China and Deglobalization of the World Economy

This paper analyses the causes of the downward trend in three key cohesion aspects of the world economy: international trade, foreign investment and global value chains. The paper finds that causes of these trends are not cyclical, but structural, that is, the process of deglobalization of the international market and transformation of the very foundations of the international economic system is underway. The specific aim of the paper is to investigate the impact of current trends on China's economy. The question is whether the Chinese economy, which has developed due to globalization processes, will be negatively affected by reverse processes and to what extent. The empirical analysis reveals very strong dependence of the Chinese economy on international economic trends. In spite of new development strategy which includes separation of the Chinese economy from disturbing external effects, most of current deglobalization trends have strong negative effects.