The world's becoming a museum of socialist failures.
As fresh Covid-19 restrictions bite this month, it is a fair bet that millions of western households will spend the holiday season glued to streaming services. It is also a reasonable prediction that many will watch the wildly popular Netflix hit Squid Game, a violent dystopian fantasy that comes from South Korea. So far, so trivial, you might think. But embedded in this viewing choice is a symbol of the changing nature of globalisation which is rather cheering — and which investors should note as we prepare for 2022.
Over the past few decades, the word “globalisation” has been largely synonymous with westernisation, at least in the minds of the global business elite. Globalisation of media content meant that Hollywood was exporting its hit movies; and when the US media platform Netflix sprang into life 24 years ago, it served American-made fare, mostly to American-based consumers.
But Squid Game is a made-in-Korea product, backed by Netflix, which has become the most viewed show in 90 countries around the world this year. Indeed, polls suggest that one in four Americans has watched it, while Spanish, Brazilian and French offerings produced for a global audience now litter the Netflix site.
The globalisation of media, in other words, is no longer about Hollywood; digitisation has made it a multipolar affair. And this is just one metaphor for what is happening in other fields. Think of fast fashion, where the Chinese company Shein now has a quarter of the US market, or to social media, where another Chinese group, TikTok, has 1bn global consumers. Then consider fintech, where Singapore is now such a locus of innovation that the Bank for International Settlements opened its fintech innovation hub there instead of heading to Silicon Valley.
Or think of development flows and how Beijing’s Belt and Road Initiative is creating non-western linkages across Asia and Africa. This point about multi-polarity might seem obvious, since it has been emerging for a while. But it is worth stressing right now given the current gloom about globalisation. In the past couple of years, western pundits have often fretted that we are moving into a “deglobalisation” phase.
And no wonder. Although global financial integration soared early in the 21st century, it has flatlined since the financial crisis of 2008, as a study of globalisation that is issued each year by DHL, the logistics group, shows. Trade wars and rising nationalism have also undermined global trade flows, while an authoritarian crackdown on digital freedoms in countries such as China threatens to splinter the internet — and pandemic lockdowns have further shattered global supply chains.
However, it is possible that when future historians look back at 2022, they will see not just deglobalisation, but an emerging re-globalisation too, or a type of global connectivity driven by new, non-western and non-traditional forces
Globalisation had a very specific topology — it was dollar denominated, shaped by the Washington Consensus,” says Joshua Cooper Ramo, chief executive of Sornay, an advisory and growth capital firm. “But deglobalisation is a reaction to too much openness and too much speed — there is a new, re-globalisation model coming. Most in Washington don’t see this yet [but] the battle is over the new topology of re-globalisation.” This might sound threatening, at least to those Washington observers. But it may also be giving new impetus to global integration.
Consider, once again, the DHL globalisation report, which is compiled by collating metrics about the movement of people, money, trade and information. The latest survey, released at the end of last month, shows that in 2020 the global movement of people, capital and trade collapsed as the world absorbed the Covid-19 shock. The only globalisation metric that stayed strong was information, due to exploding internet usage. But what is more surprising is that global trade flows have recently surged, in spite of supply chain disruptions. Capital movements have jumped dramatically too, amid a flurry of investment flows and cross-border mergers and acquisitions, not just between western countries but non-western ones too.
And while the growth of information flows has eased back to the pre-pandemic trend (perhaps because of internet nationalism), and the movement of people remains low, DHL calculates that the composite index of global integration was around 124 at the end of 2020, compared to a baseline of 100 in 2000. Yes, that is down from a pre-pandemic peak of 127 in 2019. But it is higher than the 119 level recorded in 2007 — in other words, just before the financial crisis and at the high point of the western-driven globalisation wave of the early 21st century.
Moreover, DHL projects that its index will be at around 130 by the start of 2022, setting a new peak. So, although the pandemic was a massive stress test for global connectivity, it seems that integration is now higher, not lower, than before. Is this due to a “re-globalisation”? The data do not yet support this conclusion. But if you stream TV content this Christmas, ponder the trend. Yes, the world might now seem dystopian, xenophobic and depressing; but it is also being remade by digital innovation in exciting ways, in finance and business — as well as our TV shows.
What ‘Squid Game’ tells us about the changing face of globalisation
MI5 unmasks Chinese ‘agent’ on mission to influence UK politicians
London | British intelligence agency MI5 has publicly identified a London-based solicitor, Christine Lee, as a Chinese Communist Party agent carrying out political interference operations in Britain’s parliament.
In an “interference alert” sent to MPs and members of the House of Lords, MI5 said Ms Lee worked on behalf of the CCP’s United Front Work Department to peddle influence and facilitate donations.
Ms Lee allegedly bankrolled the salary of two staffers in the office of former shadow cabinet minister Barry Gardiner, one of whom was her son, with donations to the MP and his Labour Party reportedly totalling almost $1.3 million.
Christine Ching Kui Lee is accused of bankrolling salaries for to two Labour Party staffers.
Photographs in British media reports showed Ms Lee talking to former prime minister David Cameron and former opposition leader Jeremy Corbyn.
MI5 said the UFWD’s mission was “to covertly interfere in UK politics through establishing links with established and aspiring parliamentarians across the political spectrum”.
The aim was to “ensure the UK political landscape is favourable to the CCP’s agenda, and to challenge those that raise concerns about CCP activity, such as human rights”.
‘A matter of grave concern’
MI5 said Ms Lee had cultivated relationships with MPs and had facilitated donations that ultimately, and covertly, came from foreign nationals based in China and Hong Kong.
The incident has echoes of similar events in Australia in 2017-19, which culminated in the politically well-connected Chinese businessman and party donor Huang Xiangmo having his visa cancelled on suspicion that he was working on behalf of the UFWD.
Former Conservative Party leader and outspoken China hawk Iain Duncan Smith said he was urgently seeking more information from the government.
“As a Member of Parliament who has been sanctioned by the Chinese government, this is a matter of grave concern that there has been an agent of the Chinese government active here in Parliament working with MPs to subvert the processes here,” he tweeted.
Home Secretary Priti Patel promised fresh “measures to counter these kinds of threats”, which would “make our country even harder for states to conduct hostile activity in”.
Investigation continuing
Ms Lee’s eponymous law firm carries out legal work for the Chinese embassy in London, and she belongs to the China Overseas Friendship Association, a UFWD-affiliated body.
She has also worked for a campaign called the British-Chinese Project, for which she won an award from former prime minister Theresa May three years ago.
Ms Lee, who holds British citizenship, remains under security service investigation but has not been arrested.
‘Hostile activity’
Mr Gardiner, who was shadow trade minister under Mr Corbyn, said he had been liaising with the security services for some time about Ms Lee’s activities.
“I have been assured by the security services that whilst they have definitively identified improper funding channelled through Christine Lee, this does not relate to any funding received by my office,” he said in a statement.
Ms Lee’s son, who worked as Mr Gardiner’s diary manager, resigned on Thursday. The MP said that MI5 had no intelligence implicating his staffer in Ms Lee’s activities, and that Ms Lee had not funded any of his staff since June 2020.
House of Commons Speaker Lindsay Hoyle, who circulated MI5’s alert to MPs, urged his colleagues to “verify the source of any donation they receive to ascertain whether it is from a permissible source”.
The chair of the parliament’s foreign affairs committee, China hawk and former intelligence officer Tom Tugendhat, welcomed MI5’s focus on the threat.
“It is clear that the challenge from Beijing is increasing and we need to defend our democracy against hostile activity,” he tweeted.
