1.

Three years ago The Economist used the term “slowbalisation” to describe the
fragile state of international trade and commerce. After the go-go 1990s and 2000s
the pace of economic integration stalled in the 2010s, as firms grappled with the
aftershocks of a financial crisis, a populist revolt against open borders and
President Donald Trump’s trade war. The flow of goods and capital stagnated.
Many bosses postponed big decisions on investing abroad: just-in-time gave way
to wait-and-see. No one knew if globalisation faced a blip or extinction.

2.Now the waiting is over, as the pandemic and war in Ukraine have triggered a
once-in-a-generation reimagining of global capitalism in boardrooms and
governments. Everywhere you look, supply chains are being transformed, from the
$9trn in inventories, stockpiled as insurance against shortages and inflation, to the
fight for workers as global firms shift from China into Vietnam. This new kind of
globalisation is about security, not efficiency: it prioritises doing business with
people you can rely on, in countries your government is friendly with. It could
descend into protectionism, big government and worsening inflation. Alternatively,
if firms and politicians show restraint, it could change the world economy for the
better, keeping the benefits of openness while improving resilience.

3. After the Berlin Wall fell in 1989, the lodestar of globalisation was efficiency.
Companies located production where costs were lowest, while investors deployed
capital where returns were highest. Governments aspired to treat firms equally,
regardless of their nationality, and to strike trade deals with democracies and
autocracies alike. Over two decades this gave rise to dazzlingly sophisticated value
chains that account for half of all trade: your car and phone contain components
that are better travelled than Phileas Fogg. All this kept prices low for consumers
and helped lift 1bn people out of extreme poverty as the emerging world, including
China, industrialised.

4.But hyper-efficient globalisation also had problems. Volatile capital flows

destabilised financial markets. Many blue-collar workers in rich countries lost out.
Recently, two other worries have loomed large. First, some lean supply chains are
not as good value as they appear: mostly they keep costs low, but when they break,
the bill can be crippling. Today’s bottlenecks have reduced global GDP by at least
1%. Shareholders have been hit as well as consumers: as chip shortages have
stalled car production, carmakers’ cashflows have dropped by 80% year on year.
Tim Cook, the supply-chain guru who runs Apple, reckons such snafus could
reduce sales by up to $8bn, or 10%, this quarter. Covid-19 was a shock, but wars,
extreme weather or another virus could easily disrupt supply chains in the next
decade.

5. The second problem is that the single-minded pursuit of cost advantagehas led to
a dependency on autocracies that abuse human rights and use trade as a means of
coercion. Hopes that economic integration would lead to reform—what the
Germans call “change through trade”—have been dashed: autocracies account for
a third of world GDP. Vladimir Putin’s invasion of Ukraine has painfully exposed
Europe’s reliance on Russian energy. Meanwhile, President Xi Jinping’s
ideological and unpredictable China has a trade footprint seven times as big as
Russia’s—and the world relies on it for a variety of goods from active
pharmaceutical ingredients to the processed lithium used in batteries.

6.One indication that companies are shifting from efficiency to resilience is the
vast build-up in precautionary inventories: for the biggest 3,000 firms globally
these have risen from 6% to 9% of world gdp since 2016. Many firms are adopting
dual sourcing and longer-term contracts. The pattern of multinational investment
has been inverted: 69% is from local subsidiaries reinvesting locally, rather than
parent firms sending capital across borders. This echoes the 1930s, when global
firms responded to nationalism by making subsidiaries abroad more self-sufficient.

7.The industries under most pressure are already reinventing their business models,
encouraged by governments that from Europe to India are keen on “strategic
autonomy”. The car industry is copying Elon Musk’s Tesla by moving towards
vertical integration, in which you control everything from nickel mining to chip
design. Taiwan’s electronics assemblers have cut their share of assets in China
from 50% to 35% since 2017 as clients such as Apple demand diversification. In
energy, the West is seeking long-term supply deals from allies rather than relying
on spot markets dominated by rivals—one reason it has been cosying up to gas-
rich Qatar. Renewables will also make energy markets more regional.

8.The danger is that a reasonable pursuit of security will morph into rampant
protectionism, jobs schemes and hundreds of billions of dollars of industrial
subsidies. The short-term effect of this would be more volatility (biến động) and
fragmentation that would push prices yet higher: witness President Joe Biden’s
consideration of new tariffs on solar panels, which he paused this month in the face
of shortages. The long-run inefficiency from indiscriminately replicating supply
chains would be enormous. Were you to duplicate a quarter of all multinational
activity, the extra annual operating and financial costs involved could exceed 2%
of world GDP.

9. The trouble with safe spaces. That is why restraint is crucial. Governments and
firms must remember that resilience comes from diversification, not concentration
at home. The choke-points autocracies control amount to only about a tenth of
global trade, based on their exports of goods in which they have a leading market
share of over 10% and for which it is hard to find substitutes. The answer is to
require firms to diversify their suppliers in these areas, and let the market adapt.
Will today’s governments be up to the task? Myopia and insularity abound. But if
you are a consumer of global goods and ideas—that is to say, a citizen of the world
—you should hope globalisation’s next phase involves the maximum possible
degree of openness. A new balance between efficiency and security is a reasonable
goal. Living in a subsidised bunker is not. Switching to a security-first model of
globalization would make the world more expensive and dangerous.

- Grapple with (v): vật lộn với

Ex: Firms grappled with the aftershocks of a financial crisis
- Blip (n): a change in a process or situation, usually when it gets worse for a
short time before it gets better, a temporary problem.
1.It is almost too polite to call the deepening rivalry between China and the
American-led West a new cold war. The original cold war between America and
the Soviet Union was grimly rational: a nuclear-armed confrontation between
hostile ideological blocs which both longed to see the other fail. For all their
differences, China and Western countries profit vastly if unevenly from exchanges
of goods, people and services worth billions of dollars a year. Their respective
leaders know that global problems from climate change to pandemics or nuclear
proliferation can only be solved if they work together. Yet increasingly,
interdependency is not enough to stop one side—often China, but not always—
from starting reckless disputes rooted in suspicion of the other.

Rational (a): logical, reasonable

Grimly (adv): in a very serious. Gloomy. Or depressing manner

2.A dismaying case in point involves fighter jets of China’s People’s Liberation
Army (PLA), which have in recent months staged dangerous, high-speed passes to
intimidate Western military aircraft in international airspace near China. Chinese
pilots have flown so close that diplomats from America, Australia and Canada
have lodged formal complaints with officials in Beijing.

3.Western governments recall the crisis caused by a Chinese pilot who died after
colliding with an American spy plane over the South China Sea in 2001. Going
public, Australia’s defence minister accused a PLA jet of cutting in front of one of
its maritime-surveillance aircraft in the same area on May 26th, before releasing
“chaff”—tiny metal-coated strips meant to confuse radar—that were sucked into
one of the Australian plane’s engines. For its part, Canada accuses Chinese fighter
jets of endangering one of its maritime-patrol aircraft flying out of Japan. Canadian
officials note that their plane was on a month-long mission to detect North Korean
smuggling, including ship-to-ship fuel transfers at sea, in support of United
Nations sanctions designed to deter North Korea from developing nuclear missiles.
These are sanctions that China approved as a permanent member of the Security
Council. China’s actions “are putting people at risk while at the same time not
respecting decisions by the UN”, said Canada’s prime minister, Justin Trudeau.
4.These mid-air interceptions are worrying evidence of the pla’s appetite for risk.
But defences offered by the Chinese government point to a still larger problem.
Chinese distrust of America and its allies is so deep that the two camps do not
agree about even basic principles. When America and Western powers try to
discuss rules to ensure safe encounters in international waters or skies, China’s
response is to growl that foreign warships and planes should stay far from its
shores. Its foreign ministry, which has promoted spokespeople who thrill
nationalists with shows of contempt for the West, questions the legitimacy (tính
hợp pháp) of surveillance missions, though these are normal for advanced armed
forces, as when a Chinese spy ship loitered 50 nautical miles (93km) from an
Australian military communications base last month. Zhao Lijian, a pugnacious
foreign-ministry spokesman, said that Australia’s aircraft “seriously threatened
China’s sovereignty and security”, and called China’s response “professional, safe,
reasonable and legal”. The defence ministry accused Canada of using sanctions as
a pretext for “provocations against China” and noted that UN resolutions on North
Korea offer no mandate for anti-smuggling operations.

5.Take a step back, and the row reveals how China and the West doubt one
another’s sincerity when it comes to ridding the Korean peninsula of nuclear
weapons. The UN’s nuclear watchdog, the International Atomic Energy Agency,
warned on June 6th that the first North Korean nuclear test since 2017 may be
imminent (sắp xảy ra), noting activity at a test site. Markus Garlauskas of
Georgetown University in Washington was America’s national intelligence officer
for North Korea from 2014 to 2020. He calls Chinese “obstructionism” (chủ nghĩa
cản trở) over sanctions enforcement “exactly the wrong message” to send to North
Korea at such a moment. Last month China and Russia vetoed (phủ quyết) an
American-drafted UN resolution tightening sanctions on North Korea after it tested
ballistic missiles. Western diplomats worry that a rare area of agreement with
China—a shared concern about a nuclear-armed North Korea— is crumbling.

6.Such mistrust is mirrored in China, whose diplomats scold America for failing
to offer any incentives for North Korea to return to the negotiating table, after
failed summit meetings between Kim Jong Un, the North Korean leader, and
Donald Trump, the president at the time. Zhao Tong, a Beijing-based disarmament
expert with the Carnegie Endowment for International Peace, a research institute,
reports that a growing number of Chinese scholars suspect that America “doesn’t
want to resolve the North Korean nuclear problem”. Such scholars believe that
America is using the threat from North Korea to rally South Korea and Japan
behind its true goal, namely containing China, says Mr Zhao.
7.China faces unwelcome choices, says Li Nan, an expert on North Korea at the
Chinese Academy of Social Sciences. He reports that North Korean officials yearn
for a cold war in Asia, believing that Russia and China would take their side,
wrecking the long-standing Chinese policy of seeking balanced relations with
North and South Korea, which is an important Chinese trading partner. He says
that China is anxious to avoid an ideological division of Asia, which would push
South Korea and Japan even closer to America. Indeed, China still
supports UN sanctions on North Korea, insists Mr Li. In his telling, China sees
Korean disarmament (giải trừ quân bị) as an area for co-operation with America,
but is losing hope that North Korea is a priority for Joe Biden, America’s
president.

8.The prospect of North Korea fielding nuclear missiles that can hit far-off
continents—a nightmare that brought China and the West together at the UN as
recently as 2017—is no longer enough to build trust. Meanwhile, the PLA tries to
use fear to put Western powers in their place and show that China plays by
different rules. It is not a cold war yet. But hotheads are courting disaster.