The world is in a shroud of thick mist. At the time the Cold War ended, people around the world widely expected that globalization would make progress, the U.N.-centered order of peace would be maintained and market-economy-based global high growth would materialize. However, the ensuing reality has shown that the unifying force of the world order is reeling from United States' declining national power and that the global economic situation has become persistently unstable due to the economic stagnation and financial crisis in the U.S. and Europe.
Globalization has the potential to enhance mutual reliance, expand markets and, through heightened competition, facilitate growth in the world economy. But it can also result in the synchronization of business fluctuations and the expansion of the fluctuation range. Additionally, America's trade and budget deficits, which have amplified the global imbalance, have led the world into a global depression. Higher rates of world economic growth naturally causes rises in the demand for and the prices of natural resources, including energy, making global warming more serious. The responses of countries to these developments tend to intensify the conflicts of interest among them.
Globalization also has the potential to make level the world's economic structure. It is because newly emerging countries aspire for economic growth and enterprises that seek for global business transactions locate their operations in the markets where they can find favorable conditions regarding wages and costs. The evidence of this is that East Asian countries such as China and India have achieved rapid economic growth, boosting their standing in the world.