Asia

Escalating inter-Korean tensions might turn the Korean Peninsula into another international security flashpoint and a possible breaking point for global stability.

Welcome to “Women Around the World: This Week,” a series that highlights noteworthy news related to women and U.S. foreign policy. This week’s post covers December 2 to December 8.

Modi’s prime ministerial pet project to expand Internet connectivity to rural India is more of an election campaign tool than a substantive effort to improve technological connectivity in rural India.

Few former colonies officially press perpetrator states to redress past injustices, largely due to divergent narrative within victim states about how to view past colonial history.

On November 1, 2023, the Council on Foreign Relations’ program on U.S.-Korea Policy held a virtual workshop on U.S.-South Korea policy coordination toward China on advanced technology.

Myanmar’s military is losing its grip on power—the United States and its partners should prepare for potential state collapse.

Governments have increasingly employed extrajudicial assassinations to target dissidents.

Welcome to “Women Around the World: This Week,” a series that highlights noteworthy news related to women and U.S. foreign policy. This week’s post covers November 25 to December 1.

UK, South Korea warn of North Korean hacking; UK, U.S. release AI guidelines; Google DeepMind publishes materials design paper; Okta says October breach larger than previously known; CISA warns of attacks on water utilities.

Decoupling and derisking, deglobalization, slowbalization, and localization. Journalists, columnists, and more than a few authors are touting the end of an era of hyperglobalization characterized by open markets and capital flows, of seamless transport and ever-rising trade across the world. Policymakers and CEOs caution that this fragmentation of the global economy is slowing innovation, boosting inflation, and leaving workers, shoppers, and citizens worse off. Yet these takes largely miss the biggest international economic story of the last five decades. More than globalizing, the world economy was regionalizing. That means the starting point for today’s shifts in international supply chains is distinct from most conventional takes. And these views tend to overstate the ability of government policies to disentangle international commerce. Even in the face of hostile geopolitics and industrial policy and protections, the factors that drove regionalization in recent decades will remain powerful and profitable. True globalization may not be in our future, but regionalization still is. Much is being made of the recent downturn in trade, with international exchanges falling over 3 percent over the last twelve months. Yes, trade is slowing down, and no longer outpacing global growth. But this is off of record highs. And looking over the last forty years, trade has steadily grown in volume and importance to the global economy, now comprising a significant majority of all economic activity. To be sure, production and trade are shifting as international supply chains reconfigure themselves. The biggest shift has been from China, which has pulled back as the main engine of global commerce. Trade as part of the Chinese economy has fallen from a high of 64 percent of the GDP in 2006 to just 37 percent today. China’s pullback explains in part why global trade growth has slowed. Yet it has also opened opportunities for other nations to step in. And many have. Vietnam, Thailand, Korea, India, Mexico, Poland, and the Czech Republic are among those that have boosted exports in real terms. None of these rising trading nations will make the singular splash that China’s entry into the world’s economy did at the turn of the 21st century. For most, their populations and markets are smaller, so they won’t individually impact global flows as significantly. India, the most obvious contender to replace China given its size and global ambitions, has yet to be able to get beyond its bureaucracy, limited infrastructure, and inherent protectionism. And for any nation aspiring to fill the trading gap being left by China, the market-led opening of the 1990s and 2000s, often dubbed the Washington Consensus, has given way to one increasingly guided by governments and public policies. The path China took to manufacturing dominance is no longer as clear or open in the 2020s. Still, collectively this host of countries can be as significant for global flows, ensuring that deglobalization, just like globalization, remains a myth. These new trading paths will lean regional. Many of the winners in Southeast Asia are rejiggering supply chains around the region, bolstered by the Regional Comprehensive Economic Partnership, or RCEP, which lowered tariffs and cut out paperwork for inputs and finished goods moving between its fifteen members. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) helps its five Asian members as well by making it more efficient and profitable to trade with each other compared to those outside the club. Mexico’s trade growth also reflects deepening regional ties particularly with the United States through the USMCA, which replaced NAFTA in 2020. What companies are finding is that internationalization still makes sense for costs, talent, and profits. Governments will find that national security strengthening, supply chain resilience, and economic competitiveness also benefit from a geographic spread. But as we are seeing, it is shifting directions from that of the last forty years. Geopolitics and industrial policy matter. And regionalization looks to be that Goldilocks middle that will enable governments to protect growing national security concerns, boosting supply chain resilience and allowing companies to thrive.