Colonial angst
From here in the centre of East Asia, globalisation looks wonderful. The number of people living on less than US$2 a day has more than halved in the past 20 years; life expectancies are fast catching up to developed-world levels; infant mortality rates have fallen in every nation; there is more democracy than ever before; and women have won a vast degree of social and political power.
We have the governments and companies of the United States and Europe to thank. Their free-trade policies have generally brought industrialisation, jobs, lower prices and a higher standard of living. In return, they have gained political and cultural influence, vast financial returns and cheaper goods.
Globalisation has not spread evenly throughout the region, and gaps between the haves and have-nots are widening. But the two-way flow of goods, services, ideas, technology and people between developed and developing countries is working so well that only a fool would want to turn off the globalisation tap.
That, at least, is my view from Hong Kong. In the US and Europe, where, in the 1970s through to the 1990s, so many people thought globalisation was such a great idea, increasing numbers are now having doubts. As they watch the economic rise and growing influence of China and India, they wonder whether the process has gone just a little too far.
Mark Thirlwell, an economics expert with the Lowy Institute for International Policy in Sydney, examines the changing attitudes in his just-released book, Second Thoughts on Globalisation. He points out the irony that western policy-makers, who were so long preaching to developing nations that the way to get rich was to integrate with the global economy, are now nervous about how matters are playing out.
The protectionist trade barriers being threatened fly in the face of the rules of fair play, negotiated through international agreements that eliminated or reduced trade tariffs and capital controls, and introduced subsidies, lower transport costs and free-trade zones. Western companies can buy firms in developing nations, but there is angst when Chinese oil companies try to take over American ones, or Indian steel firms buy European counterparts.
Elections in the US next year are ramping up the strains. Opposition Democrats claim that 1.8 million American jobs have been lost to China and India, while the ever-growing trade surplus and alleged undervaluation of the yuan are already campaign issues.
Democrats want labour and environmental standards to be part of free-trade agreements. A full-blown trade dispute between China and the US looms, with senators on Wednesday introducing legislation that will treat exchange-rate rows as unfair export subsidies, taking them to the World Trade Organisation for adjudication. Europe is not far behind, with efforts to rewrite the rules also well under way.
Mr Thirlwell doubts that old-fashioned protectionism will return, although he believes there will be increasing pressure to change the way the rules work. While some efforts will be a genuine rethinking of the way the global economy works, 'clearly some will be an attempt to get protectionist measures through the back door', he predicts.
Such moves are dangerous. They are causing a 'them-and-us' mentality that risks a cold-war-like atmosphere of suspicion and militarism.
For those who believe that history repeats itself, the collapse of the first era of globalisation in the 19th century serves as a poignant reminder: it began unravelling with the first world war and was declared dead with the crisis over the gold standard - also known as the Great Depression - in the late 1920s and early 1930s. Another world war followed shortly after.
Success in China and India does not come at the expense of the US and Europe. The benefits of the improved living standards in these and other nations, flow directly back through trade, tourism, and services - as they should, in a truly global economy.
Lawmakers and trade negotiators trying to turn back the clock and make a lie of decades of rhetoric and hard work need to put their colonial thoughts where they belong: in the past.
Peter Kammerer is the Post's foreign editor
