The IMF said in its latest staff report that after decades of increasing global economic integration, the world is facing the risk of fragmentation, which could reduce global economic output by up to 7 percent. And with the addition of technological "decoupling," the loss in output could reach 8 to 12 percent in some countries, it warned.
In addition to the COVID-19 pandemic, high inflation, geopolitical conflict, and regional economic uncertainty, among others, the IMF report actually points to one of the biggest worries for the global economy in 2023. At a time when the US push for the technological "decoupling" and abnormal transfer of industrial chains is "killing" globalization, it seems that fragmentation of the global supply chains and trade has become an inevitable trend, which is bound to seriously affect the global economic recovery.
The US is to blame for the current anti-globalization trend of the global economy. Over the years, the US has been trying to promote the returning of manufacturing jobs through various policies. During the process, these policies are gradually deviating from the principles and rules of free trade time and again as Washington increasingly doesn't care whether it hurts the interests of the rest of the world, such as requiring TSMC and South Korean chipmakers to shift production to the US.
For example, at the "relocation ceremony" of TSMC's first plant in Arizona last month, TSMC founder Morris Chang said that globalization and free trade are "almost dead," while US President Joe Biden claimed "American manufacturing is back" in his speech. This is perhaps the perfect manifestation of the US' disdain for globalization.
Against this backdrop, there is an increasing tendency that factors determining global industrial chains and resource allocation are politicized, deviating from economic considerations. Some countries have a strong desire to strengthen their domestic industries and become wary of international cooperation, which may be the biggest crisis to globalization.
By distorting and politicizing industrial policy, the US may be able to see a certain degree of manufacturing recovery in the short term, but in the long run, it will lead to a significant increase in the costs, creating unnecessary chaos in the global industrial chain.
Moreover, with the excuse of improving the so-called supply chain security and resilience, the US has been seeking to isolate China from global supply chains, which is another important reason for the growing trend of industrial fragmentation. In the semiconductor sector, for example, the US has been hamstringing China with export bans for years, and it announced in October escalated measures to cut China off from certain semiconductor chips made anywhere in the world with US equipment. The US is also reportedly in discussions with Japan, the Netherlands and South Korea over restricting semiconductor exports to China.
The move affects not only China, but also the global semiconductor industrial chain, shattering the traditional consensus on the global division of labor that has developed over the past few decades. Everyone is a loser in the US-led "decoupling" drive, including American companies. The third quarter of last year alone saw more than $1.5 trillion wiped from the combined market value of American-listed chip businesses, according to an Economist report.
Indeed, the US is pursuing its global strategy aimed at containing China not just in the semiconductor sector, but also in such industries as photovoltaic and electric cars. By adopting various legislations targeting China, it has tried to wean its economy off or reduce its reliance on Chinese supply chains, so as to undermine China's economic momentum.
Yet, China's industrial chain and supply chain is an inseparable part of the world, also an important driving force of the global economy. It is widely expected that China's economic recovery will become a major source of optimism for the global economy in 2023. Washington's attempt to construct a global supply chain that excludes China and to contain China's rise will cause disruption to this chain and will have a major impact on the global economy and globalization, which is obviously not in line with the interests of most countries in the world, including the US. Global economic recovery needs China's supply chain. There is no substitute. If the US continues on the path of industrial fragmentation, it will be the number one obstructer of the global economic recovery.
Russian Foreign Ministry spokeswoman Maria Zakharova earlier said that the treaty provides for various forms of bilateral cooperation.
The comprehensive strategic partnership agreement between Russia and Iran has entered into force, Iranian Ambassador to Russia Kazem Jalali told Sputnik.
"It is already binding," Jalali said when asked about the date of entry into force of the agreement, as well as whether Iran had notified Russia of the completion of internal procedures.
He recalled that the treaty was ratified by both chambers of the Russian parliament, and Russian President Vladimir Putin signed it. At the same time, the document was ratified by the Iranian parliament, approved by the Guardian Council, and the president issued it as a law.
"Therefore, in both countries it currently has the form of a law and, naturally, has entered into force," Jalali said.
On January 17, Putin and his Iranian counterpart, Masoud Pezeshkian, met in Moscow to sign the Comprehensive Strategic ...
Defying the United States threats, ministers from more than 30 nations have packed Bogotá’s San Carlos Palace to charge the Israeli regime with genocide over its October 2023-present brutal military assault against the Gaza Strip.
The dramatic display of international solidarity saw dozens of high-ranking officials from across the globe convene inside the stately palace on Tuesday, determined to hold the regime accountable for, what they unequivocally called, a “war of genocide.”
The two-day emergency summit, organized under the auspices of The Hague Group -- a coalition co-chaired by Colombia and South Africa -- had representatives, ranging from such countries as Algeria and Brazil to Pakistan and Spain, in attendance.
The participants described the drive as a coordinated effort to stop the Israeli atrocities.
Behind closed doors, ministers and envoys, meanwhile, engaged in intensive sessions aimed at drafting collective measures to pressure the regime -- steps expected to be unveiled by ...
