Robert Guest - A Dispatch from the US-China Trade War

Article by Robert Guest: Foreign Editor, The Economist, created exclusively for Premiere Speakers Bureau.


 

When I was an intern at a Japanese software firm in Tokyo in the early 1990s, I did not have a mobile phone—they were far too expensive. But the company made me pose with one for photos in a marketing brochure. It wanted to give the impression that it was global, though, in fact, I was the only non-Japanese employee. And it wanted to appear sophisticated—look, even our most junior staff carry mobile phones!

 

In those days, a brick-sized phone that could only make voice calls was a status symbol even in a rich country like Japan. Today, street hawkers in the poorest countries in the world have much better ones. I’ve seen refugees in South Sudan use apps to find safety, trace missing relatives—and watch dumb YouTube clips when they are bored.

 

No one now thinks it odd that practically penniless goat farmers in African war zones have smartphones. But when you think about it, it is incredible. Within a single generation, a luxury for the rich has become commonplace among the poor. For this, we can thank globalization.

 

Between the end of the cold war and the financial crisis of 2008, the world opened up. Barriers to the flow of goods, money, and ideas fell. Supply chains stretched around the globe, as multinationals sought the best suppliers of every component, no matter where they were located. Apple buys parts from 43 countries. And, since its suppliers also have their own suppliers, an iPhone today contains inputs from many more places than that.

 

Thanks partly to globalization, products have grown better, humankind has grown richer and global poverty has more than halved.

 

However, lots of people think being open to the rest of the world was a mistake. In Britain, such people voted for Brexit. In the United States, they voted for Donald Trump or Bernie Sanders. In China, they can’t vote but they can boycott Starbucks.

 

Voters have soured on open trade because the disruption it causes is highly visible, for example when a local factory closes because of foreign competition. The gains—constant improvements in efficiency and the spread of technology—happen incrementally and largely unnoticed.

 

Since 2010 the cross-border flows of trade, direct investment, and bank loans have fallen or stagnated as a share of the world economy. At The Economist, where I am the foreign editor, we call it “slowbalisation” (a phrase we borrowed from a Dutch writer).

 

Tariffs are creeping up. A new mood of confrontation has gripped the global economy. America and China accuse each other’s tech firms of posing a security threat and restrict their operations. President Trump keeps threatening to escalate the trade war, for example, by promising to hike tariffs to stratospheric levels if China does not change its state-driven economic model, or if Mexico does not stop Guatemalan migrants from reaching the United States.

 

Firms in many industries are now afraid that long supply chains may carry excessive political risks. Countries are retreating into regional blocks. Russia and China are clubbing together to figure out how to counter what they see as a new and heightened menace from America.

 

We are probably not looking at a return to the 1930s when the raising of trade barriers exacerbated the Great Depression. Some aspects of globalization, such as the cross-border flow of data, continue to expand very quickly.

 

But there is good cause to worry. A less open global economy will not grow as quickly. Poor countries will find it harder to catch up with rich ones. Good ideas will not spread so swiftly. I don’t want to exaggerate the likely damage. Technology will still advance, bringing longer lifespans, helpful robots and Chinese cities designed from scratch to accommodate driverless cars. But the pace of change matters, and I fear that many current policies will slow it down—for example, the increasing difficulty that foreign students have in getting visas to study in America or Britain.

 

As a journalist, I campaign tirelessly for open-ness. After a quarter-century of reporting from around the world, visiting more than 90 countries, I have seen first-hand the extraordinary power of free trade to make people better off. (I’ve also seen the destructive effects, and have often argued that we should help those left behind.)

 

When talking to corporate audiences, I explore the ways that trade wars might affect whichever industry and whichever part of the world they want to hear about. I try to explain how palace intrigue in Saudi Arabia might affect farmers in India, or how Chinese nationalism might affect European airlines, or how other countries might react to Trumponomics.

 

I don’t have all the answers, but I never stop asking questions, and I’m happy to share the insights I gain from talking to politicians, CEOs and street hawkers all around the world. These are uncertain times. We won’t be able to navigate them if we don’t pay attention.


 

Visit Robert Guest's page at PremiereSpeakers.com for videos, speech topics, his biography, and more.  Robert Guest is the author of Borderless Economics: Chinese Sea Turtles, Indian Fridges, and the New Fruits of Global Capitalism (order here).

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Robert Guest - A Dispatch from the US-China Trade War
Robert Guest
Robert Guest
June 13, 2019
Article byRobert Guest:Foreign Editor, The Economist, ...
Robert Guest - A Dispatch from the US-China Trade War
Article byRobert Guest:Foreign Editor, The Economist, created exclusively for Premiere Speakers Bureau. When I was an intern at a Japanese software firm in Tokyo in the early 1990s, I did not have a mobile phone-they were far too expensive. But the company made me pose with one for photos in a marketing brochure. It wanted to give the i...
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