Be wary of the three consequences of rapid deglobalization

A lady wearing a face mask stares at a mural fresco portraying a global map with tags saying ‘Fragile’ by French street artist Ender, 28 May 2020, Paris, France. (Source: CHESNOT)

The struggle among major powers in the industrial and supply chains is amplified and intensified by de-globalization. The most obvious is that the United States, Japan, and other countries have proposed returning the industrial chain to the country in order to expand domestic employment and alleviate the hollowing out of the industry, but this logic obviously contradicts the layout of the international division of labor, and it also significantly reduces the global supply chain’s external demand. 

Regarding sanctions on Russia and other countries, Europe and the United States employ state authority to limit the free flow of their own wealth and companies. This boils down to the extremeization of governmental economic control. Because changes in the global supply chain “affect the entire body,” when some supply chain participating countries withdraw from the supply chain, it will seriously affect production cooperation and production capacity of upstream and downstream countries, and may even lead to the supply chain’s rupture. 

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At the same time, supply chain competitiveness has emerged as a critical component of global competition. The US is forming technical and economic alliances against China, including the EU-US Trade and Technology Committee (TTC) and the Indo-Pacific Economic Framework (IPEF), as well as a chip alliance. The US has tightened restrictions on China in key technology fields, constantly tightening restrictions on personnel exchanges, tightening investment access, strengthening technology controls, promoting “decoupling” of China and the US in science and technology, and attempting to build a closed and confrontational supply chain system. The objective to stymie China’s ascension to the top of the industrial food chain is clear. This edifice of restricted and antagonistic “small circles” politicizes economic matters. It is a new form of anti-globalization movement, and it is far more dangerous. 

In a nutshell, with increasingly fierce competition among major countries in artificial intelligence, quantum computing, digital economy, 5G, and other industries and high-tech fields nearing critical stages of application, it is expected that countries will continue to develop high-tech industrial chains, supply chains, and supply chains. The fight for chain domination will get more severe, and the pace of de-globalization will exacerbate it! (M. Raihan Ronodipuro)

M. Raihan Ronodipuro achieved a Master of Law in International Relations from the School of International and Public Affairs at Jilin University in China. He serves as an Associate Researcher in the Department of Politics and Security at the Center for Indonesia-China Studies (CICS). Raihan is currently working as a special aide to the Great Indonesia Movement Party (Gerindra) faction at the House of Representatives of the Republic of Indonesia (DPR RI), assigned to committee 1 (defense, foreign, and Information Affairs).