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See reqiurmence - Essay Example

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Impact of Globalization on Chinese Economy Introduction In topical times it is widely believed that globalization has benefited largely the economy of China in terms of increase in GDP growth rate. The local firms are expanding and becoming powerful while the nation is fast transforming into a strong economy via industrialization…
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Download file to see previous pages Before embarking upon the discussion a brief look into the background would be helpful. The famous Silk Road paved the way for the Chinese goods that mainly consisted, silk, printed paper, gun powder and compass. Not only those are goods but ground breaking inventions that held the Chinese head high at the global arena (Whitfield, 2004). The communist government was established in China in 1949 and China entered a prolonged phase of social and economic restructuring till 1977 (MacKerras & Yorke, 1991, p.81). This phase is characterized by meager economic exchange. (Bell, Khor & Khochar, 1993). The reflection of globalization is almost everywhere, however for simplicity only four variables are considered in this paper; agriculture, Industry, International trade and foreign direct investment. Again a coin has two faces so as globalization. The paper analyses the impact of globalization on the Chinese economy. It means that the all or none policy while judging the impact of globalization on Chinese economy would be faulty and far from the actual reality. Statistical overview The following table summarizes the growth rates of the agriculture, industry and trade pre and post reform period. This gives a brief picture regarding the impact of globalization in terms of figures on the Chinese economy: table 1: Annual growth rates of China's economy 1970-2010 (%)   pre-reform 1970-78 Reform period   1970-78 1979-84 1985-95 1996-00 2001-05 2006-10 GDP 4.9 8.8 9.7 8.2 9.9 11.1 Agriculture 2.7 7.1 4 3.4 4.3 4.5 Industry 6.8 8.2 12.8 9.6 11.4 11.9 Service n.a. 11.6 9.7 8.3 10.1 11.9 Foreign Trade 20.5 14.3 15.2 9.8 25.3 13.8 Import   12.7 13.4 9.5 24.9 14.2 Export   15.9 17.2 10.1 25.7 13.5 Population 1.8 1.4 1.37 0.91 0.63 0.5 Per capita GDP 3.1 7.4 8.3 7.2 9 10.6 (Huang, Wang and Qiu, 2012, p.5) The financial crisis of 2008 accounts for the lower annual growth rates of foreign trade, imports and exports for the period 2006-2010, but China managed to be consistent in terms of GDP rate and the domestic sectors. Agriculture The initial impact of globalization on Chinese agriculture might be summarized as the transformation from collectivization to individual household responsibility. Improved form of agricultural procedures was introduced with chemical fertilizers and pesticides, machineries were welcomed and that brought a huge growth in agricultural output and in rural income. However this success was short lived and by mid 80’s rural economic growth had achieved its ceiling. By the end of the decade and the beginning of the next one stagnation and a step ahead degeneration became the trademark of Chinese rural area. As agriculture is the prime profession of the rural people it also serves as a dummy for the agricultural sector that was subject to the same problem. To raise agricultural production, deforestation took place at an unprecedented level and impacted the environment. Soon the rural household felt the brunt of rising price of machinery, fertilizers and pesticides and resorted to their initial way of farming that gave rise to pseudo unemployment. Apart from that, globalization exposed the farmers to market price fluctuations. Along with ...Download file to see next pages Read More
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