China and the new world order

A new world order in the making

Is a new world order in the making? The answer: yes. Up to now, only about 20 per cent of the world's people have attained solid development, growth, and modernity. Now the rest are catching up at an unprecedented speed. This sudden surge in so many late developers suggests a brave new world in the making.

Several key changes

Huge changes are happening, within a vastly expanded sphere for all people and nations. We can identify four in particular.

First, wealth making through industrialisation and commercialisation has become a universal thing. For a long time, products made in the United Kingdom, the United States, and Germany dominated global markets. Today, products made in China, Mexico, Vietnam, and Indonesia, among other developing nations, are increasingly flooding the world, changing the global production map again.

Behind this changing map, interestingly, many poor nations have rapidly taken on active roles in the global economy. Their biggest weapon remains low-cost labor, which provides a working platform for co-operation and sharing between the rich and poor nations.

Today, most developing nations are extremely limited in resources and strengths. Hence, for them, this cost gap is a survival gap. In fact, other than cheap labor and hard work, they have few advantages. However, it turns out that low labor cost and hard work do make a difference.

For now, manufacturing activities, especially in the low end of the value chains, increasingly shift to the poor nations, while the developed nations focus more and more on a service and high-tech-oriented economy. This giant change, though only beginning, will impact the future world economy even more.

Second, all regional markets are connected to each other. Interdependence is opening up the old national boundaries dramatically. Most profoundly, the flows of capital, technology, goods, and people have reached a new level. Moving from survival of the fittest to rational collaboration and sharing, life on the earth will never be the same again.

Third, wealth making has gained a record-high status. Consequently, old ideology is lost to the new economic waves. This is a truly golden age for capitalists anywhere, who can reach all corners of the world for the first time in human history.

Multinationals are gaining unprecedented power in shaping global life. Their share of trade approaches 50 per cent and is still on the rise. Actually, they are warmly courted by all nations, rich or poor. Courting them has become a high art for all governments. The new picture is this: incentives move the world: not politics, not ideology, not empty words.

Fourth, hundreds of millions of ordinary people everywhere have joined the entrepreneurial army. Starting a business is no longer for the privileged few as in the past, especially in the developing nations. Furthermore, individual private initiatives are undermining state domination especially in many less developed nations. This is hugely significant especially given that traditional bureaucratic powers in many developing nations have been strong and abusive.

Above all, such changes have happened within a short time, which is possible only in an increasingly globalised world. Naturally, more consequences will follow.

Interdependence and beyond

The sudden surge in late developers is bound to create ripple effects. Since well over 5 billion people are involved, development in these countries will be much more influential than ever before.