Over the past four decades, globalism has seen much of the world’s manufacturing shift from the West to Asia, and especially China.
But as I’ve written before, President Donald Trump’s trade war with China has been a major factor in the effort to reverse that trend. Now, in the pandemic era, regionalization looks like a reasonable alternative to the destruction that China-centric globalization has brought to major Western nations’ economies.
In all likelihood, the current pandemic has only added a new urgency and potentially even permanence to the de-globalization trend that the world is experiencing. Global decoupling from the China-centric manufacturing model will be, in the long term, good news. It will be the push that Western countries need to revitalize their industrial sectors.
As we’ve seen, China-centric supply chains, while profitable for multinational corporations, have several downsides that are now being felt around the world.
Medical Supply and Pharmaceutical Risks
Of primary importance, of course, is the medical equipment and pharmaceutical shortages that are hamstringing America’s efforts to combat the CCP virus pandemic. For example, the United States has been critically dependent upon China for N95 medical masks. Unfortunately, China hasn’t been as helpful as needed, with acrimony and logistical problems holding up supplies.
Similar problems are occurring with other medical supplies, such as ventilators, face shields, and other crucial medical equipment. The pandemic has revealed the danger of countries not being able to protect their populations due to reliance on another country’s goodwill, or in the case of China, ill will.
Indeed, in an article by Xinhua, the state-run media agency, Chinese authorities said: “If China retaliates against the United States at this time, in addition to announcing a travel ban on the United States, it will also announce strategic control over medical products and ban exports to the United States. Then the United States will be caught in the ocean of new coronaviruses.”
Put politely, the pandemic has shown China to be an unreliable and high-risk trading partner.
The reaction in the West to China’s behavior has been predictable. Key medical and pharmaceutical capacities will soon be repatriated to Europe and the United States. This will cut their reliance on distant supply chains that have proven unable or unwilling to meet their needs when it counts.
Strategic Manufacturing Exposure
But medical dependency isn’t the only risk that we’ve seen from relying on China-centric supply chains. Beijing has tremendous leverage over the United States’ ability to wage war due to China’s control over materials that are critical to many of America’s strategic weapons systems.
For instance, the United States is almost totally dependent on China for some F-35 fighter jet components and rare earth metals, among other high-risk dependencies. Those are crucial for U.S. missile guidance systems, satellite communications, lasers, and other critical systems. These are the same military systems that the U.S. military relies upon to deter Chinese aggression against U.S. allies such as Japan, South Korea, and even Taiwan.
With 85 percent of the world’s processing capacity for rare earth metals, China has roughly five times the capacity of the rest of the world combined. The vulnerability level is unacceptable.
How long will it be before China decides to militarily take advantage of that leverage?
That’s an especially relevant question given the rising trade and military tensions between the United States and China. The irony would be comical were it not so dangerous.
Intellectual Property Risks
The risk of intellectual property theft in China is now known throughout the world, costing the United States alone $300 billion to $600 billion every year. The trade war, and of late, the global pandemic, have given the United States, the UK, and the eurozone the impetus they needed to redirect manufacturing back to their countries.
That’s a good thing for not only stimulating employment but also for maintaining a competitive advantage. The calculation is simple. Repatriation largely eliminates the need to share or expose IP to Chinese business or manufacturing “partners” that will only steal it and then compete against their Western partners.
Breaking that cycle can only be a win for Western companies.
Dishonesty in Disease Reporting, Containment
The pandemic has revealed the existential risk that China poses by its criminal lack of honesty and utter disregard for the rest of the world. By knowingly allowing millions of its citizens to travel to points far and wide for up to two months after knowing about the deadly virus in its midst, China has lost all credibility. It has literally infected the entire planet by its silence and deception.
The current pandemic isn’t the first incidence of dangerous pathogens being released into the world from China, and probably won’t be the last. The domino effect is likely to be much less trust and travel by Western countries and businesses. Video conferencing will likely increase as in-travel to in-person meetings to China greatly decrease.
A Clash of Civilizations
What has become apparent over the past couple of decades is that cultural differences are a bigger factor in trade and supply chains than we realized. From legal recourse and competing ideas on intellectual property, to labor practices and fair trade, China and the West hold differing views that are, often as not, in conflict with one another.
These differences aren’t only a product of differing political and economic systems, but also from conflicting cultural outlooks. The wide gap between the two is not likely to narrow anytime soon.
Not surprisingly, the divisions between the West and China have actually grown greater these past two decades than they seemed to be in the past. That is likely because China has become a major player on the world stage for the first time in history, which has exposed those deep cultural differences as it vies with the West for strategic global pre-eminence.
It’s deeply inhumane behavior that caused the pandemic and thousands of deaths around the world has made its “inevitable” rise highly doubtable and vastly undesirable. Who, after all, would want a world led by Beijing?
With any luck, de-globalization will prevent that.
James Gorrie is a writer and speaker based in Southern California. He is the author of “The China Crisis.”
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.