(March 16, 2009) — Asking for a definition of globalization may be the best Rorschach test you can give someone in the plastics industry.
Staring at those inkblot patterns, you might see gathering storm clouds or peaceful mountains. Depending on who you are and where you're standing, globalization can mean hollowed-out industrial economies competing against US$1-an-hour workers in developing countries, or new opportunities, investments and growth in places you're not sure how to pronounce.
Before you take the test, though, step back for a second and consider some dry numbers.
In 2007, the biggest markets in the world for polyethylene and PVC, in order, were China, the European Union, the United States, Japan and India. In 2012, it will be the same top five, with India edging out Japan for the fourth spot.
But the size of the EU, U.S. and Japanese markets will not change much in that time period. Almost all of the growth will come from the other two: China is projected to grow from 72 billion pounds to 113.8 billion pounds, and India could more than double from 11.9 billion pounds to 25.4 billion.
No matter what you think of globalization, those numbers say it's a reality.
The debate has been here for awhile. During the early years of Plastics News, in 1993, we found ourselves exploring the impact of the new North American Free Trade Agreement between Mexico, the United States and Canada.
At the time, the Washington-based Society of the Plastics Industry Inc. acknowledged there were legitimate concerns about low wages and lax environmental standards in Mexico; nonetheless, SPI said the positives outweighed the negatives and mounted an active lobbying campaign for NAFTA's passage.
Across the world in China, the impact of 1989's Tiananmen Square crackdown in the pages of Plastics News seemed limited to a handful of big resin companies pulling out their small staffs and assessing future investments.
More down to earth, we wrote about the practical side of transporting resin in what was then China's 19th-century infrastructure. The U.S. and Chinese economies weren't interdependent in ways they are now.
Those headlines look pretty quaint today, when many of us regularly board planes from Beijing to Bangkok to Bangalore. The Internet is also a big part of making everything much smaller, linking buyers and sellers (and more easily bringing in new competitors) in ways not possible 20 years ago.
Today, we have resin firms from all corners of the world buying each other or striking big deals. Last year saw the first merger between European and Japanese injection press builders, traditionally the technology leaders, when Japan's Sumitomo bought Germany's Demag.
You can bet they were looking in the rearview mirror at China's massive, but not yet as technologically savvy, injection press industry. (India surely is looking; its government recently said it would slap punitive tariffs on China's press industry, in a bid to protect its own much smaller press makers. Globalization, it seems, is not always an argument of East vs. West, rich vs. poor, developed vs. developing.)
In American political debates, globalization often gets reduced to discussions about: Does China manipulate its currency? Are trade rules fair? Does some government policy amount to protectionism? There have been well-publicized trade cases, like U.S. plastic bag makers fighting for tariffs on China and other Asian countries.
All that is important, but maybe it misses the long view.
Here's more dry numbers. Asia in 1800 amounted to about 60 percent of the world's gross domestic product but fell to 20 percent by 1940, as a result of colonialism, wars and the hyper-development of the industrial revolution in Europe and America, according to A Short History of Asia, by former Australian Broadcasting Corp. journalist and politician Colin Mason.
Some of that decline was no accident, Mason writes: The colonial powers deliberately restrained and retarded the industrial development of their Asian colonies, like India, so Asia could supply raw materials and purchase the colonial power's manufactured goods.
Western colonial powers, in effect, rigged the system to benefit their economies. To use our modern management jargon, they kept the higher-value-added goods for themselves.
If you look at globalization that way, the significant shifts we see today in global development and trading patterns also might be seen as history correcting its course.
Major economies that had been down, for a variety of reasons, are returning to their historical place. If it wasn't happening today, it would have been reality for our grandparents or their grandparents. Maybe that's the answer to the Rorschach test.
Toloken is a Plastics News staff reporter and Asia bureau chief, based in Guangzhou, China.