By Shin-wha Lee*
The international community has faced an unprecedented social and economic shock due to three ‘big bangs’ — increasing US–China strategic competition, the fourth industrial revolution and the COVID-19 crisis. These three big bangs are interrelated and pose important challenges and consequences for world trade, regional stability and the future of the liberal international order.
First, the US–China trade conflict and strategic competition that began in earnest in 2018 stemmed both from a sense of crisis within the United States about China’s unfair trade and industrial espionage and from the rapid economic growth, advanced technological development, and strengthening military power achieved through them.
Faced with an increasingly vulnerable global supply chain stemming from COVID-19, countries rushed to reorganise their supply chains to strengthen security. As the link between technology and security became more important, the US enacted a ‘Special Act on Semiconductors’ and hastened the ‘internalisation’ of the semiconductor industry. The reorganisation of China-centred global value chains is restructuring the world economy and trade. The United States and other developed countries are abandoning offshoring to China to cut costs and instead are reshoring, nearshoring or ally-shoring them. The trend of shifting value chains away from China is based on the judgement that leadership in advanced technology is the only means to maintain strategic hegemony.
Second, the pandemic confirmed that the postwar world order is unravelling. Although the global organisations and norms that have led international affairs and the economic order for the past 75 years are still in place their practical role and binding force are waning. It is unlikely that new organisations and norms will emerge to fill the gap, and the great powers show no sign of global leadership. Instead of cooperating to combat the pandemic, the United States and Ch ..
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