Globalization, as a concept, refers both to the “shrinking” of the world and the increased consciousness of the world as a whole. It is a term used to describe the changes in societies and the world economy that are the result of dramatically increased cross-border trade, investment, and cultural exchange.

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Since the financial crisis broke out in 2008, major Western countries have had trouble maintaining domestic and international liberal order, and they are less willing to engage in global governance. By contrast, China and other emerging countries are striving to advance globalization.

 
New round of globalization
Building on the existing foundations of globalization, China contributed a series of new mechanisms to global governance, like the “Belt and Road” (B&R) initiative, the Asian Infrastructure Investment Bank (AIIB) and the concept of a community of common destiny for all mankind. Advocating inclusiveness and sharing, the country is expanding and upgrading the old pattern of globalization.

Historically, the fate of globalization has been closely linked to the rise of emerging countries. Every transfer of power led to the expansion of globalization.

It originated with Magellan’s voyage in the 15th century, and progressed further during the Industrial Revolution, when the Western world was integrated. Then, the rise of the United States promoted globalization to the state of trans-Atlantic global governance by the United States and Europe.

After the Cold War, as Asia and especially China developed, a new round of globalization was characterized by a trans-Pacific partnership. In this round of globalization, China has played a significant role.

 

Ballast of world economy
China is driving global economic growth and leading the resistance against the anti-globalization trend. Since the financial crisis hit in 2008, global economic growth has been weak and global value chains have been shrinking.

Since 2012, global trade volume has decreased dramatically. The WTO forecasts that global trade will grow by only 1.7 percent this year, which is lower than the global GDP growth rate for the first time in the last 15 years.

In addition, according to a report from the Global Trade Alert, the number of protectionist trade measures released in 2015 increased by 50 percent over the previous year. In 2015 countries drafted three times as many protectionist measures as free trade measures.

In 2015, the United States implemented 90 protectionist measures, the most among all the countries, followed by Russia and India, which issued 86 and 67, respectively.

It is apparent that China remains a staunch advocate of globalization, serving as the ballast to the world economy, while some countries are resorting to protectionism. As the second-largest economy, the largest trading country and the second-largest source of foreign investment in the world, China is becoming the biggest contributor to the world economy. In 2016, China contributed 33 percent of the global economy, turning into the biggest driving force.

 

Major provider of public goods
China is also a net exporter in the fields of economic and social development. In 2016, China surpassed the United States to become the world’s largest market for business travel. Amid the world economic downturn, in 2015, 120 million Chinese people went abroad, consuming $104.5 billion. Travelers and consumption increased by 12 percent and 16.7 percent, respectively.
Moreover, in recent years, China has increased foreign direct investment as well as mergers and acquisitions, and areas have been expanded in this respect.

Since China entered the WTO, its trade exports have increased about 7.6 times, from nearly $267 billion in 2001 to about $2.3 trillion in 2015, while the imports increased nearly six-fold, from around $243.6 billion to nearly $1.7 trillion. Now, China has become the world’s largest reserve country and the second-largest economy.

The B&R initiative, the AIIB and other public goods through which China is engaged in improving global financial governance are regarded as China’s new calling cards. In 2015, the volume of RMB-denominated cross-border trade reached $1.1 trillion, accounting for 30 percent of the country’s foreign trade and 3 percent of global trade.

In 2000, the RMB was not a method for cross-border trade settlement. At the time, the country took a number of steps to internationalize the RMB through bilateral agreements with Australia, Japan, South Korea, Russia and other countries. The People’s Bank of China established nearly 20 offshore RMB clearing centers in Singapore, New York, London, Frankfurt, Doha and other financial hubs.

 

Inclusiveness and sharing
China believes that the values of inclusiveness and sharing should be at the core of the globalization process. The country has had a culture of regarding the whole world as one community since ancient times.

The 18th CPC National Congress report officially raised awareness about human beings sharing a community of common destiny. The idea of mutually beneficial cooperation with neighboring countries successfully integrates “you” and “me” into “us.” China is offering a new alternative to global governance that diverges from that of Western countries.

Additionally, China is utilizing its advantages to provide public goods for the world. Since the 18th CPC National Congress, Chinese diplomacy has shown new characteristics. Relying on new strategies, like building a community of common destiny, the B&R initiative and the AIIB, China is unfolding its new pattern of engagement in global governance.

For example, the concept of connectivity within the “B&R” framework creates more opportunities for countries to allocate, integrate and utilize a wider range of resources.
In May, the first ever Belt and Road Forum for International Cooperation was held in Beijing, attracting 29 leaders of countries and important international organizations. This was a historic attempt to institutionalize the B&R initiative and make it multilateral as well as to promote its long-term development.

China also aims to improve international financial governance. Since the 18th CPC National Congress, China has proposed a series of financial institutions and mechanisms, such as the New Development Bank, the SCO Development Bank, the Silk Road Fund and the AIIB.
This reflects the country’s potential to achieve institutional innovation as well as the spirit of inclusiveness, openness and cooperation.

 

Engagement in security cooperation
 China is also active in regional cooperation on security. On June 9, the Shanghai Cooperation Organization (SCO) accepted India and Pakistan as member countries, representing the organization’s first expansion since its 2001 inception.

 As the first international security organization named after a Chinese city and an important public good initiated by China in the field of security, the SCO observes the Shanghai Spirit, characterized by mutual trust, mutual benefit, equality, consultation, respect for diverse civilizations and seeking common development.

The rules for globalization are undergoing radical adjustment and various players are pursuing different visions of globalization that benefit their own interests.

 Though complicated, the driving forces for the process are being shifted. It is an inevitable trend. In the new round of globalization, winners will not take all. Instead, the operational goal will be to collaboratively shape the process and finally reach harmony.

 This round of globalization is not starting over from scratch. Rather, it is an enhancement of current international frameworks through internal reforms. China will contribute to creating new rules and forms of globalization based on growing interaction with the world.

 

Cao Dejun is from the School of International Studies at Peking University.