The Transition From Globalization to Nationalism; United States and China in the Post-COVID World Order-19

The Covid-19 epidemic has intensified debates over the dominant theoretical paradigm of international relations about the fundamental change in the world economic order. The liberal view predicts the continuation of economic globalization after the epidemic. The dominant current of realism expects nationalism instead of globalization, given the negative structural consequences of this epidemic on the global economy. Therefore, this study seeks to answer the question of what effect Covid-19 can have on the process of global economic order? The method of this research is descriptive-analytical and statistical analysis, library studies and documents have been used to answer the main question. The research hypothesis is that economic globalization has been in transition since the 2008 financial crisis, and one important but non-exclusive factor in explaining this change is the evolving economic relationship between the United States and China, which has shifted from coexistence to increasing competitiveness. Economic reconstruction in the United States and China has begun since the 2008 crisis and accelerated since the start of the Trade War and the Covid-19.

Introduction

While globalization and its various dimensions have challenged the Westphalian system and the traditional concepts of sovereignty resulting from it, the COVID-19 pandemic has intensified the debates on the dominant movement and the main theoretical paradigm of international relations concerning the fundamental change in the world economic order. The liberal perspective predicts that economic globalization will continue in the post-Covid-19 era. Taking into account the negative structural outcomes of the pandemic on the international economy, the dominant realism movement expects nationalism to come to the forefront instead of globalization. Consequently, the present research intended to answer this question: What effects can COVID-19 have on the world economic order that is being formed? It used the descriptive analytical method, analysis of the data, library resources, and documentary studies to answer the question. The research hypothesis is that economic globalization has been going through a transition since the financial crisis in 2008, and one of the important factors for explaining this transition is the change in US-China economic relations from coexistence to increasing competitiveness. Economic restructuring started in the US and China after they got out of the crisis in 2008 and accelerated since the trade war and COVID-19 began. The findings of this research indicate that the post-COVID-19 world will be characterized by intensification of nationalistic competitions between countries over recovering economic power and political influence.      

Theoretical Framework

From a realist point of view, the basic principles of international politics never change. The international order is always essentially a struggle for power among governments for their own interests. Since there is no single realist theory, the various branches of realism rely on different independent variables. Classical realists such as Has Morgenthau believe that permanent conflicts have their roots in the inherently selfish nature of humans and turn into the behavior of competitive governments. Neo-realists including Kenneth Waltz focus on a competitive international system that is inherently without the authority of central organization and monopolizes power to manage the inter-government relations and protect countries from each other. In this anarchical international system, governments are the main actors that use self-help strategies for their survival and, depending on the related neorealism branch, for maximization of their power or security. Due to the inevitable asymmetric power distribution, the anarchical conditions in the international system may force weaker states to either balance their relations with the more powerful countries or to go along with them. Neoclassical realists connect the systemic assumptions of neorealism to the domestic factors, such as domestic institutions, state-society relations and the leadership perception, that facilitate or limit foreign policy. The liberal theory highlights the need for cooperation by emphasizing mutual dependence, transnationalism and growth of international institutions and democracy. Liberalists argue that, when the fates of states are intertwined, they must cooperate or pay a very high price. For example, the international economy is a complex trade, financial and production network that prioritizes cooperation. From this perspective, states must cooperate to prevent the epidemics that affect the entire world and impose heavy costs on all societies. The states must share their knowledge and material resources to cope with scourges that harm them all. They will certainly do this; in short, this pattern optimistically emphasizes that COVID-19 will not destroy globalization. This general pattern of elements and their interactions thus form the structure of the liberal political system and hence whenever one or several of these elements confront instability the system that they have built weakens. Some believe now that the corona crisis is an effective factor in weakening these elements. Accordingly, the relatively low levels of mutual dependence in the midst of COVID-19 prevalence did not lead to high levels of cooperation because it would be accompanied by threats to national survival.            

Methodology

This was a descriptive and analytical study that used data analysis, library resources and documentary studies to answer the main research question.

Results and Discussion

COVID-19, which is called the third crisis of the third millennium in extent and depth after the September 11 attacks and the 2008 economic crisis, caused major changes in global politics and world economy and influenced the world order in addition to challenging the efficiency, competency and eligibility of states. Although COVID-19 seems to be a health crisis at first glance, its geopolitical effects cannot be ignored. COVID-19 pandemic has had particularly substantial effects on two arenas of life on earth: world economy and security, the main manifestation of which will be the shaping up of the future world order. Consequently, COVID-19 astonishingly pulled the brake on global economic growth. In this regard, the present research has two key findings. The first one is economic globalization that has been in transition since the financial crisis in 2008 and one of the important factors that explain this transition is the changing US-China economic relations, which have shifted from coexistence to increasing competitiveness. In fact, the economic restructuring in the US and China started after they went through the crisis in 2008 and with the beginning of the trade war and COVID-19. The second one is that a better understanding of nationalism and regionalism has been achieved in the vacuum caused by the declining globalization through the long term effects of COVID-19 on the world economic system      

Conclusions & Suggestions

This article argued that the world economy experienced a U-shaped improvement after the 2008 crisis, and some basic changes occurred in the nature of economic globalization during the past decade. The expression "slowing down" is quite accurately describes the new economic globalization, and the change in US-China economic relations from coexistence to increasing competitiveness is one of the important factors for describing this change. More importantly, by studying the different forms of production and trade activities during the past decade, the article showed that nationalism and regionalism filled the vacuum of economic globalization during the past decade, and we are now accepting an emerging multipolar world being dominated by at least three large areas: North America, Europe and China-centered Asia. The article confirms this and suggests that the US-China tariff war and COVID-19 pandemic are not the beginning but the accelerator or catalyst of this more general trend. It offers a more accurate study of economic globalization during the past two decades and an outlook for understanding the effects of the US-China tariff war and COVID-19 pandemic on the world economic order. Finally, in order to study more specifically how regionalization has evolved during the past several years, we must differentiate the various networks of value chain production into the three types of the domestic, the regional and the global value chains. In general, the more regional the value chain is, the higher the level of economic integration into the global economy will be. We can then calculate more accurately the relative importance of nationalism by measuring and comparing the shares of the domestic, regional and global value chains based on the World Input Database.