Effects of Globalization on China - Research Paper Example

? Number] Effects of Globalization on China Globalization – The concept Globalization is a broad termthat refers to the elimination of boundaries between the nations and creation of single global economy. It allows the flow of goods, technology, people and capital across the borders. Now a day globalization has become the core objective trend adopted for the promotion of the economic development all over the world. It allows optimized allocation and free flow of goods, technology and capital. It is the process of increased integration between countries, societies and economies due to which there is increased and strong impact of international influences upon the lives and economic activities of the people of different countries (Fung et al, p102). Due to increased practice of globalization values, the interaction between the countries has significantly increased and strong. None of the country could survive and prosper today without following the trend of globalization. The countries with great realization about the importance of adopting globalization are progressing significantly and experiencing positive changes within their economic and social scenarios. Globalization allows the countries to enter the world of free market, liberalized trade and market oriented businesses marked with intensified competition and great interdependence. Changed Brought by Globalization Today each and every country is experiencing the strong impacts of globalization in some way or another. The increased and strong interaction between the countries is making the economies of the involved countries stronger because they exchange technology, goods and capital and flourish their economic developments with the help of FDI and advanced technologies attained from the other countries (Fung et al, p102). The countries all over the world have realized that the economic development, progress and flourishing economies could be attained only through opening the country for the foreign investors and integrating with other economics of the world. This realization led to the creation of exchanged and cooperation units with the other countries that not only result in economic development but the involved countries also experience the fine results of the human civilization (Chen and Yao. p54). In order to cope with the changes and challenges pose by globalization it has become imperative for the countries all over the world to foster coordination and cooperation so that they could survive in the highly competitive market place of today and keep them aligned with the new rules and regulations of the global economy (Nolan, p52). The countries succeed to proceed with the strategies, planning and policies of integrated economy flourish in the new situation whereas the countries fail to integrate with the word economy lag behind the other countries. The changing scenario created by globalization is full of opportunities as well as challenges for the countries across the globe (Guthrie, p54). The Chinese Experience Located in the Asian continent Chine is the highest populated country of the world. The country is experiencing the fastest pace of economic growth that is mainly backed by globalization. With no exception China has also experienced major changes within its economic landscape after the evolution of globalization. Cross border trade was practiced by China several centuries ago when trade took place between Han Chinese and their neighbours through the Silk Route. China opened its door for the European trade since the Portuguese established ports in Macao during th sixteenth century (Scupin, p325). The impacts of globalization upon China could be traced in accordance with different aspects of economic activities like foreign trade, finance, environment, lifestyles and quality of life (Guthrie, p54). Chine has shown great awareness towards the importance of globalization. It has learnt that the long history of isolation gave it nothing but backwardness and after this realization there are positive signs of changes within the Chinese policies that eventually contribute towards making China an attractive destination for the investors of the world (Chen and Yao. p54). The essay aims to discuss the impacts of globalization upon China and describes the major changes brought by globalization in to the economic system of the country. The essay also discusses the role of globalization in fostering the economic growth of china over the last few decades (Liu, p93). Globalization Impact upon Chinese Economy Globalization has drawn far reaching impacts upon the economy of China. The international trade volume of china has expended almost 16 times during the last twenty years due to which it has moved from the 32nd to 7th position in the world trade ranking. The trade dependency rate has also increased from 10% to 36% whereas the FDI inflows to Chine have become the largest among all the other developing nations of the world. The increasing integration of China with the economies of the others countries has improved the Chinese economic structure because of speeding up of the market economy establishment and rise in the level of the corporate governance, optimization of human resource and increased technology adoptability and usage (Fung et al, p102). Due to the trade liberalization measures taken by China, the World Trade Organization (WTO) has also granted it the membership for which china was lobbying for over 15 years. Chinese government has taken series of strategic actions and policies in order to address the challenges of the global economy. They have readjusted their economic structure, speeded the development and expansion of the high technology sector, promoted the IT education and have also developed the outward oriented economy through liberalized strategies. As a result of these measures, Chinese economy has well integrated with the international economy and the structure of the economic system in China has also improved over the decades (Chen and Yao. p54). Different sectors of Chinese economy have changed the pace of development after the adaptation of the globalization trend. For instance, the banking sector of China was marked with inefficient and weak structure before the liberalization of trade and foreign policy however; globalization has made the Chinese banking sector efficient and competitive with the banking sectors of the other countries of the world. The Chinese banks have now improved their standard to match with the banking standards of the global economy and now the banking sector also attracts foreign investments. Investments The economy of China is fuelled by increased foreign investment in different sectors that are opened for the investors of the world. The labour rates and manufacturing cost is relatively low in Chine due to which most of the countries enter china for the manufacturing of different goods and commodities. Since, the foreign companies are encouraged to invest in Chine many international companies found China as perfect and profitable destination for their investment due to low labour and manufacturing cost. The level of personal saving was always high in China due to lack of adequate social safety net however, after the increase of the global economic activities the overall income is also increased causing further rise in the amount of the personal savings. Eventually there are more investments in the banks as compared with the other sectors and more capital is available to the state for different projects. The first stock market was established in Shanghai and then in Shenzhen after the economic boost in 1990 and 1991. These stock markets provide structure and procedures of investment to the domestic and foreign investors due to which the economic growth rate is further improved (Guthrie, p54). Chinese Trade Scenario Globalization encourages international trading as well as economic growth. Over the last few years there is dramatic increase in the average trade level of China. China has improved its trade scenario by removing trade barriers due to which the international community is attracted towards China. Foreign trade refers to the flow of goods across the national borders of a country. Foreign trade has been encouraged by China since 1978 when the government decided to open its door for the foreign traders by eliminating the trade restrictions and tariff limitations (Liu, p93). The amount of FDI has considerably increased in China because there are many projects initiated by the foreign investors in the country and due to cheap labour and low manufacturing cost companies are looking for Chinese firms for the manufacturing of their products. Eventually, the industrial and manufacturing infrastructure of the country has significantly improved because the foreign companies have also brought new technologies and ideas of manufacturing to China (Guthrie, p54). Social and Environmental Issues The increase in the international trade operations have resulted in increased amount of investments flow due to which not only the economic situation has improved but the social landscape has also changed because people are experiencing better quality of life due to flourishing economy. The growth per year has significantly increased over the last decades in China due to which the average income has also increased. Eventually the standard of living and life quality of the Chinese people has also improved. The overall education level also went on rising in the country whereas the decline in the poverty rate has also been observed. The social structure of china has also changed taking the effects of globalization. Over the last few decades china has significantly reduced its poverty rates (Fung et al, p102). Though most of the effects of globalization are very positive and constructive for China but there is also a dark side of the picture that tells about some negative consequences of globalization experienced by some people and classes in China the significant pace of economic growth and development has bestowed many benefits but there benefits are not availed by all the people in the country. The outcomes of the global economic participation is enjoyed by certain class of people and according to the estimate 10% of the Chinese rich population living in the coastal areas own almost 45% of the nation’s wealth (Fung et al, p102). The poor 10% population has only 1.4% of the national wealth that indicates massive inequality within the Chinese society. Due to this uneven distribution of wealth, the gap between the rich and the poor has widened and the situation demands the formulation of the policies for promoting equality within the society. Moreover, the increased manufacturing activities are also harming the environment and people are having problems in getting pure water for drinking purpose. As per estimated almost 20% of people in China drink contaminated water whereas the issue of waste disposition and treatment of sewage also calls for immediate government action (Liu, p93). Conclusion The above discussion unveils some of the importance aspects of the globalization effects on China. It is found that globalization has transformed the Chinese economy and society because the liberalized policies and open economy has invited investments and businesses from all over the world to China. The increased volume of international trade, foreign investment and manufacturing has strengthened the Chinese economy. Many sectors of Chinese economy like banking, manufacturing and industrial sector have significantly improved taking the effects of globalization however, there is essential need that these Chinese government must look at the issues of social inequity and environmental pollution to limit the disadvantages of globalization upon Chinese environment and society. Work Cited Doug Guthrie. China and Globalization: The Social, Economic and Political Transformation of Chinese Society. London: Taylor & Francis, 2009 Hung-Gay Fung, Changhong Pei, Kevin H. Zhang. China and the Challenge of Economic Globalization: The Impact Of WTO Membership, NY: M.E. Sharpe, 2006 Kang Liu. Globalization and Cultural Trends in China. US: University of Hawaii Press, 2004 Jian Chen, Shujie Yao. Globalization, Competition and Growth in China. London: Routledge, 2006 Peter Nolan. Transforming China: Globalization, Transition and Development. NJ: Anthem Press, 2004 Raymond Scupin, Cultural Anthropology - A Global Perspective. UK: Pearson, 2012 Read More