The current economic crisis is the result of a global integration system that has been in place for almost 20 years.
Global integration is a solution the West uses to try to extend its markets for capital and goods. After being in use for many years, it has proved that:
1. The resources of this planet are unable to support common prosperity and wealth in the world, and the shortage of natural resources is one of the triggers of this economic crisis.
2. Imbalanced trade has hollowed the Western economy and collapsed its financial systems. Of course, there are many causes that helped to bring down the financial systems, including moral bankruptcy in employees, greed for profits, and governments' lax supervision. It is predictable - practically inevitable - that corruption would take place in financial institutions during a time when the influx of surplus capital met a hollow economy.
3. The spread of technology is speeding up. In a global integration system, the West must be capable of controlling the spread of technology, or be capable of creating new fields for economic growth, if it wants to be at the top of the list in terms of per capita production efficiency. A monopoly of certain technology, however, is very difficult to gain at present, because technologies are exported more conveniently than before with migrating technicians and swelling markets. The West has no way to continue its monopoly of technology, and it has not found a new spot for economic growth yet, either. So it is more difficult for the West to dominate developing countries in terms of per capita output.
4. The equalization of global labor efficiency makes the preservation of per capita economic advantage more difficult. Exorbitant per capita income fails the Western products in international competition because Western people are unwilling to compromise on income even when there's competition.
These conclusions will force Europe and America to retreat from global integration because it has proven more beneficial to underdeveloped countries than Western countries. Global integration does not bring Western developed countries the opportunities they expected, but instead it brings problems they did not expect.
In addition, the U.S. and Europe hoped they can play leadership roles in the global integration system, but with an imbalance of global politics, the leaders and those they lead barely have anything in common, let alone a consensus of mutual interests. The balance of trade, exchange rates, global pollution, efficiency of using resources, etc., are problems caused by global integration and make it difficult to reach a consensus in international cooperation.
I think that the global integration will certainly merit a weighty review in the West. Self-protection is a natural action taken by every country.
Who will benefit most from trade protectionism? The U.S. has the largest consumption market in the world. And right now, consumption is the most important driving force for economy, so trade protectionism will greatly benefit the U.S. With the U.S.'s huge trade deficit, politicians won't allow any more American layoffs in exchange for more imports. Therefore, it would not be surprising if the U.S. were the first to withdraw from the global economic integration system! Of course, a trade protectionism system is difficult to operate in a democratic country like the U.S.
China has the largest production rate in the world and doesn't have a large domestic market. That is to say, China’s economy depends more on international markets than on its domestic market. In light of this, the trade protection system is bad news for China. Without exports and the production lines set up in China by foreigners, it is difficult for the Chinese to improve its per capita labor productivity with Chinese consumption markets and economic systems only.
Two grave results will appear if the multinationals abandon their production facilities in China. The first is that China’s per capita productivity will take a nosedive and the second will be a decreased consumption capability and a dwindling market. China is different from the U.S. in this aspect, as the U.S. can still dominate in many fields such as technology, finance, cultural industry, software, service, education, medicine, military, and so on, even after many manufacturers move overseas. China, as a developing country, has fewer places to grow its economy if its industries shrink.
If the current economic crisis that the U.S. is facing was caused by a hollow economy resulting from imbalanced trade, then why wouldn't trade protectionism be a remedy for it?