Three Globalizations Shaping the 21st Century

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Three Globalizations Shaping the 21st Century: Extensive, Intensive and Chinese Globalization

Current China–U.S. trade wars and negotiations are indicators of the emergence of this distinctive new globalization: Chinese globalization.

Ben Derudder & Peter J. Taylor (2020): Three Globalizations Shaping the Twenty-first Century: Understanding the New World Geography through Its Cities, Annals of the American Association of Geographers, DOI: 10.1080/24694452.2020.1727308

Since the election of Donald Trump, there has been an escalating trade war between China and the United States. With the spread of the COVID-19, countries across the world has practized a strict control of international travel. We also witness the diplomatic confrontations and the termination of several cultural and academic exchange programs between China and the United States, which have raised concerns about the future of U.S.-China relations and globalization. In March 2020, the Annals of the Association of American Geographers published " Three Globalizations Shaping the Twenty-first Century: Understanding the New World Geography through Its Cities," by Ben Derudder, Professor of Urban Geography at Ghent University, Belgium, and Peter Taylor, Emeritus Professor of Human Geography, UK.

Drawn on the conceptual and empirical findings from the study of world city networks, this paper discusses the three types of globalization that have shaped the 21st century: extensive globalization, intensive globalization, and Chinese globalization, analyzes and visualizes the geographic patterns of the world economy of the three types of globalization. This paper gathers the office network data of 175 of the world's largest productive service companies in 707 cities. It may provide some food for thoughts and insights into our understanding of the current tensions in the development of globalization.

Here is an edited excerpt from the paper.

There have been three phases of globalization epitomized in geography iconography as Mackinder’s (1904) “global closure,” Jones’s (1955) “global strategic view,” and Dicken’s (1986) “global shift.” These represent imperial globalization from the 1900s, U.S. globalization from the 1940s, and corporate globalization from the 1970s. The first globalization is signaled by the final throes of imperial territorial and trade expansions—as Wallerstein told it, the elimination of all other historical systems by the modern world system. The second globalization is the result of the post–World War II economic dominance of the United States that created a world in which its corporations could prosper. The third globalization has been enabled by the combination of the communication and computing industries facilitating corporate global organization—as Sassen told it, the complementary dispersion and concentration of economic activities. These three phases are not separate stages of development; rather, they are a sequence of powerful processes, each contested but ultimately prevailing. They overlap so that predecessors are encompassed; thus, important aspects of the first two can be found in today’s corporate globalization.

In this article we focus on today’s globalization as a multinational corporate production with a strong U.S. pedigree and imperial vestiges and ask the additional question whether a fourth phase of globalization is emerging, encompassing China as a key  player. Today, China’s unprecedented economic growth over the last four decades provides a fundamentally new input into globalization.

After World War II, the practice of U.S. globalization consisted of U.S. companies seeking markets and setting up branch factories to supply those markets and was premised on the creation of an international trading regime. The General Agreement on Trade and Tariffs was set up in 1947, followed by ongoing rounds of negotiations. Although pioneered by U.S. companies, new levels of economic control at a distance in the 1970s developed into a much broader economic geography, a new international division   of   labor  consolidated by a stronger international trading regime: the World Trade Organization, set up in 1992.

Thirty years ago, China’s role in global economic affairs beyond its immediate East Asian neighbors was decidedly minor. Post-Mao China, having changed its economic orientation in 1978, joined the World Trade Organization in 2002 and has since become the chief economic rival of the United States. Today, China’s expanding economic power has allowed it to extend its reach worldwide: It has pursued its own specific globalization to support its booming economy, including a corralling of resources across the Global South. Current China–U.S. trade negotiations are an indicator of the emergence of this distinctive new globalization, warranting research into its unfolding geography.

We treat corporate globalization from the perspective of cities insofar as they are central to the global networks that make large-scale economic processes possible. To this end, we retell the narrative of an unfolding globalization as reflected in the contemporary world city network created by the world’s largest producer services firms. We treat these global business services as the “indicator sector” for understanding current globalization dynamics. Thus, we have been able to identify three distinctive globalizations in 2018 through their cities—we call them extensive globalization, intensive globalization, and Chinese globalization, respectively—that reveal this unfolding urban economic geography. The first two globalizations have been recognized as key outcomes of unfolding processes in previous analyses; the identification of a major Chinese globalization is new. Of course, the increasing importance of Chinese cities in the global economy is well known—Table 1 shows the rise of the five main mainland Chinese cities in Globalization and World City rankings alongside Hong Kong for reference—but their constitution of a separate and very distinctive globalization outcome is a fresh finding. We argue that there are now three key globalizations shaping economic processes through cities in the twenty-first century. Our operational use of the term globalizations, therefore, refers to the main geographical patterns that can be discerned in the office net- works of the world’s largest producer services firms: They are the empirical sediments of different epochs that continue to exist and work in the present. The purpose of this article is to carefully specify and describe the urban geography of each of these globalizations to understand their broader meanings within today’s global economy.

This research construct data based on the advanced production service (APS) firms across the world. Our selection of APS firms is based on rankings of leading firms in five producer services sectors: seventy-five financial services firms, twenty-five management consultancy firms, twenty-five advertising firms, twenty-five law firms, and twenty-five accountancy firms. For each sector, the top-ranked firms were chosen. Cities were selected based on a number of overlapping criteria, including size (population), political status (capital cities), presence of (regional) headquarters functions in APS firms, and previous research. Our overall approach here has been to be as inclusive as possible, ensuring that there were no potential omissions as we recorded information. This led to the selection of 707 cities.

This article makes two arguments. First, these three globalizations incorporate a pattern that replicates the broader unfolding of globalization since the mid-twentieth century: The U.S. phase is represented today by extensive globalization, the consolidation phase by intensive globalization, and the latest phase by Chinese globalization.

Second, each globalization describes a specific urban process previously described in the world or global city literature: Friedmann’s (1986) world city hierarchy postulated on a world systems core–semi-periphery format is found in extensive globalization; Sassen’s (1991) global city thesis focusing on a select number of key cities is evident in intensive globalization; and the world impact of runaway Chinese urbanization as detailed by Wu (2007) and Ren (2013) is here detectable as Chinese globalization.

Extensive globalization is dominated by New York, with four Latin American cities sharing many of the same firms. This reflects the first commercial U.S. foreign expansion, an economic hemispheric focus mimicking the country’s traditional geopolitical “Monroe” sphere of influence. New York is also ranked first for intensive globalization but is here accompanied by very different like cities: its global partner London plus key U.S. cities from the east, center, and west of the country. Not unexpected, Chinese globalization features five Chinese cities, led by Beijing.

Extensive Globalization

This world map of places as service centers has a very distinctive character: It is dominated by capital cities of medium-sized countries (Latin America is a slight exception, with capitals of some quite small countries included as a Monroe legacy). The clue to what this means can be garnered from the non–capital city exceptions: Auckland, Dubai, Istanbul, and Lagos, which are the media centers of their respective countries.

Extensive globalization is extensive in its practice and facilitation but not in its control and command. This most common global location strategy is largely orchestrated in New York and London.

Intensive Globalization

Command and control of intensive globalization is hugely dominated by New York and London, which is strongly augmented by a cluster of other U.S. cities with headquarters functions. Sao Paulo continues to fly the flag for the Global South, but otherwise the remaining cities cluster in Western Europe with a scattering in the Pacific Rim. In summary, intensive globalization is a very U.S. product with a London adjunct.

Chinese Globalization

The headquarters function in China is a very primate one focused on Beijing. Only four other Chinese cities are included. In fact, after Beijing there are a majority (seven) of non-Chinese cities. This indicates that Chinese globalization is not just being produced by Chinese firms but that there are non-Chinese service firms also contributing to a Chinese globalization strategy.

Although the Belt and Road Initiative does indeed reflects China’s rise as a global power, it also recognizes the need for intensifying and broadening this global power by means of industrial redeployment, increased outward investment, and a need to diversify energy sources and routes to secure and solidify China’s connections.

Concluding remarks

We have located cities in multiple, overlapping, and intricate patterns of place, network, and command. The key to this exercise has been thinking in terms of processes unfolding—shown by the presence of a Chinese globalization to match its cities’ rising connectivity.

Thus, we have not weighed the differences between Friedmann’s world city thesis and Sassen’s global city thesis and chosen a preferred model. Rather, we have treated each as a different process so that both can be investigated within our large-scale data analysis. This thinking operates further in our actual treatment of cities. They are self-evidently a cacophony of processes, and each city can therefore encompass more than one role. Hence New York is a global city in Sassen’s terms to be sure, but it is much more than that even when dealing with just globalization: We have shown its importance in Friedmann’s hierarchical process and its inclusion in the more recent Chinese global urban process.

Unfolding from previous global geographies, these three globalizations look likely to dominate the economic urban geography in coming decades. We have provided a detailed description of these three processes that between them provide the mechanism, a network infrastructure, to enable the reproduction of corporate globalization.

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