Globalization in 2017

Jan 19, 2017 5:30:00 PM / by Stephanie Sadler

“Connecting Global Cities” is a monthly column written by Colin Speakman, Resident Director for CAPA Shanghai.

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Happy New Year everyone!

2017 promises to be a challenging year for advocates of globalization. For decades we have seen globalization's growth linked to world economic growth, trade growth and international investment. The benefits have been seen as the spread of new ideas, innovation, technology and cultural practices to more countries, with growth of jobs globally and poverty reduction. 

Of course, there are winners and losers in the process. We saw in 2016 a backlash against globalization and in favor of putting the national interest first as in putting the US first or the UK first in political decisions and particularly some concerns about the movement of people between countries that is associated with global opportunities.

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Photo: A CAPA group in front of a mural of Paris on a supermarket in Shanghai from Colin Speakman

Globalization is linked to global cities which help spread the process. In my current home of Shanghai, I can see many examples of it. The German VW brand is the dominant player in provision of many varieties of taxis through long established Shanghai Volkswagen. There are many outlets of USA's Starbucks and UK's Costa Coffee alongside Pizza Hut, KFC, McDonalds, global fashion brands and international hotels and the list goes on. Yet when I take a trip into smaller towns in China and find cafes and restaurants, they remain the traditional kind not much changed for decades.  

Globalization does reach many in different ways. Take a small town in more rural USA. There was once a thriving factory, but it is now decaying - not because the goods it produced are no longer in demand, but because they are now made in factories in China. How do residents feel? Perhaps they miss their neighbors who left to find jobs elsewhere but they might also be happy to get the product more cheaply from China in the local shopping mall and pleased to hear that a community leisure center is to be opened on a new housing estate funded by foreign investment. The residents might recall that the old factory was noisy and polluting.

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Photo: An ancient southern China Watertown untouched by globalization by Colin Speakman

In much the same way, the UK's decision to leave the EU was a reflection of the difference impacts of membership of the "Euro Global Club". Growing up in the North West of England, in the UK's number one holiday destination, I saw little to reflect our membership of the EU, but I did see that domestic tourism declined as it became easier to go to the warmer destinations within the EU. No wonder those residents voted 67% for BrExit. Moving down to London to study and work, I saw clearly the impact of EU membership on that cosmopolitan global city - and loved it. No wonder 60% of Londoners voted to remain in the EU. 

This year, a new US President will talk about the importance of re-shoring American jobs, the pulling back of big trade agreements, and will be considering imposing punitive import tariffs on Chinese products to protect US jobs. Yet as I write this article, the World Economic Forum in Davos, Switzerland is taking place and China's President Xi is saying the opposite about the way forward for the world.

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Photo: President Xi Jinging at World Economic Forum January 17 by China Daily

The President of China stressed the importance of adapting to and guiding economic globalization and delivering its benefits to all. He said that many problems troubling the world are not caused by economic globalization including the international financial crisis which resulted from excessive pursuit of profits and a lack of financial supervision. The most pressing task the world faces is to get the global economy out of recession. To do this, President Xi calls for making full use of opportunities brought by globalization while working together on its challenges.

That speech suns up the choices we face, falling back into a world of trade protectionism and "me first" strategies that limit cooperation and collaboration or embracing globalization as a force for good, led by the examples of vibrant global cities.

It will be an interesting year. I wish you all well in it. 

Thanks Colin!

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Topics: Global Cities