Beyond Covid-19: The Prospects of Multilateralism

Abstract

The Coronavirus severely impacted the global economy and global markets across the Asia Pacific countries and economies. China’s GDP growth rate declined significantly following the lockdown of its economy due to covid. Traditionally, the Chinese economy was growing at 6–8% annually. It declined during the pandemic to about 3–4% annually, and continues to be the same for the early part of 2023. The Covid pandemic also impacted other countries and economies throughout Europe, the Americas, Canada, and the United States, as well as many other emerging economies. The Middle East and North Africa equally suffered; however, the oil producers had the benefit of the increase in the oil price and their economy managed to continue to grow. The globalization of the last six decades under a framework of a liberal global economy led by the United States created significant economic interdependencies and brought about liberalization of global society and significant increases in trade and investments. This globalization equally resulted in social and economic costs that impacted workers and a large segment of lower paid employees in OECD countries and the emerging economies of the global south. This globalization and COVID-19 created disruption to global supply chains and resulted in shortages impacting consumers and producers throughout the globe. These economic dislocations resulted in protectionist sentiments and overall protectionism in many countries. It also led to higher rates of inflation worldwide. China, the second largest GDP after the United States estimated at over 13 trillion dollars suffered significant decline and tarnished the label of China as the “Factory of the World.” It also reduced China’s ability to export and resulted in job losses within the Chinese economy and has called upon the Chinese leadership to assess its stand and its economic place and influence in the global economy. The current Chinese policy makers have recently embarked on a different approach to global linkages and embraced multilateralism as a framework whereby economic and business linkages can be supported in a multilateral framework that could reduce political conflict. The Chinese leader Xi Jinping recently reached out to Iran and Saudi Arabia to help reduce the conflict between the two countries. Both countries are major oil producers and China found it in its interest as a major oil importer to bring the two countries together. In this framework, political accommodations can complement trade and investment between former antagonists and China’s dependency on oil imports could become more manageable and improve the oil market as well as trade and investment in the region and help the oil producers find common grounds and continue to supply oil to China. The JOURNAL OF ASIA-PACIFIC BUSINESS 2023, VOL. 24, NO. 1, 1–3 https://doi.org/10.1080/10599231.2023.2196705