Will globalization be the next casualty of the economic crisis?

The economic crisis has shaken people's confidence in financial institutions. The share price of Citigroup, once a leading giant in the financial sector, has plummeted from thirty dollars to less than a dollar in just a few weeks. Shockwaves of the crisis have sent banking giants and even some nations to the abyss of debt's traps. Under the premise of securing employment and financial systems from the blow of the crisis, advocacy of trade and financial protection will gain a wider support in most inflicted countries.

Some commentators speculate that globalization will come to a halt in the wake of the economic crisis. It would be true if globalization is only about international trade and finance. The above claim would be far from reality if globalization is referred to the widening, deepening and speeding up of global interconnection of contemporary social issues and not just confined to financial activities.

The upward trend of interconnection among social organizations around the globe doesn't seem to slow down in the recession years. In some domains, economic crisis even bolsters international activities. Global charity is one example. A growing number of people will seek help in the aftermath of the fiancial tsunami. The demand for charity services will soon catch up. This also applies to religious activities. A widespread hardship will heighten people's interest in religions.

It is true that private flows of credit and investment across borders have plummeted as a result of the economic crisis. For instance, by the end of 2008, the demand for imported goods in the U.S.fell drastically, shrinking the country's trade deficit by almost 30 percent. In China, the imports and exports have dropped 21 percent and 3 percent respectively. Last November, capital flows to emerging markets reached their lowest level since 1995 and issuance of international bonds came to a halt.

Despite the shrinking of private economic activities, the international flows of public funds are booming. Central banks around the world including the U.S., Mexico, Brazil, Singapore and Korea have injected 30 billion dollars to stabilize the fiancial markets. This will inevitably strengthen the international links among central banks.

Facing the economic downturn, some nations may adopt protection policies in trade and finance. Protectionism may even extend to immigration policies. Tightening immigration to keep job vacancies for locals will be most welcome by protectionists. However, any form of protectionism is costly and unstainable. In a globalized world, the ability of nation states to fence off external impact on their economy and society has largely declined. Protectionism will be unlikely a maintream in the foreseeable future.

Owing to its diverse and deepening influence in all aspects of society, globalization will continue even in the midst of the economic crisis. Like it or not, we will still live in a globalized society.

Reflection on the thirty years' reform and opening up in China

Last year was the 30th anniversary of reform and opening up in China. In the past thirty years, extreme socialism, once a dominated ideology in China has faded out and given way to market-led economy,unleashing enormous productivity that has fueled astonishing economic growth. The success of Beijing Olympic Games and 'space walking' by astronauts have elevated Chinese national pride to a new level. Despite the achievements made in the last thirty years, we should not simply assume the same success in the future without giving much thought.

Economic success in the past was based on cheap land price and labour.We are losing our edges on these comparative advantages as they are not irreplaceable. Expanding our domestic markets is deemed necessary to get through the bottle neck of economic growth. However, the lag-behind social welfare systems, such as health care and education have forced people to save most of their incomes for a rainy day. Boosting domestic consumption in a society in which people are reluctant to spend is a target beyond reach.

Skyrocketing economic growth in the past thirty years has successfully lifted millions from poverty. Despite this amazing achievement,high income disparity still plagues society.Collusion between private sectors and government officials further aggravates the problem. Narrowing the wealth gap and allowing more people to reap the fruit of economic growth are vital to the growth of domestic consumption which is believed to be the next growth engine of China's economy.

Economic growth should not be taken as the only indicator to gauge the achievements of China's reform and opening up in the past thirty years. In the past three decades, the pace of political reform fell far behind economic growth. There is still plenty of room for improvement in the arenas of political participation, freedom of speech and press. Emergence of the middle class can be translated into a greater demand for rights and better social justice. Using suppressive means to resolve social conflicts,as done by most authoritarian regimes, only brings more social unrests. A just legal system, culture of rule of law, a lax restriction on NGOs and more open media all help vent the public grievance. Frequent incidents of appeal to the higher authorities and regional mass movement recently have signaled unpopularity of the administration.

China must launch political reforms, which invite more democracy in order to keep pace with the economic development. Otherwise, the 'one-leg' economic reform in China will no longer be viable and sustainable.

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