 percent. Russia would like to see accelerated world economic growth, especially rising commodity prices, which are still very important to its own economic growth. Improved relations with China are in Russia' national interest.

The Trump administration now has a good opportunity to reshape US-Russia relations. In Russia's view, the relationship reached its lowest level during the Obama administration. Sergei Lavrov, Russia's foreign minister, recently addressed the country's lower house of parliament and said, "We would like to see Russia, the US and China develop relations together. This triangle should not be closed and directed to projects that will alert other states." Almost at the same time, Zbigniew Brzezinski, one of America's foremost geopolitical strategists, also suggested that for US "the ideal geopolitical response to the crisis of global power is a trilateral connection between the United States, China and Russia."

Why is cooperation between the major powers so important to the world? The aftermath of the 2008 financial crisis suggests there is a long road ahead in reviving the world economy. If the major powers take no active measures and damage mutual trust between each other, the world economy could suffer. Michael Mann, a sociologist at UCLA, in his fourth volume of The Sources of Social Power described a scenario for us. He predicted that global capitalism will enter a relatively low-growth era from now until 2050. It might be lower than 2 percent, the average growth rate of developed countries over the past two centuries.

The good news is that G20 countries upgraded their thinking on the way to reviving the world economy. In September, the G20 Leaders' Communique declared: "We believe that closer partnership and joint action by G20 members will boost confidence in, foster driving forces for and intensify cooperation on global economic growth, contributing to shared prosperity and better well-being of the world."

In Davos, Xi has promised that China will continue to open its market to defend globalization and move toward a more balanced, equitable and inclusive development model. China will host the Belt and Road Forum for International Cooperation in May in Beijing to discuss a global compact to cope with the challenges.

With an improvement of relations between the major powers, the international political foundation for deep and broad cooperation would be consolidated again.

The author is a senior research fellow, National Institute of International Strategy, Chinese Academy of Social Sciences. The views do not necessarily reflect those of China Daily.

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