Globalisation and Asia - Essay Example

?Introduction Globalization is a very diverse term and can include different aspects such as economic, social as well as technological- all potentially highlighting the role played by globalization in integrating different countries and societies with each other. Traditionally, globalization has been defined as the process wherein the societies and economies have been integrated with each other due to the improvements taking place in communication, trade as well as transportation. Due to this improvement, the political and economic ideologies of the different countries- especially that of US- has been accepted or merged with the local ideologies of other countries and therefore West has became dominant thought in these societies. Hong Kong is now the fourth largest city of China- after its accession with China- and also boasts as one of the liberal as well as transparent economic systems in the region. Parting with other economic regions of China, Hong Kong has now become one of the vibrant societies with lot of Western characteristics to share with other countries in the region. Similarly, China as a whole has also became probably the leading country in the world which is being economically integrated with the rest of the world due to sheer power of its economic strength and size. How these economies i.e. Hong Kong and India have integrated into the world economy and to what degree they are successful in integrating with the world economy is one of the questions, this research paper will attempt to discuss with the help of the relevant theories and data. Globalization In simplicity, globalization may be defined as the creation of a single market or the integration of world markets however, on the whole, defining the overall process of globalization is quite complex. “Globalization can be conceived as a process (or set of processes) which embodies a transformation in the spatial organization of social relations and transactions, expressed in transcontinental or interregional flows and networks of activity, interaction and power”(Held& Mcgraw, 1999). The above definition of globalization suggests that globalization is a process which is based upon the transformation of the social relations. However, this transformation or change takes place in different phases or stages and the subsequent integration of any given society through the process of globalization follows this phased process. The first stage of integration comes when the political, economic as well as the social ideas are stretched followed by the intensification of the interconnectedness between the investment, trade and other variables. The third stage comes when this overall process of integration speeds up this interconnectedness with the world economies due to the rapid transformation in the communication technologies. In the final phase, this growing degree of the integration creates the so called deepening impact on the social and economic aspects of the societies which have gradually been integrated with the world economy or the markets. it is also important to note that the globalization, is also associated with the slow and gradual vanishing of the State and its role in managing the markets specially. It advocates the emergence of borderless world and often claims to end the sovereignty of the State and the economies. What is also significant to note that it has also been associated with the Westernization of the different societies? It is generally believed that the process of globalization will result into the Westernization of the societies and the ideologies of Western countries specially US will gradually take over other societies. It simply means that the value system of America will eventually take over the values and belief systems of other countries and societies. Measurement of globalization Globalization and its impact on any given society is measured with the help of different measures which typically outline the overall degree of integration of any given economy in the world economy. These factors include: Flows: Flows include trade, foreign direct investment, the transition or migration of the labor across the market as well as the flow of knowledge and the technology. Market integration Market integration is another measure which can help to measure the degree of globalization in any given economy. Market integration includes the price i.e. whether the prices are same and cyclical sensitivity. However, despite the availability of different measures to measure the integration of economies with the world economy, there are different barriers to the measurement including the State controls on the movements of goods, labor and capital because some non-State oriented barriers such as lack of sophistication of the transport services in any given economy. Based on this discussion, the following sections will discuss the integration of Hong Kong and India in the world economy. Integration of Hong Kong in the World Economy The overall ethnic composition of Hong Kong suggests that 95% of the population is Chinese whereas only 5% of the population belongs to different ethnic groups. Hong Kong was officially re-affiliated with China in 1997 and due to advancement; it is one of the wealthiest cities in China and has became most important destinations for Chinese from mainland China. It is also important to note that Hong Kong became part of the world economy much before its accession with China and was dubbed as the global city of the world. Thus in order to understand the overall integration of Hong Kong with the world economy, it is important to discuss its historical past as the British colony in order to understand as to how the transition from one political system to another has actually affected the process of globalization in Hong Kong. In 2010, Hong Kong was reported as the fourth largest regions in the world to achieve the higher foreign direct investment.( Wong, 2010). Since more than a decade, Hong Kong is one of the top five regions in the world to achieve the constantly higher in-flow of foreign direct investment after the mainland China. It is also important to note that according to one report, Hong Kong is considered as the top city in the world on the globalization index surpassing Singapore as the leading regions in the world to be on top of the globalization index. According to the figures available for 2009, the FDI inflows in Hong Kong represent a share of more than 30% in the total inflows to the Asia. (Hennigan, 2011). Such high inflow of foreign direct investment suggests that the Hong Kong is probably the only region in Asia which is enjoying its previous status as the world’s global city despite its reunification with mainland China in 1997. According to the report published by Ernest and Young, Hong Kong tops the globalization index in terms of trade, capital, technology, labor as well as the culture. It is also important to note that the financial markets of Hong Kong are considered as more liquid with minimum barriers of entry. It is because of this reason that the financial market in Hong Kong is a connected network of global financial institutions providing an international launching pad for the global institutions to serve the international markets and customers. The degree of integration of Hong Kong can also be measured by the fact that banks in Hong Kong control and hold more than US$400 Billions of assets. Hong Kong is also one of the leading exporters of the services in the global economy which has became possible owing to the flow of better and more sophisticated flow of the technology in the region. (Lam, 2002). The above discussion suggests that Hong Kong is probably the only city in the world which is fully integrated with the world economy. Integration of India The case of India is relatively different in terms of its integration with the world economy because it has potentially entered into this arena through its sheer power of technological improvement. India is one of the leading hubs for information technology in the world and its integration into the world economy is also a direct and indirect result of this improvement. It is generally argued that the integration of India in the world economy is limited as compared to other countries in the region such as Japan, China and Hong Kong. However, recent figures suggest that the India’s foreign trade as percentage of its GDP is gradually increasing in goods and services. This slow and gradual increase in the foreign trade suggests that the India might be on its way towards achieving the broader integration with the world economy. (Nayar, 2006). The recent economic performance of India has placed in the club of BRIC where it shared its economic stature with the countries like China and Brazil as one of the leading economies in the world which are fast becoming the new trading hubs in the world. According to the latest figures, the FDI flows in India from 2000 to November 2010 amounts to US $ 1,86,792 millions suggesting a marked increase in the overall flow of the investment into the country. This has however, been mostly in terms of investment into I.T. wherein leading organizations of the world have opened their call centers, research and development facilities and other information technology related projects. Barriers to the integration Since Hong Kong is already an integrated region in the world economy however, its political re-unification with China may be considered as one of the reasons for the State related barriers. Since China essentially remains one of the strongest socialist countries in the world, the overall change in the political attitude can remain one of the significant barriers. (Camdessus,1997). Thus the reunification of Hong Kong therefore can create significant bureaucratic hurdles in its overall economic integration owing to the change in the way region was governed. Further the true integration in terms of market integration as well as the access to the markets may become one of the leading issues in the future because of the overall policy adapted by the Chinese government. Though the China has successfully integrated into the world economy however, it only allows the international organizations to enter the market through the formation of partnerships with the local partners. The case of India is also the same where the government is still not that much open to the international players. (Biswas, 2006). Further, despite the fact that India is one of the largest countries in the world however, it has only been able to realize the economic power of its technological sophistication. India’s integration into the world economy therefore is limited to few sectors and India need to further expand its based to allow the further integration in sectors such as financial services, manufacturing as well as other services. References 1. Biswas, S (2006). India warning on globalisation [online]. [Accessed Jan 31, 2011]. Available from: http://news.bbc.co.uk/1/hi/world/south_asia/6195617.stm 2. Camdessus, M (1997). Globalization and Asia: The Challenges for Regional Cooperation and the Implications for Hong Kong [online]. [Accessed Feb, 01, 2011]. Available from: . 3. Common, R (2001). GLOBALISATION AND URBAN GOVERNMENT: NEW PERSPECTIVES ON THE LOCAL POLITICS OF GLOBAL CITY FORMULATION [online]. [Accessed Feb 01, 2011]. Available from: http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan007492.pdf 4. Dreher, A (2003). Does Globalization Affect Growth? [online]. [Accessed Jan 31, 2011]. Available from: . 5. Ernst & Yong (2011). 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