Zheng Yongnian is the presidential chair professor and founding director of the Advanced Institute of the Chinese University of Hong Kong’s Institute for International Affairs in Shenzhen, south China. He is also a former director of the East Asian Institute, National University of Singapore, and a former research director and professor of the China Policy Institute, University of Nottingham. His research interests include international relations, foreign policy and China’s internal transformation and its external relations.

A photo presents the front profile of Zheng Yongnian.

Zheng Yongnian

In 2020, China’s economic aggregate passed the 100-trillion-yuan mark ($15 trillion), accounting for more than 17% of the global economy.

China’s role in the world has undergone immense change. Once a backward country, it has now become an important influencer in the international power structure. This transformation, however, is regarded with suspicion by some. U.S. Secretary of State Antony Blinken, for example, has repeatedly accused China of undermining the international order.

Zheng Yongnian assesses if China’s rise will have a fundamental impact on the current international order and who is actually destroying the international order.

CNS: How do you regard the accusations by some Western media that China is sabotaging the international order.

Zheng Yongnian: The so-called international order mainly refers to the international rules established after World War II. But who is actually disrupting the order? The United States. When Donald Trump was president, the United States withdrew from a series of UN organizations and international agreements, including the World Health Organization, UNESCO and the Paris Agreement. Moreover, the United States has always refused to join the United Nations Convention on the Law of the Sea.

China has always been a protector of these rules, certainly not a destroyer of international rules or a revolutionary. It has been cautious even in its own reforms. According to the Western logic, China’s rise to power is bound to lead to a Chinese camp. For years, the U.S. has been talking about forming a “world team” against “Team China.” But China has no camp, no team. China stays within the system without forming cliques.

But some Westerners have been projecting their own logic on China. For example, some people say the Belt and Road Initiative and the Asian Infrastructure Investment Bank (AIIB) were launched to break the existing order. But the AIIB, which follows the most advanced rules in the world, was established to finance infrastructure projects in Asia, something that the World Bank and the Asian Development Bank have not done. Therefore, the AIIB does not take away the “rice bowl” of others, it supplements international rules.

China is not a destroyer of the international order, but a reformer trying to make the system complete.

CNS: What is the starting point of China’s reform and how does it complement international rules?

Zheng Yongnian: In the early days of colonialism and imperialism, Western countries established colonies in Latin America, Africa and other regions to plunder resources and support their own domestic development. But today, the West is stigmatizing China’s investment and construction assistance in Africa and Asia as plundering resources, and even “neo-colonialism” and “debt imperialism.” But this is the West’s own experience, not the Chinese behavior. China has been helping countries in Africa and Asia build railways, highways, hospitals, stadiums, schools and other infrastructure. Why? Because such infrastructure development is a necessary condition for any country’s economic development, and China itself has done the same.

CNS: Will China have a greater role in the making of international rules in the future?

Zheng Yongnian: China doesn’t make up rules behind closed doors or impose its own rules on other countries like the United States. China learns from the West’s rules first and then formulates its own rules. China has borrowed many good rules from the West during its development as the world’s second largest economy.

Going forward, China needs to continue to digest and absorb the good rules in the world, and at the same time, improve, strengthen and supplement the existing international rules in light of its own conditions. China’s real contribution to the world may come from the contribution of standards and rules. Of course, in this process, China needs to consider the interests of other countries. For many developing countries in Africa, Latin America and elsewhere, China’s rules and programs offer a non-Western alternative, not an anti-Western one.

CNS: You have said that the world has entered an era of “limited globalization” after the pandemic. How does this differ from the “super globalization” that preceded it?

Zheng Yongnian: Since the 1980s, the world has experienced a wave of “super globalization.” The concept was developed by Harvard economics professor Dani Rodrik. In this wave of “super globalization,” Western countries, especially the United Kingdom and the United States, have promoted privatization and financial liberalization with neoliberal economics as the leading force, enabling a relatively free flow of production factors such as capital, technology and talent around the world.

Along with the flow of capital from the Western developed countries to developing countries, Western countries have also moved their low-technology and low value-added industries to developing countries. This has led to a global reallocation of industrial and supply chains.

The global flow of production factors has created a huge amount of wealth. Both the developing countries, represented by China, and Western developed countries are beneficiaries of this wave of globalization. But many negative effects have also surfaced. Although we are in an era of globalization, its national units are still sovereign states, and sovereign states cannot lose all economic sovereignty. But the biggest problem is that in super globalization almost no sovereign state still has full economic sovereignty.

Take the UK, for example, which pursued Thatcherite neoliberalism (the political and economic policies of former Prime Minister Margaret Thatcher characterized by privatization of state enterprises, free markets and greater individual independence from the state) and got a City of London, its financial district, but gave up an entire manufacturing sector. Brexit is actually related to that.

The U.S. boasts the most advanced medical system, but according to U.S. statistics, it relies on China for more than 80% of its medical supplies and more than 90% of its antibiotic production. This has become a sharp security issue after the outbreak of the COVID-19 pandemic. Another consequence of this loss of economic sovereignty is that since the 1980s, the U.S. middle class has fallen from about 70% to about 50%.

China has not just benefited from super globalization but suffered, too. On the one hand, China has been able to introduce many advanced Western technologies at home and become a major technology application country, but on the other hand, it lacks original technology and R&D motivation. Under the influence of neoliberalism, many people assume that the world market will always exist and if you want something, you can go to the world market to buy it. But now, under the restriction of the sale of advanced technology and equipment to China by the United States, Huawei and other Chinese companies are facing difficulties.

In the long run, it would be normal if the world market goes out of existence. It is just luck that it has continued to exist. The world is entering an era of “limited globalization,” which is likely to return to the characteristics of the period from 1945 to the 1980s. In this stage of globalization, capital and technology will still flow, but they will be restricted. The degree of trade will be reduced, and the economic sovereignty of each country will be strengthened.

CNS: Will globalization really return to the way it was over 40 years ago?

Zheng Yongnian: It will be similar to the period from 1945 to the 1980s, but with a difference. At that time, the industrial and supply chains of each country were relatively complete. The so-called “Made in America,” “Made in Japan” and “Made in Germany” brands basically manufactured entire products; but since the 1980s, it’s hard to tell exactly which country is the manufacturer. What people call “Made in China” is more likely to have been assembled in China. Parts and materials may come from Japan, other Asian countries or regions, or even Western countries. All kinds of parts and raw materials come to China and are assembled there and then exported elsewhere.

For example, the United States has basically shifted the manufacturing of relatively low value-added and low-technology products to other countries, including chip manufacturing. People say the United States controls the chip industry, but in fact it controls the chip design. U.S. chip manufacturing has gone to countries and regions like the Chinese mainland, China’s Taiwan, South Korea and Japan.

Can countries still produce entire products on their own? After the previous wave of super globalization, it is hard now. The United States cannot move all its production chains back home, nor can Japan or Germany, so it is difficult to completely change the interdependence between economies and production. In short, it is now hard to imagine a world economy that is completely decoupled.

CNS: How will this limited globalization affect the global supply chain and industrial chain?

Zheng Yongnian: Historically, economic logic will eventually defeat political logic, so the shape of the industrial chain will not be completely changed. After globalization and opening up, no country can ever return to an autarky economy. In the COVID-19 outbreak, the industrial chains in Europe and North America have been significantly affected, but the industrial chains and productivity in Asia have strengthened rather than weakened.

The formation of industrial chains has its economic principles, roughly in line with Adam Smith’s comparative advantage. Once comparative advantage is lost and the industrial chain moves away, it is difficult to move it back. Once the industrial chain is formed, it is not so easy to force its adjustment artificially. In the United States, for example, it is hard for the White House to force Wall Street to do exactly what it wants. The White House may influence the industrial chain in the name of so-called national security, but it is difficult to change the overall pattern.

In the past, the three major global supply chains were centered in Europe, the United States and East Asia, especially China. This pattern will not change greatly, and the three major supply chains will not be completely self-sufficient in the future. Both in terms of comparative advantages and division of labor, they still have their own characteristics, such as originality and design, which are predominant in the United States. But in terms of manufacturing, the United States is unlikely to move the manufacturing capacity of Germany, Japan, etc. to its own soil.

Competition is inevitable. Whether the United States, Germany or China want to go up the industrial chain, the competition will be greater and more fierce.

CNS: Will the global supply chain restructuring be de-sinicized? What are the opportunities for China in the future?

Zheng Yongnian: De-sinification is too extreme. Globalization is the logic of capital; capital is open, it goes to lucrative places. Therefore, the flow of Western capital to China will not be interrupted, and China will not be completely decoupled from the United States or other Western countries.

China has the most complete industrial chain in the world, with various industrial sectors. At the same time, China is the largest single market in the world, with a middle class of 400 million people, which is expected to more than double in the future, and huge consumption potential. In many areas, the simple consumption choice of the Chinese can determine the price of many products in the world market. So we can be confident that China will retain Western capital and technology. In 2020, China was the world’s largest recipient of foreign investment.

In technology, China will inevitably face a Western blockade, especially from the United States. But since its reform and opening up, China has accumulated more than 40 years of experience in technology. British sinologist Dr. Joseph Needham’s History of Science and Technology in China shows China’s science and technology prowess was brilliant in the past as well. Since the 1980s, China has been a big country in applied technology, but now it needs to turn into a big country in original technology, and there is still much room for development.

At present, China’s domestic market is still basically segmented, and the domestic rules are not completely unified. For example, the rules in the Pearl River Delta are different from those in the Yangtze River Delta, and the Yangtze River Delta has different rules from the Beijing-Tianjin-Hebei region. Therefore, internal circulation should be used to unify the domestic rules. The labor productivity that uniform rules can create will be immeasurable.

CNS: Faced with the phenomenon of limited globalization, what will happen to the world pattern in the future? Will the role of the so-called “central state” change?

Zheng Yongnian: In the past, the world was known as “one super, many powers,” the “one super” referring to the United States and the “many powers” referring to economies such as China, Russia, the European Union and Japan. But now the world has changed so much that multipolarity is not enough to describe the change. The future world is deeply diversified. Simply put, the United States is still a great power, but not in all areas. It is declining in some areas but still leading in some. The same is true for China, Russia and Japan. Each country is a diverse and interlaced complex in the political, economic, cultural and social fields.

The so-called “Thucydides trap” theory, in which one country replaces another, is an either-or view. People should get out of this Cold War mentality and look at the world from a truly diverse perspective.

In terms of the economic center, the world economic center has been in Europe and North America since modern times. Since the twenty-first century, with the rise of China, India and other Asian countries, coupled with the state of Japan and other traditional powers, the world economic center has shifted to Asia. This situation will not change for the next 20 to 30 years or more.

CNS: What role will China play?

Zheng Yongnian: China has arguably been a source of stability in Asia since Emperor Qin Shi Huang, the founder of the Qin Dynasty, unified China more than 2,000 years ago. Objectively, China has long been a stabilizer of the Asian economy. It played a huge role in stabilizing the economy during the 1997 Asian financial crisis. After that, China acted as a stabilizer once again during the 2008 global financial crisis and the COVID-19 pandemic since 2020. It will also play a leading role in the future as its domestic market continues to grow and it moves up the technology chain. Stability and leadership will be China’s main contribution to the world economy.

(Interviewed by Pang Wuji)