HONG KONG -- In the previous article in this series, I asked whether capitalism would be sustainable into the 21st century. In the article before that, I emphasized that never had the world seen so many democracies, but warned that there were risks that the conditions for maintaining the momentum of global democratization would not be met. Another crucial question that needs to be asked -- the answer to which will have a significant bearing on the other two -- is whether free trade in global markets can be developed, indeed enhanced. In Greater China (China, Taiwan and Hong Kong) that is a matter of enormous importance.
Free trade is still a long way off. Protectionism remains strong, especially in the discrimination practiced by industrialized countries against the exports of developing countries, for example in agricultural goods and textiles. There is a great deal of protectionism among developing countries. This maze of trade barriers is a primary culprit in the prevalence of poverty around the world.
Protectionism is also practiced in the cross-border movement of people and labor markets generally. If Nokia makes a cheaper and better mobile phone than an Indonesian manufacturer, it can sell its product in the Indonesian market. Everyone benefits: the Indonesian consumer from having a better and cheaper product, Nokia by the profits it makes in the Indonesian market. However, if an Indonesian can offer a cheaper service through his labor in the European Union, it will be very difficult for him to do so.