Pandemic signifies a new era of globalization
“Travel halted”, “Border shut”, “ Lockdown”. These are common words shown in the news since the pandemic. The isolation situation caused by the epidemic made more and more people think about the impact of the pandemic on globalization. Some people argue that the pandemic brought the second era of globalization to a decisive end. Others argue that pandemics will result in an acceleration of change to form a new and different form of globalization. It is important for everyone to consider the relationship between pandemics and globalization because as human beings living in the 21 century, pandemics and globalization are closely related to everyone. For me, I agree that pandemic signifies a new era of globalization because the sharp changes caused by pandemics since 2019 cannot offset the benefit brought by the complex globalization systems with the integration of supply chains built in the last several decades. Although the epidemic brought obstacles to the development of globalization, it should only slow down the process of globalization in recent years. After weighing the benefits brought by the global supply chain and the risks of the epidemic, countries will continue to participate in the global supply chain. The obstacles which challenge the current systems will ultimately lead to a globalization system with more mature and complex supply chains.
Admittedly, the risk of dependence on the global supply chain entered people’s consciousness while facing the influence brought by the pandemic. The well-functioning global supply chain is inseparable from the well-functioning of every part of the supply chain. In other words, as long as there is a problem in one part of the supply chain, the whole system will be badly affected. For example, the Apple company reported a delay in delivering iPhones to US consumers because the factories in China shuttered under the effect of the virus. (Fontaine, 2020) Here we can feel how the global supply chain of products is integrated and relevant to the benefit of every country and every people’s life. It is reasonable that people and countries do not want to face similar dilemmas in the future. In this case, countries and companies would want to produce products in their own country to avoid being affected by the problems raised by the broken-down supply chain. They may focus on trying to produce on their own instead of being fully dependent on the global supply chain as before. Hence, we may see a more nationalized industry during the first fewer years of the pandemic because of people’s awareness regarding risk deduction. The sudden halt in the global supply chain by the outbreak won’t recover overnight.
However, the idea that the epidemic is the end of globalization is too absolute. Globalization will continue as long as a country gets involved in the global supply chain. Regardless of whether the companies and countries have the ideas to exist from the global supply chain system or not, the actions to change the entire supply chain of all the industries back to a single country are almost impossible. Take raw materials as an example, countries that lack a certain raw material cannot carry out the corresponding business well if the country lacks that certain kind of raw material. For example, Japan’s vehicle industry lacks raw materials like iron for producing cars. It imported 99.44 million metric tons of iron ore from abroad in 2021, becoming the second-largest iron ore importer in the world (Gorka, 2021). From the statistics, we can easily say that without a large amount of imported iron, the Japanese vehicle industry will shrink a lot. However, though fully existing from the global supply chain is impossible, countries could be less dependent on a single country to reduce the risk.
There are several ways for countries to avoid over-dependence on the global supply chain, which may result in an unsustainable and unstable situation for the country. Countries can make great use of the geographic diversity of suppliers to help decrease the risk of the supply chain. Firms can give most of the orders to the most advantageous supplier but divide small parts to other regions as well as within their own country to get rid of the risk of an unstable supply chain. For example, Japan can import iron ore from different countries and areas like Australia, Brazil, China, Canada, and South Africa (OEC, 2021). In this case, Japan can reduce the risk when supply chain issues originate from specific countries. The industry can produce and develop normally without large shocks while involving the global supply chain. There will be a more mature supply chain system built with the diversity of geography as well.
Hence, if we can reduce the risk inherent in global supply chains, we will see that involvement in the global supply chain is the most cost-effective model for all countries because the supply chain is so powerful and valuable. Given the attractiveness of the integration of the supply chain, which will bring a larger total benefit to countries, the appeared nationalized situation around the globe is temporary and possible to solve. In other words, countries have earned a large number of benefits from the global supply chain over the past few decades. Though the epidemic has caused governments around the world to rethink and measure the risks of globalization, the integration of the global supply chain will not change. Richard Fontaie, the chief executive officer of the Center for a New American Security, discussed in his article “Globalization Will Look Very Different After the Coronavirus Pandemic” that, “The new watchword is likely to be risk reduction rather than cost reduction”. “Risk reduction” here refers to decreasing risk for promising the security of country development. Richard explains that considering national interest and the further development of the country, the focus of future globalization will be more on reducing risks rather than reducing costs. However, it should not be surprising that the benefit from the global supply chain is strong enough for countries to consider making a balance between deducting risk and gaining the benefit from the global supply chain. The economic benefit gained from engaging in the integration of the global supply chain is still one of the most important factors for courtiers and companies to take into account. Hence, when the risk is under control, the benefit gained from the global supply chain is undeniable.
Several of our real-life examples can help support how attractive the global supply chain is. To be specific, the vaccines industry can be involved in the global supply chain and bring profits to countries. For example, as discussed in Zachary Karabell’s article “Will the Coronavirus Bring the End of Globalization? Don’t Count on It”, China “has delivered medical supplies, equipment, and doctors to Italy and other EU countries” in 2020. “China appears committed to more engagement with the outside world, not less.” In other words, though China itself is still suffering from the coronavirus at that time, it tends to increase investment abroad and become involved in the global vaccine supply chain. It is no surprise that with more experience of coexisting with pandemics and more research on the virus itself, there will be a mature supply chain of vaccines appearing in our world, through which most of the countries can benefit from the complex and complete system.
In conclusion, the pandemic is a new era of globalization. Though pandemics may slow down the path of globalization in the first few years, the problems are highly possible to be solved. Pandemic will finally contribute to a more complex globalization system in the future.
Work Cited
D. Gorka. “Import volume of iron ore to Japan from 2011 to 2020.” October 19, 2021.https://www.statista.com/statistics/1132476/japan-iron-ore-import-volume/. Accessed 2 March, 2022.
OEC. “Iron ore in Japan.” 2021. https://www.sidmartinbio.org/how-has-japan-made-up-for-its-lack-of-natural-resources/. Accessed 2 March, 2022.
Richard Fontaie. “Globalization Will Look Very Different After the Coronavirus Pandemic.” April 17, 2020. https://foreignpolicy.com/2020/04/17/globalization-trade-war-after-coronavirus-pandemic/. Accessed 24 February, 2022.
Zachary Karabell. “Will the Coronavirus Bring the End of Globalization? Don’t Count on It.” March 20, 2020. https://www.wsj.com/articles/will-the-coronavirus-bring-the-end-of-globalization-don’t-count-on-it-11584716305. Accessed 24 February, 2022.
