Why is China Promoting Economic Globalization? A Leadership Theory of Globalization

Abstract

This article proposes a leadership theory of globalization to explain how economic globalization occurs and evolves, and why China wants to take a leading role in globalization. The theory posits that an economy equipped with advanced industrial technology, a substantial domestic market, and robust institutional capacity is more likely to take the lead in driving economic globalization. Technological advantages in high-tech industries position an economy favorably within the global value chains, maximizing its benefits from economic globalization. A large domestic market can entice other countries to agree to open their markets reciprocally. Institutional capacity enables governments to deter opposition to globalization from those disadvantaged by economic opening. This paper presents studies of historical cases of economic globalization and provides a three-stage model of globalization. It argues that China has been gaining on three fronts in recent decades and is therefore willing to promote economic globalization.