Published: 17/06/2020

The rivalry between the United States and China is a battle of two global systems: the Bretton Woods monetary system and China’s New Silk Road initiative, the germ of a parallel system.

Poland and Romania give priority to partnerships with European and US firms, whereas Hungary prefers Chinese corporations. In contrast, Bulgaria seems to show no strategic preference to either of them. For historical reasons, Poland places its investment-related hopes on the West. At the same time, Poland is also interested in cooperation with China, as reflected in undertakings such as the planned construction of the Solidarity Transport Hub. This project also involves measures such as building 1,600 km of new railway lines, says Piotr Arak.

How will the coronavirus affect globalisation?

Due to the crisis following the SARS-CoV-2 coronavirus pandemic, there is a growing sentiment that the Western economies should be ‘decoupled’ from China and production processes should be ‘reshored’ from China back to the West. The PEI analysts have already pointed out that reshoring began several years ago and primarily concerned the relocation of production from China to India and South-East Asian countries, but in connection with the trade war between the United States and China – to the USA as well.

As explained by Grzegorz Lewicki, the author of the report and a fellow of the Polish Economic Institute, nowadays the processes seem indispensable for security reasons. Let us note that in March 2020 – when Poland’s demand for disinfectants skyrocketed – the key ingredients necessary as production inputs were nowhere to be found, which disrupted the production chains of Polish firms and prevented them from supplying the final product. It was due to the fact that German and Dutch manufacturers had put the key ingredients on their respective local markets to support their citizens in the first place, says Grzegorz Lewicki.

Therefore, in a longer term, we can expect the globalisation patterns to differ even more widely, as a result of temporary global slow-downs and accelerations, affecting individual countries to a varying degree. The core of such ‘patchy’ globalisation will be security, explains Grzegorz Lewicki. After extreme experiences relating to the pandemic, countries will start to establish experimental institutions allowing to temporarily reduce civilisational complexity in case of crisis. Their objective will be to efficiently and safely limit certain activities – air transport, migration, foreign production, etc. – should such a need arise, e.g. in the case of a pandemic.