From Globalization to Glocalization

The process of economic globalization has been evolving since the industrialization and integration of economies began around 1870. However, from 1914 to 1945, due to conflicts and disruptions caused by wars, the pace of globalization slowed down. From 1945 to 1980, as the post-war economies flourished, globalization rapidly advanced. From 1980 to 2008, liberalization further opened up the global economy.

Ivy Qin

9/27/20232 min read

two Mercedes-Benz vehicles
two Mercedes-Benz vehicles

The process of economic globalization has been evolving since the industrialization and integration of economies began around 1870. However, from 1914 to 1945, due to conflicts and disruptions caused by wars, the pace of globalization slowed down. From 1945 to 1980, as the post-war economies flourished, globalization rapidly advanced. From 1980 to 2008, liberalization further opened up the global economy.

However, after 2008, there was a turning point in the trajectory of the economy, transitioning from globalization to slowbalization. In recent years, factors such as the Covid-19 pandemic, the US-China trade war, and the US sanctions on Chinese semiconductor manufacturing have contributed to a deceleration in the growth of globalization. This has led many to question whether economic globalization is beginning to fragment.

Take the Covid pandemic as an example. In 2019, China implemented multiple lockdown measures to restrict the movement of people and economic activities. This led to a reversal in the flow direction from Asia to North America and Europe. As China is a vital link in global manufacturing and supply chains, the slowdown and restrictions in its economic activities had far reaching effects on global trade and supply chains. The flow of goods and services from many Asian countries to North America and Europe was hindered.

Would globalization become "glocalization"?

We can observe a new pattern of globalization, but it is impossible to completely eliminate the interconnections among countries.

On one hand, capital plays a significant role. Capital always seeks to maximize profits, and thus, developing countries with low costs and high efficiency remain major production locations.

On the other hand, each country possesses different resources, making complete self-sufficiency difficult to achieve. According to McKinsey, China imports more than 25 percent of its mineral needs; the largest minerals corridors in the world run from Australia, Brazil, Chile, and South Africa to provide the inputs for China’s manufacturing hub.The Middle East, being rich in natural resources, heavily relies on products manufactured by other countries. Certain natural resources are concentrated in specific countries worldwide.

For instance, iron ore and cobalt are concentrated in the Democratic Republic of Congo. They depend on imports for 50% of their electronic products and 50% of their medical products from other countries. North American countries rely on products manufactured by over 60 million people outside of North America, while European countries rely on products manufactured by over 50 million people outside of Europe.

Regions cannot achieve complete independence. If certain countries want to completely sever their ties with other countries, it would be unlikely to achieve. However, it is possible for some countries to form alliances and reduce connections with other countries. The current decoupling is only partial to a certain extent, rather than a complete instant severance.

Another emerging trend is digital globalization. Technology has woven a network connecting the entire world. Especially during the lockdown in 2020, global internet traffic increased by 47%. This was followed by a 23% growth in 2021 and a 29% growth in 2022.

China exports over 60% of highly concentrated products in the electronics and textiles sectors. The Asia-Pacific region contributes significantly to the export of highly concentrated minerals. Minerals such as lithium, rare earths, and graphite are particularly concentrated, primarily sourced from three or fewer countries and mostly refined in a single country, namely China. Latin America and North America dominate the export of highly concentrated agricultural products, notably soybeans. The majority of highly concentrated medical and pharmaceutical products come from Europe.