When China Rules The World

by Martin Jacques

In the longer term, as Chinese companies relentlessly climb the technology ladder, the US economy will face ever-widening competition from Chinese goods, no longer just at the low-value end, but also increasingly for high value-added products as well, just as happened earlier with Japanese and Korean firms.178 In that process, the proportion of losers is likely to increase rapidly, as will be the case in Europe too. Such a development could further undermine the present shrinking consensus in support of free-trade globalization and strengthen support for protectionism, with the main target being Chinese imports.179 If the United States did resort to protectionism, one of the key planks in the Sino-American relationship since the early eighties would be undermined. It would also signal a more general move towards protectionism worldwide and the conclusion of the phase of globalization that was ushered in at the end of the 1970s. The failure of the Doha round is a further indication that this kind of scenario is possible, if not yet likely.

So, I guess we are entering a new era.