Financial Crisis Western Protectionism Escalation

Protectionism, which is triggered by the global financial and economic crisis, is facing a threat of escalating again. Western protectionists recently used Western Europe's economic recession and unemployment to increase significantly, throwing out the return of western enterprises.

In view of this, Chen Deming, Minister of Commerce of China, delivered a speech at the annual reception of the China Chamber of Commerce early in the year, saying that China will continue to optimize its investment environment and support foreign enterprises to invest in China.

For the return of foreign enterprises, entrepreneurs should make their own decisions.

From the perspective of the development history of the world financial and economic crisis, once the global financial and economic crisis occurs, all countries will suffer from economic growth and unemployment.

At the same time, countries often adopt "beggar thy neighbour" foreign trade and currency exchange rate policies, while shifting the financial crisis to boost their export competitiveness in order to prevent the adverse consequences of further economic stagnation.

However, the premise of this policy orientation is that others will not act according to law. If other countries choose similar economic policies, they will only lead to the outcome of "double lose" or "more lose".

The Western foreign trade protectionists and other political forces put forward the "return of foreign enterprises to the west", which can be regarded as the upgrading of traditional trade protectionism, that is, from trade protection to industrial protection.

This is different from the "immature industry protection" of the emerging industries in the traditional economic theory, but is more "sunset industry protection" which has lost competitiveness to Europe and the United States.

The background is a continuous rise in the unemployment rate in the West during the recession.

According to statistics released by the US government in December 5th, the number of jobs in the US non-agricultural sector decreased by 533 thousand in November, the largest number in 34 months. The figures released by the Canadian government on the same day show that in November, the number of jobs in Canada dropped by about 71 thousand, the largest decline in single months in 26 years.

Through the industrial return of Western European and American enterprises, it seems that it can solve imminent employment predicament. However, judging from the law of development of western enterprises, this is contrary to the original intention of enterprises to reduce costs and enhance competitiveness through industrial pfer.

Moreover, under the background of globalization, industrial pfer has a significant effect on eliminating trade barriers and accelerating the internationalization process of enterprises.

It can be said that a modern enterprise operation has already pcended the scope of the state, and more embodies the spirit of globalization of division and cooperation among multinational departments.

To take a step back from the more practical operation cost of enterprises, the high welfare and social security in western countries have made their labor costs far exceed that of the developing countries, especially in the emerging market economies of Asia.

Under the premise of highly dependent on the modern production mode of the pipeline, the difference between ordinary individual labor has already been greatly reduced, and the western industry's outward migration is the only way to reduce the comprehensive operation cost.

The basic assembly line still stays in the developed countries in Europe and the United States, which will only bring about high cost of enterprise management. The most typical example is the "three giants of Detroit" who are also facing bankruptcy dilemma.

Despite repeated claims from the US government for high compensation and loan support, the long-term accumulation of labor disputes and the dilemma of industrial pformation still drag down the three giants.

Therefore, western political forces call for the return of European and American enterprises, which will inevitably lead to a series of problems, such as the upgrading of business costs, the decline of industrial internationalization, and the shrinking of market share in the world.

The outcome is likely to save employment, but lose the enterprise, and ultimately lose the basic guarantee of employment.

Besides, if the West persists in "beggar thy neighbour" and asks the industry to return to protect its employment stability, other countries will probably follow suit and launch a similar policy of limiting foreign investment.

This is undoubtedly different from the current global cooperation in coping with the financial crisis. It will not only disintegrate the crisis offensive and defensive alliance, but also easily lead to a new round of mutual economic and trade sanctions. Finally, not only will the industry lose heavily abroad, but also the western developed countries will not get the expected return.

The recovery of the world economy will face greater threat.

Yang Jing: editor in charge