Globalization refers to the process of increased integration between different economies around the world and the increased impact of international influences on all aspects of life and economic activity. The four main indicators of globalization include: international trade flows, international financial flows, international investment flows and the transfer of technology, as well as the movement of labour between countries. Mao Tse Tung’s successor, Deng Xiao Ping, implemented a range of radical economic reforms that transformed China into an economy with a domestic focus to one with an international focus. Since becoming integrated within the global economy, China has become a bastion of ...view middle of the document...
China’s HDI has increased from 0.588 in 1980 to 0.777 in 2007, representing a significant improvement in the Chinese quality of life. The Chinese government introduced a one-child policy to ensure that China’s population growth became more sustainable, thus maximising China’s GDP per capita. Moreover, there has been a substantial reduction in poverty since 1979, with 300 million people no longer living below the poverty line.
However, globalisation has come at a cost to the environment. For example, there is some concern that China has pursued unsustainable production methods in its drive for economic growth. Air and water pollution, depletion of soil fertility, deforestation and loss of arable land are all very real environmental issues facing China at the moment. Each year more than 500,000 acres of arable land is turned into construction and urban development projects, while China is currently the second largest carbon dioxide emitter in the world.
Nevertheless, global pressure, namely from the World Trade Organisation and the World Olympic Committee, has prompted the Chinese government’s response to these environmental challenges. The three gorges dam project will reduce China’s dependence on coal and increase the employment rate. In addition, the Chinese government is attempting to help the environment by setting pollution emission targets and banning logging in some parts of the country.
Globalization has positively affected China’s trade flows; since becoming a member of WTO, it has become the third largest trading goods country in the world. As part of its WTO commitments China was forced to reduce protection, specifically tariffs. Which is used for China in order to encouraged greater domestic efficiency through import competition. China’s average tariff rate was cut from 32% to 19% by 1996 and was scheduled to fall to 15% in 2000. These cuts in import protection supported China’s drive to attract foreign goods and lead to increased efficiency in China’s economy. Overall the active pursuit of WTO membership and ASEAN has benefited China greatly in three main ways; it has promoted China’s stability in China’s external relationship, given China greater access to global production and distribution networks, led to restructuring of industries, modernization of corporate structures by increasing competition. Further strategic coastal placement of the SEZ in China improved China’s access to international trade routes.
As a result of globalisation, TNCs have influenced the composition and direction of China’s trade flows. With factory wages averaging less than 5% of those in the U.S. TNCs were attracted to China’s large unskilled labour force during the 1990s. Since then, the composition of China’s exports has changed from mainly agricultural goods to manufactured goods so as to take advantage of China’s competitive advantage in that area of production. Nowadays, China accounts for 5% of world merchandise trade, up from 2%. Also, as a...
