For centuries, Western powers have colonized and plundered nations across the globe, relegating them to the bottom of the economic chain.
BEIJING, Sept. 25 (Xinhua) -- For centuries, Western powers have colonized and plundered nations across the globe, relegating them to the bottom of the economic chain.
Colonized regions were reduced to supplying raw materials while their Western rulers reaped the rewards of industrial production. This center-periphery system left colonies as economic vassals.
Even after gaining political independence, many developing nations have struggled to break free from this entrenched economic dependency, still grappling with the long-lasting impact of their former colonizers.
SETTING STANDARDS, BLOCKING UPGRADES
For most developing countries, low-tech production sectors have always been an inevitable stage of development. Yet the development of those industries is typically accompanied by high levels of pollution -- much like the early period of industrialization in the United States and other Western countries.
While Western nations have chosen to overlook their own historical responsibilities for pollution and emissions during their modernization, they fail to actively provide the financial and technological support necessary for developing countries to pursue greener industrialization.
Instead, they impose stringent environmental standards that hinder the progress of these nations yearning for economic development.
Last year, the European Union introduced the Carbon Border Adjustment Mechanism, which levies high tariffs on carbon-intensive products imported from abroad. Similarly, Britain and the United States are developing comparable policies.
A study released last year by the London School of Economics and Political Science revealed that Africa will bear the brunt of the carbon mechanism. Projections show a 13.9 percent decline in aluminum exports to the EU and an 8.2 percent decrease in steel exports.
Analysts pointed out that Western nations use carbon tariffs to seize control of the high ground in the low-carbon industrial value chain.
Developing countries have two options: either bear the significant impact of hefty carbon tariffs or be forced to pay a premium to import green technologies and equipment from the West.
Neither choice is favorable for the green transition of developing economies.
REWRITING RULES
For a long time, Western nations have dominated the process of setting international trade and economic rules. However, as developing countries grow, these existing rules increasingly fail to protect Western interests.
In response, Western nations, led by the United States, attempt to rewrite the rules in various ways, squeezing the development space and opportunities available to emerging economies.
In intellectual property, the United States and the West aggressively pushed for negotiations on the Agreement on Trade-Related Aspects of Intellectual Property (IP) Rights in the 1980s and 1990s, pressuring developing countries to adopt the stringent IP protection standards of developed nations.
In January 2023, the United States enacted the Protecting American Intellectual Property Act of 2022, expanding the scope and enforcement of IP protections while enhancing unilateral sanctions as a tool.
Through these measures, the United States and its Western allies aim to maintain their long-term technological dominance, prevent advanced technologies from reaching developing countries, and obstruct the developing nations' path to industrial upgrading.
Regarding industrial policy, the United States has implemented large-scale, exclusive, and discriminatory measures to monopolize control over key industries and core technologies, undermining the existing global supply and industrial chains.
Legislation such as the Inflation Reduction Act and the CHIPS and Science Act have been introduced to ensure the United States retains its global leadership in high-tech sectors.
A major nickel-producing country, Indonesia imposed a nickel ore export ban in 2020 to boost its domestic industry. However, the European Union filed a complaint with the World Trade Organization (WTO) and won the case in a 2022 panel ruling. The Indonesian government criticized the EU for using WTO rules to stifle its development and filed an appeal.
Indonesia's appeal remains in limbo due to the paralysis of the WTO's Appellate Body, which the United States deliberately blocked.
The United States has repeatedly refused to approve the appointment of new judges, citing concerns over the body's handling of disputes, including the so-called overreach and inappropriate use of precedents.
DISTORTIONS & DIVISIONS
For developing countries that have managed to achieve industrial upgrading despite the constraints of Western standards and rules, the West leverages its dominance in global discourse to stigmatize these nations.
This serves as a pretext for further containment and suppression.
Chinese telecom company Huawei is a prime example of a victim of Western smear campaigns. The company gained a competitive edge in the global telecom market through the value and affordability of its products.
However, as Huawei's Western peers struggled to compete under fair market conditions, the United States and other Western countries fabricated claims that Huawei's products posed a "national security threat."
They aggressively discouraged their own countries and allies from purchasing Huawei products and introduced a series of sanctions against the company.
Furthermore, as China has seen fast developments in sectors such as electric vehicles, wind power, and solar energy, the United States and other Western countries started to accuse China of "overcapacity." They claimed that China's green energy industries are disrupting and threatening international markets while imposing heavy tariffs on related Chinese products.
The fact is that considering the pressing need to address climate change, there is a clear global shortage of high-quality green energy capacity, not an oversupply.
Statistics show that China has engaged in green energy cooperation with over 100 countries and regions, and its wind and solar products have been exported to more than 200 countries and regions worldwide, significantly improving access to green technologies.
"Politicians who want to restrict a nation like China, which provides green technology at low cost and high quality in areas like EVs and solar batteries, that is purely a political agenda that makes no sense from an economic comparative advantage point of view," said U.S. economist Stephen Roach.
BREAKING FREE
Despite the various strategies employed by the United States and other Western nations to block the industrial upgrading of Global South countries, these nations are not destined to remain at the lower end of the global value chain forever.
They possess the ability, the need, and the right to climb toward the higher tiers of industrial development. To break free from the low-end locks imposed by the West, more and more Global South countries are leveraging their resources, population, and market advantages.
Despite a temporary setback in Indonesia's nickel export ban dispute with the EU, the country has not abandoned its efforts to upgrade its nickel industry.
In recent years, the Indonesian government has introduced policies encouraging foreign companies to build nickel smelters locally, focusing on developing batteries, nickel alloys, and stainless steel, significantly reducing reliance on raw nickel ore exports.
Official data shows that Indonesia's nickel-derived export revenue surged from 4.31 billion U.S. dollars in 2017 to 34.44 billion dollars in 2023.
"Jakarta's insistence on moving up the nickel value chain has been so successful," said Cary Springfield, a columnist for the International Banker.
Other resource-rich Global South nations are following a similar path.
Burkina Faso, one of Africa's major gold producers, began constructing its first gold refinery at the end of last year. In recent years, Cote d'Ivoire, Africa's largest natural rubber producer, has been attracting foreign investment and technologies to increase production and processing capacity.
Meanwhile, Bolivia, Chile, and Argentina are rapidly advancing their lithium industry by developing innovative extraction techniques and building lithium carbonate plants to enhance the added value of their lithium products.
At the same time, Global South countries are strengthening cooperation to bolster their technological capabilities and industrial development.
In multilateral mechanisms such as the United Nations and the G20, Global South nations are aligning their efforts, while regional organizations such as the Association of Southeast Asian Nations, the African Union, and the Community of Latin American and Caribbean States (CELAC) play vital roles in fostering regional cooperation.
The BRICS group and the Shanghai Cooperation Organization are attracting more Global South countries and expanding their influence. Through South-South cooperation, the Global South is witnessing industrial upgrading.
For example, the African Export-Import Bank has partnered with Cote d'Ivoire, Ghana, and Cameroon on the Africa Cocoa Initiative, which seeks to shift cocoa exports from raw materials to intermediate products like cocoa powder. This initiative is now being expanded to other products like cotton and cashews.■
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