The Midwesterner: Blogging the Global Midwest

A Chinese Plan for the Global Economy

For the rest of the world, the most interesting question about China's rise is what that country will do with the world economy when it gets its hands on it. A dramatic speech in Chicago recently by a well-connected Chinese economist indicated that Beijing has been asking the same question and has some interesting answers.

Most China-watchers had assumed that once China takes its place as the world's richest nation, it will approach the existing global economic institutions -- the International Monetary Fund, the World Bank, the World Trade Organization and the rest -- in one of two ways:

• It will use its economic power to shut them down, and set up new institutions answering to its needs. After all, the institutions were originally created by the U.S. and its Western allies, which had the economic power at that time, to answer their needs, so it's only logical that China would do the same.
• It will keep those institutions functioning as they do now. After all, China has risen to economic power within the existing Western-created system, has pretty much played by the existing rules and would see no reason to change a structure that has served it so well.

Wrong both times, according to Xu Hongcai, a Chinese economist, a veteran officer in both Chinese companies and government, and now with the China Center for International Economic Exchanges, which deals with China's position in the world economy. Xu came here recently to speak to a conference at Northwestern University pegged to summits, like the G8 and NATO summits in May, and their impact.

Chicago’s Morning After

I’ve been asked to speak at a University of Chicago conference on the NATO summit in Chicago that just ended – both on what the summit meant for NATO and how Chicago itself survived and benefitted from its big weekend in the global spotlight. Most of this blog posting deals with my comments on Chicago and how the capital of the Midwest took to a new role as the focus of the world.

Chicago set several goals for itself. First, it knew that the summit would draw protesters, so it was anxious to exorcise the ghosts of the 1968 Democratic convention. It wanted to strut big on the world stage and behave like a global city should behave. Mostly, it wanted to show itself off, on television and elsewhere, and in the process become more of a global tourist destination than it is now. I apologize to non-Chicago readers of this blog for this chauvinistic navel-gazing. But Chicago is in the middle of an historic transformation, from a Midwestern industrial powerhouse to a post-industrial global metropolis. It is paying real attention to the whole world for the first time and is very anxious about how it looks to that world. The decision to hold the summit here was part of that transformation, so it’s important to ask whether it worked.

History Comes to Chicago

Much global history is the product of politics and diplomacy carried along on a subterranean stream of quiet talks and deals that, apart from WikiLeaks, pop into view only when they fail and bad things – crises or wars – happen. But occasionally, international leaders stick their heads above this parapet and we get a look at where they think the world is now. These occasions are called summit meetings.

This is the right way to look at the NATO summit about to take place in Chicago. It’s not a one-shot attempt to solve the world’s problems, a unique chance to take momentous decisions. Rather, it’s a pit stop in history’s marathon, a time to assess where we’ve come since the last summit and where we want to go from here.

The Chicago summit may or may not produce great decisions. But it will force President Obama and his 27 NATO allies to recognize that we are living through a time of rather frightening change and that, if they cannot control this force, they have the responsibility to direct and shape it. 

Globalization -- Not Dead But Doddering

We've been here before, a century ago.

In the early years of the 20th century, the world took its first stab at globalization. Trade, investment, communications and immigration among nations grew to unprecedented levels. They called it the Belle Epoque, but it was Globalization I.  

Then it ended, stopped dead by two world wars and the Great Depression. Not until 1975 did the world achieve that level of economic integration. Then a new burst of globalization took off. A mix of space-age technology, international cooperation, opened borders and, not least, American leadership produced the global economy we know today. Call it Globalization Redux, or Globalization II.