Tag Archives: globalization

Will China’s Stock Market Burst?

The Shanghai Composite and the Shenzhen A Share stock markets—China’s two largest stock markets—posted large losses yesterday, capping a week of sharp falls. The two markets were down about 13% each. It marked the worst week in China’s stock markets in more than 7 years. Although they are up year-to-date, the sharp losses this week lent weight to speculation that the bubble in the Chinese markets could soon burst. According to Bloomberg,

Fueled by record margin debt and unprecedented numbers of novice investors, China’s market capitalization has tripled in the past year to $9.8 trillion. At 84 times projected earnings, the average stock on mainland exchanges is now almost twice as expensive as it was when the benchmark Shanghai Composite Index peaked in October 2007.

If the Chinese stock market were to fall, it could have dramatic effects both within and outside China. As much as 80 percent of investment in Chinese markets comes from middle-income Chinese citizens, and a sharp decline in their wealth could spark demands for political change.

What do you think? Is China’s stock market a bubble about to burst? If so, what might the effects be on Chinese politics and the legitimacy of the Chinese government? What international effects might a sharp fall in Chinese markets have? How might it affect China’s international influence? Why

Preventing the Spread of Communicable Disease in an Age of Globalization

Some 30,000 people were quarantined in the Chinese city of Yumen last week after a man was found to have died bubonic plague. Authorities are concerned that he may have come into contact with others and have potentially spread the highly fatal disease. Meanwhile, the ebola outbreak in West Africa continues to spread, having already killed more than 600 people in Sierra Leone, Liberia, Guinea, and most recently in Nigeria. And closer to home, in California, a homeless man who carries a drug-resistant from of tuberculosis is being sought by authorities who want to prevent the disease from being spread.

Preventing the spread of communicable diseases has become increasingly challenging as the international system becomes closer entwined through faster international travel and greater international trade. Globalization facilitates the movement of people and goods, but also of disease. But preventing the spread of diseases globally can be a dramatic challenge, as the massive effort to prevent the spread of SARS in 2002 and 2003 highlighted.

What do you think? How can we work to prevent the spread of deadly diseases like ebola and the plague in the context of globalization? Did the Chinese authorities respond appropriately? Why?

Preventing a Global Pandemic

A polio vaccination clinic in Pakistan.

A polio vaccination clinic in Pakistan.

The World Health Organization (WHO) yesterday warned that the increasing number of cases of polio in Nigeria, Syria, and especially Pakistan, threatened to undermine three decades of effort to eradicate the disease. Polio, which causes paralysis, muscle atrophy, and even death, was one of the most feared diseases of the 19th and 20th centuries. But the discovery of a vaccine against polio in the 1950s, combined with a massive global effort to vaccinate the world’s population against the disease, reduced the scope of the disease from hundreds of thousands to under 1,000 today.  Efforts by the Word Health Organization and various nongovernmental organizations had the world on the verge of eradicating the disease altogether. But a recent upsurge in the number of cases—and the difficulty in vaccinating some populations—has WHO concerned once again.

The biggest concerns center on Afghanistan, Pakistan, and Syria. In Syria, the ability of WHO to address a polio outbreak in the contested region of Deir Ez Zour was undermined by ongoing fighting in the country’s civil war and complicated by the massive dislocation of people caused by the conflict.  In Pakistan, attacks against polio workers, often painted by militants as western spies, undermined the ability of WHO to vaccinate children, especially in the northern parts of the country.

To prevent the spread of the disease outside the country, the World Health Organization has established mandatory immunization checkpoints at Pakistan’s border crossings and airports. Anyone wishing to leave the country will have to provide proof of immunization or be immunized before leaving the country. Similar measures were also put in place in Cameroon and Syria, which are also believed to pose a risk of spreading polio.

What do you think? Can polio still be eradicated by the 2018 goal established in 2013? Why does the number of cases of polio appear to be increasing? How does the spread of polio highlight the complex nature of humanitarian crises in the contemporary era? And what might be done to prevent the disease’s spread?

The End of Globalization?

containershipsAn interesting short video clip from CNN’s Fareed Zakaria GPS asks whether we are witnessing the “end of globalization”?

For much of the last thirty years there has been a steady trend in commerce: global trade has expanded at about twice the pace of the global economy. For example, between 1988 and 2007, global trade grew on average by 6.2 percent a year according to the World Trade Organization. During the same period, the world’s GDP was growing at nearly half that pace: 3.7 percent.

But a strange thing has taken place in the last two years. Growth in global trade has dropped dramatically, to even less than GDP growth. The change leaves one wondering: has the incredible transfer of goods around the world reached some sort of pinnacle? Have we exhausted the drive toward ever-more-globalization?

It’s an interesting question, and likely one without a clear or easy answer. More broadly, I wonder what the end of globalization might even look like? While there is certainly a trend towards the local (just look at all the local food movements), can we envision a world without significantly high levels of global exchange? Just think of all the ways we are connected globally in our daily lives, and ask yourself, what like would look like without all those things?

Globalization and the Jobs Challenge

The popular discourse on globalization is that it results in the export of American jobs overseas. You hear this refrain during campaign season, as politicians promise to “protect American jobs” and to eliminate tax breaks for companies that “export American jobs.”

But like many campaign sound bites, this message misses the complexity of globalization and its impact on jobs in the United States. This video, produced by the New York Times, illustrates the challenge of maintaining jobs in the face of low wage competition from the developing world while simultaneously arguing that globalization results in a shifting of employment, increasing the need for highly skilled employees. It’s a good way to complicate what can sometimes be a tired debate.

[This post was originally blogged at Politics Matters and is reposted here with permission].

Gum Arabic: The Next Conflict Resource?

According to a report by the BBC, ongoing fighting in the Darfur region of South Sudan is being fuelled in part by demand for gum arabic. The BBC notes that more than 60 people have died in fighting for control of an arid region of Darfur between two groups seeking to control an area of pasture and acacia trees from whose sap the gum is made.

Gum arabic is a popular stabilizer used in many soda drinks, gumdrops, marshmallows, M&Ms. It has other non-food uses as well, including in show polish, lickable adhesives on stamps or envelopes, and in various printing processes. Sudan is the world’s leading producers of gum Arabic, accounting for approximately 80 percent of global output. An estimated 5 million Sudanese farmers depend on gum Arabic for their livelihoods.

Interestingly, Sudan’s control of the world’s gum arabic supplies has given it a degree of leverage in global politics. In 1997, when the US Congress was looking to impose sanctions on the Sudanese government for supporting terrorism (and for giving refuge to Osama bin Laden), the beverage industry successfully campaigned to limit the sanctions and exclude trade in gum arabic from the list of embargoed items. As a result, Sudan was largely spared the real impact of the sanctions.

Neither Coca-Cola nor Pepsi will confirm the source of their gum Arabic, though given Sudan’s dominant position in global production it seems unlikely they can avoid sourcing at least some of their supplies from the country.

When people learned that the wars in Sierra Leone, Côte d’Ivoire, Liberia and elsewhere were being funded through “blood diamond” sales,  a campaign was launched to stop the practice. The Kimberly Process, however imperfect, was the result. Then there were conflict resources (think coltan used to make cell phones and other consumer electronics and used to finance the war in the Democratic Republic of the Congo) and later “blood chocolate” in Côte d’Ivoire and Ghana. One wonders when gum Arabic will make the list of conflict resources.

(This story was originally blogged at Global Food Politics and is reprinted here by permission).

Joseph Kony, People Power, and the Inverted Pyramid

Indicted war criminal Joseph Kony is the subject of the viral video "Kony 2012," part of an effort to bring him to justice.

The Kony 2012 video has created enormous buzz on the internet over the past week–first as the video went viral, then as a heated debate ensued about the accuracy, effectiveness, and transparency of the Kony 2012 campaign and its creator, the NGO Invisible Children. Even in Uganda, among the victims of Kony’s LRA, the video has provoked harsh criticism.

Like the Arab Spring (which was driven in part by social media technology like Facebook and Twitter), the Kony 2012 phenomenon relies on this new technology to bypass traditional modes of communication, mobilize large numbers of people, and (the organizers hope) put pressure on very powerful people in top government positions to change their policies.  In fact, the Kony 2012 video claims that in this “new world” of social media and individual empowerment the traditional power pyramid (with a small group of wealthy, powerful elites on top) is becoming inverted.  That is, the masses are finally becoming empowered and claiming their place at the top of the power structure, with the growing ability to bend the elites to their will.  The Kony 2012 creators suggest in the film that these techniques led to President Obama’s decision last October to send 100 U.S. troops to Uganda in pursuit of Kony and his henchmen. 

This empowerment of the individual and the ability to bypass or influence traditional power structures such as state governments, big media outlets, and big corporations is viewed by many political scientists as an important outgrowth of globalization.  But these elite structures are not going quietly, and in places like Syria, Iran, and Egypt, the backlash has been fierce.

What do you think?  Are the creators of the Kony 2012 campaign correct that the power pyramid is becoming inverted, or does a small group of elites really still hold the reins?  If you have watched the Kony 2012 video, do you think the filmmakers’ proposed strategy to capture Kony is going to work, or is it naive?  If the critics are correct that the film stretches the truth and seriously oversimplifies the issues, does this make the effort any less worthwhile?  Is shading the truth justified in the pursuit of a righteous cause?

PIPA, SOPA, and Internet Freedom in a Globalized World

Visitors to Wikipedia on January 18, 2012 found the site temporary blacked out to protest PIPA and SOPA.

If you’ve tried to access Wikipedia today, you’ve noticed the site is blacked out. Visitors are not allowed to access Wikipedia’s vast collection of user-produced encyclopedia entries, but are instead taken to a jarring black screen that says the following:

“Imagine a World Without Free Knowledge. For over a decade, we have spent millions of hours building the largest encyclopedia in human history. Right now, the U.S. Congress is considering legislation that could fatally damage the free and open Internet. For 24 hours, to raise awareness, we are blacking out Wikipedia.” There is a link to “learn more” and a prompt to contact your member of Congress about the legislation.  Google, Reddit, Amazon, and other prominent internet-based companies have also blocked certain features on their sites or placed black “censorship banners” over content in order to protest the legislation.

At issue are two bills working their way through the U.S. Congress: the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA).  As the names imply, they are primarily designed to stop foreign web sites from illegally distributing copyrighted material, such as movies, TV shows, and songs.  Opponents of these steps (whose arguments are summarized here) contend that the legislation gives the U.S. government sweeping powers to censor the internet using tools heretofore employed only by oppressive autocratic regimes.

This controversy reveals the complex tradeoffs between intellectual property rights, freedom of expression, and government power in today’s increasingly globalized world.  Many political scientists have drawn attention to the growing challenges that states face in controlling transnational flows of ideas, goods, diseases, people, and information in a world characterized by greater interdependence and instantaneous communications.  When websites located overseas–beyond the reach of domestic law enforcement instruments–can threaten Americans’ intellectual property rights and by some estimates cost American workers hundreds of thousands of jobs, the U.S. government finds itself in a relatively weak position and must resort to unprecedented steps such as PIPA and SOPA to reassert some authority over the “Wild West” of the 21st-century internet.

What do you think?  Are PIPA and SOPA reasonable steps to attack piracy, or do they unduly threaten the internet freedom of law abiding citizens?  Is there any way for states in the 21st century to control content on the internet without becoming the “Big Brother” that civil libertarians have longed feared?

Internet Freedom in China: The Perils of “Glasnost”

People using the internet at a coffee shop in Beijing.

An article in yesterday’s New York Times reports that China’s government, after a period of liberalization in popular culture, has decided to clamp down on media and internet freedoms once again, imposing “some of the most restrictive measures in years.”  These new restrictions target 34 major satellite television stations (whose entertainment programming and use of audience voting must be curtailed) and the Twitter-like “microblogs” that have become increasingly popular over the past two years.  Sources inside the private companies that manage the microblogs are quoted as saying that “party officials are pressing for increasingly strict and swift censorship of unapproved opinions.”

These microblogs have emerged as a powerful medium for “whistle-blowing” to keep Communist party bureaucrats honest:  “Microbloggers, some of whom have attracted millions of followers, have been exposing scandals and official malfeasance, including an attempted cover-up of a recent high-speed rail accident, with astonishing speed and popularity.”     Despite the social benefits of such activity, the Communist Party clearly recognizes that giving Chinese citizens the freedom to criticize the government and potentially organize opposition movements could threaten their continued rule.

All of this is highly reminiscent of Mikhail Gorbachev’s flirtation with Glasnost (“openness”) during the 1980s in the former Soviet Union.  Gorbachev never intended to destroy Communism; rather, his goal was to strengthen and reinvigorate what had become a stagnant and corrupt system, holding bureaucrats’ feet to the fire by allowing the public to criticize inefficiencies and malfeasance.  However, once the Soviet people had a taste of (limited) freedom, the floodgates opened and their demands could no longer be denied.

Can China escape the fate of the Soviet Union?  (The USSR collapsed in 1991, not long after Gorbachev sought to open up the Soviet system).  Will China’s booming economy–in stark contrast to the USSR’s economic stagnation–allow its leaders to maintain power and contain unrest?  (China’s GDP growth has slowed somewhat, but it still remains over 9%, a very robust figure).  In other words, can economic rewards compensate for a lack of political freedom, and for how long?  Or in an era of rapid globalization, social networking, and the Arab Spring, is any regime’s efforts at centralized control and censorship of ideas doomed to failure?

A Coming Trade War With China?

The U.S. Congress is considering legislation that would retaliate against China for manipulating its currency to the detriment of U.S. jobs.

The United States runs a $273 billion annual trade deficit with China, meaning it imports much more than it exports to the rising Asian power.  The Economic Policy Institute (EPI) recently estimated that this U.S.-China trade deficit cost the U.S. 2.8 million jobs between 2001 and 2010, with all 50 U.S. states affected by job losses in the manufacturing and services sectors.  As EPI notes, “increases in U.S. exports tend to create jobs in the United States, and increases in imports tend to lead to job loss.  Thus, a growing trade deficit signifies growing job loss.”

American leaders have increasingly blamed this trade deficit on China’s unwillingness to “play fair” when it comes to trade by keeping its currency’s value artificially low relative to the dollar.  While a weak currency doesn’t sound like a good thing, it makes a country’s exports cheaper abroad and it makes other countries’ imports more expensive at home.  This means goods and services produced in China are more competitive both in China and abroad, which creates jobs and economic growth in China and harms competing countries’ economic prospects.

In retaliation for China’s currency manipulation, the United States Congress is now considering legislation that would impose tariffs (essentially a tax) on Chinese imports.  China has claimed that such action would violate the rules of the World Trade Organization, which focuses on lowering trade barriers worldwide, but Congressional supporters of the legislation dispute that.  Proponents claim these steps could ultimately create up to 2 million American jobs.  The Senate is in favor of the bill but House leaders have blasted it as “dangerous” and President Obama appears unenthusiastic but noncommittal.  For its part, China has warned that such action could lead to a trade war, which would not be good for America’s economy.  In  New York Times editorial last week noted economist Paul Krugman downplayed the risks of a trade war:

“And the reality of the unemployment disaster is also my answer to those who warn that getting tough with China might unleash a trade war or damage world commercial diplomacy. Those are real risks, although I think they’re exaggerated. But they need to be set against the fact — not the mere possibility — that high unemployment is inflicting tremendous cumulative damage as we speak.”

What do you think?  Should the United States get tough on China for its currency manipulation?  Why is President Obama hesitant to join his fellow Democrats in supporting this legislation?  What will be the economic and political consequences if the U.S. imposes tariffs on Chinese imports?