Home Views Global Economy

Three globalisation shocks could hurt China and help India

Arvind Subramanian and Josh Felman
Arvind Subramanian and Josh Felman8/18/2022 12:36 PM GMT+08  • 6 min read
Three globalisation shocks could hurt China and help India
Residential apartments under construction in Shanghai. The real estate and construction boom that powered China’s rapid expansion for decades has come to an end / Photo: Bloomberg
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

Over the past decade and a half, financial, health and geopolitical shocks have pummelled world trade. The 2008 global financial crisis devastated the banks that financed much of the world’s commerce, and then triggered a secular decline in economic growth. In 2020, the Covid-19 pandemic closed factories and upended global supply chains. And now Russia’s invasion of Ukraine has disrupted food and energy supplies, threatening to divide the world along geopolitical lines.

Some argue that these three shocks might even lead to the death of globalisation. But the reality is likely to be more complex: The disruptions will probably transform the global trading system rather than shrink it, with the impact varying across countries. Significantly, China will probably lose, while India might even gain.

Starting in the early 1990s, developing countries advanced as a group for almost two decades, rapidly catching up with rich countries’ standards of living. This convergence was facilitated by hyper-globalisation, whereby trade liberalisation and large declines in transport and communication costs swiftly increased opportunities for the developing world. China and India benefitted enormously, leading to the largest reductions in poverty the world has ever seen.

For more insights on corporate trends...
Sign In or Create an account to access our premium content.
Subscription Entitlements:
Less than $9 per month
Unlimited access to latest and premium articles
3 Simultaneous logins across all devices
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.