Impact Of Covid-19 Pandemic On Economic Globalization

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Author: Future Manager Research Center

Global supply chains are an important force supporting economic globalization. The large and complex supply chain network that connects countless manufacturing and service companies around the world has spurred the world economy into an interdependent and integrated organic whole, but it has also increased the vulnerability of the global economy.

In a highly dependent global economic system, any economy, especially an economy that is a key link in the global supply chain, temporarily suspends production or restricts trade, which will bring external shocks to other economies that cannot be underestimated.

The coronavirus pandemic is a global health crisis, and likewise, it is hurting the global economy established through the supply chain. After the outbreak, from cars to smartphones, from retails to tourism, from aviation services, financial services to technical services … Production has been forced to slow down or even be suspended, which has exposed the extreme vulnerability of the global supply chain, increasing panic and breeding new accusations of economic globalization. In the United States, some people even blamed the emergence of the N95 medical mask shortage for globalization, pointing directly at the de-industrialization of the US economy and the migration of production capacity to Southeast Asian countries. No matter how much economic losses are ultimately caused, the chaos caused by the coronavirus has exposed the uncertain costs that a country will bear in an interconnected global economy.

This disturbing situation has led more people to debate the pros and cons of globalization, believing that globalization exposes everyone to bigger risks, and we lack international institutions and resources to effectively prevent and respond to those risks.

Dissatisfaction with globalization caused by rising risks is not the first time in human history, and certainly not the last. Every rise of the risk will cause people to debate whether to continue this “partnership” or dissolve the “cooperation”.

For some countries , the best way to avoid the virus outbreak is to close the door to spreaders, to achieve self-sufficiency in food and medicine at home, to guard against international travellers and immigrants, in a word, mind your own businesses. This is what Pardis Sabeti and Lara Salahi call the “outbreak culture” in their work on the Ebola crisis. The culture of “split” spawned by the epidemic will erode willingness to cooperate and work together.

In response to the pandemic, the isolation of each country is important, but it is more important to share information and resources globally and jointly develop new medicines and vaccines. Because in a highly connected world, the ability to resist risks must be enhanced across the entire system, which depends on “the shortest board on the barrel”. The epidemic poses a serious threat to the world economy and human health. What is urgently needed is the willingness and action to cooperate.