World has entered era of ‘limited globalization’

The COVID-19 epidemic is changing the trajectory of industrial development in various countries to varying degrees.

Trade frictions between some countries are deepening, reform of the World Trade Organization and other multilateral economic and trade mechanisms is stagnating, and the direction of globalization is undergoing profound changes.

The era of globalization that began in the 1980s is now over, and a new era of limited globalization has begun.

It is important to think about how to transform China’s industrial policy to assist the national economy overcome internal and external challenges, and achieve sustainable development.

There is no standard answer to what industrial policy should be adopted. For industrial policy researchers and policymakers all over the world, the core question has always been how to deal with the relationship between the market and government in different industries.

There is no single answer to this question and no unified practice around the world.

For a large developing country such as China, the external uncertainties are far more complex than the theoretical models described in textbooks. The country needs to evaluate the international environment and major changes in the industrial policy of the world’s leading economies.

China’s economy is entering a new era — on the one hand, China has completed the building of a moderately prosperous society in all respects and put “common prosperity” on the agenda. On the other hand, in the face of an increasingly complex international situation, China will be in a period of “limited globalization” for a long time.

China should continue to achieve common prosperity on the basis of “making the economic pie bigger” rather than simply adjusting the distribution. This requires deepening reform and opening-up, and shifting from quantitative expansion of the economy to improving the quality of the economy.

China’s industrial policies are inseparable from those of other countries. In the long run, China has already found its own way in the practice of economic development, and China should establish a theoretical system based on its own practice.