INTRODUCTION
This chapter aims to explore the origins of the US-China trade war, examining the role of globalization in the emergence of nationalism It will outline the research problems and questions, describe the methodology, and present the theoretical perspectives guiding the study, while also offering an overview of the research conducted.
This research analyzes the relationship between globalization and the rise of nationalism amid trade wars While it may seem that globalization is fading, countries continue to collaborate through bilateral and multilateral trade agreements like NAFTA and the CPTPP Nationalism often emerges when nations face developmental threats, leading them to prioritize their identities as independent states to shield themselves from the adverse effects of globalization, particularly trade deficits The trade conflicts between major powers, especially the US-China trade war, have heightened global awareness of modern political dynamics and could significantly reshape the world order As the global landscape shifts towards multilateralism, finding a secure solution to these issues remains challenging, as highlighted by Stiglitz (2017).
The establishment of a global governance framework, devoid of a centralized global government, enables international institutions to uphold a balanced trading and financial system This is crucial for maintaining openness and regulation, especially in scenarios where the United States may retreat from its global commitments or act in ways that contravene its responsibilities.
Maintaining national interests remains a primary concern for nations, yet globalization fosters interdependence through global sourcing and subcontracting, as noted by Arndt (1997) This interconnectedness is further enhanced by multinational companies (MNCs) engaging in international investments The World Trade Organization (WTO) serves as a champion of international free trade, striving to establish common rules that govern trade among nations.
To ensure a successful future for the WTO, it is essential to embrace globalizationism, where nations prioritize global cooperation and adopt a unified development mechanism This approach highlights the crucial roles of international organizations and their operational effectiveness in fostering collaboration among countries.
The 2016 US Presidential Election marked a significant shift in global dynamics with the election of Donald J Trump as the 45th President, leading to a gradual withdrawal from international commitments established by Barack Obama's administration Trump's "Make America Great Again" slogan underscored his challenge to globalization, as he imposed tariffs on Chinese imports, prompting retaliatory tariffs from China under President Xi Jinping Additionally, Trump targeted American allies, including the European Union, Canada, and Australia, with strong tariffs and threatened to exit the WTO, arguing that globalization and free trade negatively impacted American citizens and the economy.
President Trump’s emphasis on nationalism and criticism of globalization highlight a growing tension between the two ideologies, as nationalism often opposes globalization While it remains uncertain whether the trade war could ultimately undermine globalization, O'Sullivan (2019) suggests that we may be entering a new phase characterized by multipolarity, with major powers like America, the European Union, and China shaping global dynamics In this context, nationalism may lead nations to engage in distinct geopolitical groups, limiting their choices and reinforcing divisions.
In his publication, *The Levelling: What's Next After Globalization*, O'Sullivan (2019) highlighted the decline of globalization due to the emergence of a new form of nationalism His insights sparked my interest in exploring the concept of globalization within the context of the US-China trade war This led me to delve into various global think tanks, where I discovered how globalization is shaped, challenged, and leveraged in the realm of international politics and economics.
In examining the relationship between globalization and the rise of nationalism, I will challenge the prevailing narratives using O’Sullivan's theories (2019) It is crucial to clarify that this analysis will not encompass the global phenomenon of globalization in its entirety Instead, I will focus on the US-China trade war as a case study to address specific questions regarding this complex interplay.
- What are the factors and events during the US-China trade conflict proving whether globalization is going to end or keeps going on?
- How is globalization changing, in response to the rise of nationalism, in the case of US-China trade conflict?
A qualitative research approach is suitable for this thesis as it provides an in-depth examination of the contexts in which globalization is challenged by nationalist policymakers and practices This method also supports the ongoing effort to analyze the effects of the trade war on the representation and transformation of globalization in the current era.
This qualitative research examines the evolution of globalization amid the trade conflicts between the US and China, assessing the potential for global cooperation that arises from these dynamics by analyzing the economic actions of the leaders of both nations.
The contesting of globalization in times of nationalism can be presented in this research, by reflecting on the ideas of the final end of globalization by O’Sullivan
(2019) In his book and some recent interviews, there are different understandings
4 about globalization paradigm in the context of raising nationalism Those opinions are either to contest the presence of globalization, or to prove the continuance of discourse of globalization
This research focuses on the process of crafting national narratives surrounding globalization and nationalism, rather than merely analyzing the trade war and trade agreements It aims to explore whether globalization is significantly jeopardized by the ongoing trade conflict Additionally, the study considers the dynamics of power distribution and the emergence of nationalism in both countries as critical issues that warrant further examination.
This research would not fall in simple tweets and quotes analysis, but to analyze the process of creating discourse of globalization to optimize national benefits
This thesis framework utilizes a case study to analyze a significant political and economic event that impacts both participants and nations engaged in trade with two economic superpowers The research employs content analysis to examine relevant figures from credible sources appropriate for an undergraduate thesis, incorporating a comprehensive literature review and meticulously gathered data from diverse, vetted sources.
This thesis explores the relationship between globalization and the rise of nationalism, examining how globalization influences the world economy and development It highlights the potential significance of understanding globalization, particularly in relation to its impact on national identity and economic processes.
This thesis explores the relationship between nationalism and globalization, highlighting how nationalist acts emerge alongside the rise of nationalism as a parallel movement It proposes a new theoretical framework for understanding the effects of globalization, particularly its role in fostering nationalism Additionally, the analysis of globalization within this case study aims to forecast trends in the global economy amidst ongoing trade wars and their implications for future economic developments.
This study also tries to contribute to an understanding of globalization in a specific case: the trade war between the US and China, the event that can lead to
5 massive changes in the world economy, policies, or even attitude towards globalization
After the Introduction in Chapter 1, Chapter 2 will shorly introduce the groundwork and method of understanding to globalization and nationalism This is the basic understandings I used in this thesis
In Chapter 3, I analyzed the China and US approaches to the Trade War, showing their pathways in globalization in the rise of nationalism
GLOBALIZATION, NATIONALISM AND GLOBALIZATION
Globalization is viewed as a process, while nationalism is often seen as a discourse (Kahler, 2009) Liu & Woo (2018) describe globalization and nationalism as opposing yet parallel processes, introducing the theory of equilibrium regarding states' reactions to diplomatic and political issues The distinction between these concepts can be highlighted through their word formation and suffixes, indicating that globalization is not the direct opposite of nationalism This thesis emphasizes the differences between globalization and nationalism as a means to analyze and interpret the actions of two nations in the context of a trade war.
Globalization and nationalism are often viewed as opposing forces, with globalization representing unity and nationalism symbolizing separation However, this perspective oversimplifies the complex relationship between the two concepts Rather than being in direct conflict, nationalism should be seen as a foundational element that shapes globalization, as it emphasizes the importance of nationhood and prioritizes domestic issues This understanding is crucial, as it reframes the narrative around globalization, suggesting that the rise of nationalism plays a significant role in its evolution.
This chapter establishes the foundational concepts for the thesis by exploring the relationship between globalization and nationalism, while also addressing O’Sullivan's (2019) perspective on the decline of globalization These insights are crucial for understanding the thesis's focus, as it cannot encompass all theories and explanations The primary objective is to illustrate that globalization does not entirely negate nationalism.
Globalization always includes the context that people use to define it There are more than 76 million answers after a quick Google Search, which signals a huge
Globalization encompasses various dimensions, primarily focusing on economic relations, while also influencing technology, political models, and socio-cultural exchanges This research will specifically examine the economic effects of globalization.
Globalization influences the world economy by managing and directing markets, facilitating product supply, and fostering market development from regional to global levels (Arndt, 1997) This process encourages nations to decide on their participation, leading to potential shifts in those willing to engage Inclusion in globalization necessitates that policymakers adapt their countries' development strategies to align with new global standards Conversely, a nation's decision to abstain from globalization reflects a desire to protect domestic industries A notable example is Donald Trump's withdrawal from the Trans-Pacific Partnership (Taylor, 2018), which aimed to safeguard American manufacturers and prioritize US-made products.
The debate surrounding globalization, particularly in the context of the US-China trade war, raises the question of whether it is an unstoppable force or subject to fluctuations (Pryke, 2012) Held and McGrew (2003) highlight the contrasting views of "globalists" and "skeptics," emphasizing the need to analyze globalization from economic, political, and socio-cultural perspectives While skeptics point to potential backlash against globalization, globalists argue that it is a driving force in shaping the world order, with multinational corporations (MNCs) transforming labor divisions, as seen in the BRICS nations, which exemplify the positive impacts of globalization Additionally, globalists contend that globalization can influence the economic strategies of nation-states, particularly as developing countries may adopt a passive stance in their engagement with global markets.
1 New developing countries include Brazil, Russia, Indian, China and South Africa
8 the manufacturing process and technology, so the governments are supposed to be more flexible in navigating their nations to face globalized impacts
Globalization significantly influences world order and lifestyle, raising questions about whether nations are increasingly resisting it It introduces industrialization, liberalism, and mercantilism to developing countries, exemplified by China's robust economic relations globally While China benefits from substantial trade surpluses with the USA and other partners, it maintains restrictions on various international companies to safeguard its national sovereignty.
The debate surrounding globalization often highlights a narrow interpretation equating it with westernization, suggesting that true globalization should evolve beyond this concept (Jacques, 2009) As westernization can no longer be seen as synonymous with globalization, it is essential for globalization to return to its foundational principles Moving forward, globalization must adapt to the changing global landscape and refrain from being solely a Western-centric and industrialized process (Jacques, 2011).
2011) is an important keynote for crafting the ideas for the argument of this thesis
Nationalism is a multifaceted concept that varies across nations, with different interpretations shaped by cultural and historical contexts In Vietnam, it embodies patriotism, national independence, and the unity of its people (Vu, 1996) Conversely, Pryke (2012) defines nationalism in terms of economic and historical transformations, particularly as a form of protectionism that emerged in the early 19th century as a response to globalization, coining the term "economic nationalism." This thesis aligns more closely with Pryke’s perspective on nationalism as an economic phenomenon.
The essential goodness of free trade has been praised as globalizing the world economy, yet nationalism is pursuing militarism, imperialism and economic
In the late 19th century, nationalism stifled free trade, curtailed democracy, and led to conflict (Wolf, 2004) This trend reemerged during the Great Economic Recession of 2009, as the U.S government adopted nationalist and protectionist economic policies (The Economist, 2009) The election of Donald Trump in 2016 epitomized the rise of nationalism in the United States, driven by a focus on protecting American businesses and workers, which ultimately sparked a trade war (Frieden, 2018).
Nationalism, as noted by Wolf (2004), can be viewed as an integral aspect of capitalism, where national identity is prioritized over globalization This perspective emphasizes that nationalism encompasses not only domestic industry and politics but also the global representation of national identity, honoring the homeland and its values (Pryke, 2012) A historical example is Japan's Meiji Restoration in 1868, which aimed to industrialize and compete with Western nations, fostering a national belief in Japan as a powerful, developed country Thus, nationalism serves as a driving force for globalization through westernization and industrialization, demonstrating that economic nationalism and globalization are interconnected and strategically utilized by governments to achieve national objectives In essence, nationalism can be advanced by embracing global strategies for economic growth.
Nationalism holds particular significance in China, functioning as a fundamental principle within its society Chinese nationalism emphasizes the importance of international recognition and respect for the country's national dignity.
The evolution of Chinese nationalism necessitates a critical examination of its distinctions from traditional economic nationalism, particularly in the context of ongoing trade conflicts Babones (2019) highlights the significant 1919 Tiananmen Square protests led by Western-educated Chinese students, who opposed imperialist influences, especially from Japan, and advocated for nation-states as the future framework for governance.
O’Sullivan’s theory: The end of globalization
In his book *The Levelling: What’s Next After Globalization*, O’Sullivan (2019) presents new theories on the decline of globalization, attributing it to the rise of nationalism He suggests that the world is transitioning into a multipolar stage, characterized by a new world order shaped by three key areas: America, the European Union, and centric-China As a result, nations are increasingly prioritizing domestic and regional issues over international concerns.
O’Sullivan (2019) predicts a shift towards a non-globalized world, emphasizing the importance of fair financial systems alongside the need for infrastructure and public goods Globalization has alleviated pricing pressures for nations, enabling governments and firms to address financial challenges through bond sales and international loans (Bown & McCulloch, 2009) However, this reliance on international finance could signal the decline of globalization, as an increasingly financialized market may lead to imbalances in money flow.
We may witness no visible issues when the economic growth is stable, but can be a huge constrain when the economy is slowing down (O'Sullivan, 2019)
THE TRADE WAR IN A GLOBALIZED WORLD
US and China seem, or at least seemed, to be in a huge boat together When the
US is a huge consumer, China, in reverse, is a nation of manufacturing According to the US President’s Trade Representative (2018), China is the leading exporter to the
In 2022, the United States recorded a substantial goods trade deficit with China, amounting to $419.2 billion, contributing to a total trade deficit of $539.5 billion Despite this significant deficit, China ranked third among the largest export markets for the US, with exports to China representing only 7.2% of total US exports.
Globalization has significantly transformed the global economy, particularly between the United States and China This process has positioned the US as a major importer while elevating China to the status of a leading exporter and superpower, surpassing Japan to become the second-largest economy in the world (Mohanan, 2011) Predictions indicate that by 2020, China's economy may surpass the US in terms of purchasing power parity (PPP), and by 2030, India is expected to exceed the US economy, driven by its emergence as a key manufacturing hub (Johnson, 2019).
Globalization, intended to foster free trade and mutual benefits among nations, has led to unequal profit distribution, with some countries reaping more rewards than others Economic globalization should ideally enhance national economies through fair trade and provide consumers with competitively priced products In this landscape, China has emerged as a pivotal player in the global supply chain, positioning itself as the world's primary manufacturer by striving to produce a vast array of goods for global consumption Consequently, countries like the USA have shifted towards a consumptive role, with American companies seeking profits from China's burgeoning middle class (Zarroli, 2019).
This chapter analyzes the solidity of the global market and supply chains, highlighting the ongoing collaborations between nations as a key aspect of globalization Additionally, it provides a descriptive portrayal of how the governments of two superpowers manage their economies.
China in the Force of globalization
The previous chapter highlighted the necessity of cooperation in the context of globalization, as suggested by O’Sullivan (2019), who views globalization as a cornerstone of an interconnected world This ongoing debate about the pros and cons of globalization has intensified, particularly with the emergence of trade wars that question its relevance amidst rising nationalism and the struggle between economic growth and national independence During Trump's presidency, his condemnation of China for its perceived negative impact on the US economy sparked significant conflicts, which were further exacerbated by nationalist actions from the Chinese government in response to these tensions.
The ongoing trade war between the United States and China presents numerous significant incidents that highlight its impact on both economies This analysis focuses on Huawei as a case study to explore how the Chinese government supports domestic brands while the U.S government imposes restrictions on this tech giant Additionally, the treatment of well-known American brands operating in China will be examined to illustrate the disparities between domestic and foreign companies The "tariff attack" initiated by President Trump will also be assessed to evaluate the effects on American businesses during this conflict Ultimately, this discussion aims to underscore the persistence of globalization and the interdependence of the two nations amid the trade war.
Huawei and “Made in China 2025”
Huawei, founded in 1987 by former Chinese People's Army officer Ren Zhengfei, has evolved from a small manufacturing company in Shenzhen, Guangdong Province, to a global leader in technology infrastructure and smart devices With a presence in over 170 countries and a workforce exceeding 180,000, Huawei's mission is to "build a fully connected, intelligent world."
2 This word refers to the prevention of Trump’s government against Huawei, when there was a ban declared and then an extension to not execute the ban
With 14 employees and an impressive USD 103 billion in sales, the company stands as a leading smart device manufacturer in mainland China and the second largest phone maker globally, following Samsung Notably, it is also the world's largest supplier of telecommunication devices, boasting a market value of USD 92.55 billion, which is significantly higher than that of its closest competitor.
Huawei, once poised for growth with the rise of 5G technology, now faces significant challenges due to U.S government restrictions During Trump's presidency, Huawei encountered increasing pressure, reminiscent of the struggles faced by ZTE, another Chinese tech giant that was banned from collaborating with U.S companies, nearly leading to its collapse While both companies share a similar fate, the circumstances surrounding Huawei's situation differ significantly from ZTE's, highlighting the distinct policies employed by the Trump administration in addressing these two technology firms.
Since China's economic reform in 1976, companies like Huawei and ZTE have thrived in a globalized market, contributing to the remarkable rise of the nation The World Bank (2020) highlights that China's annual GDP growth has often outpaced that of the USA, doubling it in many instances since 1978.
Globalization has enabled China to integrate into the global market, positioning itself as a hub for foreign companies and a leading manufacturer for products worldwide Historically, Western nations advanced through manufacturing and industrialization, a path that China has successfully emulated by becoming a key supplier A unique aspect of Chinese management is the government's requirement for multinational corporations (MNCs) to partner with local firms when establishing new production lines in the country.
3 Retrieved from Huawei Technologies USA on April 1 st , 2020 at https://www.huawei.com/us/about- huawei/corporate-information
Foreign companies can choose their business structures in China, ranging from Wholly Foreign Owned Entities (WFOEs) to Joint Ventures (JVs), based on capital contributions from local and foreign partners (Frankenfield, 2019) This framework not only protects foreign investments but also facilitates access to China's vast market of over 1.4 billion consumers and an advanced logistics system, surpassing that of India and Southeast Asia (Rapoza, 2019) However, challenges related to intellectual property (IP) rights persist due to factors like miscommunication, differing management styles, and cultural differences (Kaufmann, 2017) Despite these concerns, many multinational corporations (MNCs) continue to see China as an attractive destination, driven by the potential benefits and a growing middle class of approximately 400 million people (Zhou X., 2018).
China's recent legislative changes have not only facilitated the entry of foreign companies but have also led to the rapid growth of domestic businesses, particularly in critical sectors known as "key areas." In these sectors, foreign firms must collaborate with local companies under legally established frameworks By prioritizing science and technology, especially in telecommunications, China is swiftly advancing its capabilities and competitiveness in the global market.
In China, technology transfer frequently occurs through Forced Technology Transfer (FTT), where companies must share their technology in exchange for access to the market (Frankenfield, 2019).
China's manufacturing focus is driven by six key areas outlined in a checklist of ten fields: new information technology, advanced numerically controlled machine tools and robots, aerospace equipment, ocean engineering and high-end vessels, high-end rail transportation equipment, energy-efficient and new energy vehicles, electrical equipment, agricultural machinery, innovative materials, and biomedicine along with high-end medical devices.