Discuss the impact of globalisation on one or more economies,
with reference to economic development and environmental
consequences.
Globalisation is the increasing economic integration of many domestic economies,
including the increased integration of domestic markets into global markets. The rate
of globalisation rapidly increased in the 1980’s, resulting in a number of positive and
negative impacts on nations. Globalisation has had a major impact on China’s
economy in the last few years, especially since its ‘opening up to the world’ period in
1979, and even more so after its entry into the World Trade Organization (WTO) in
2001. The areas in which globalisation has had a great impact upon China are in its
entry into the WTO and international convergence, economic growth, economic
development and quality of life, unemployment, trade flows, Foreign Direct
Investment (FDI) and Transnational Corporations (TNC’s), distribution of income,
environmental externalities, market failure, and impacts of the international business
cycle. good
Globalisation has impacted on China through its entry into the WTO in 2001, which
came after 15 years of lobbying. Globalisation has increased the importance of the
WTO’s functions and policies, making it essential for China to gain membership in
order to reap all of globalisations benefits. China now has to comply with the WTO’s
rules and agreements, and faces pressure to comply with its stance of trade
liberalisation. This trade liberalisation, along with greater access and links to global
markets (also due to membership), has helped China to increase its trade flows. Also,
China’s WTO membership along with its “opening to the world” policy has greatly
encouraged FDI and TNC’s to China. Finally, the WTO’s influence has resulted in
international convergence as economic systems throughout the world move towards
more market based systems. This can be seen in China as it has moved from being a
planned economy, to that of a socialist market. Part of this international convergence
has been a series of market-based reforms, resulting in greater resource efficiency,
economic growth, and the spread of legal principles promoting greater personal
freedom. Read the question again and only write to it
Countries who embrace globalisation tend to experience much higher rates of
economic growth than those who do not. Increased world gross product has impacted
positively on China, whose economic growth rate averaged 11% throughout the
1990’s. During this time China was also experiencing a low inflation rate and a trade
surplus, contributing to its overall growth. In China, rapid urbanisation through
what?????? has stimulated the construction of infrastructure, and consumer demand
has increased by 10.1% since 2001. Since 2001 industrial production has also
increased by 15%, mainly due to the expansion of China’s car and steel industries. As
a developing country, globalisation has caused China’s production to shift from
agriculture towards manufacturing and services, with agriculture as a percentage of
GDP down from 23% in 1997 to 13% in 2003. Services have risen from 29% in 1997
to 34% in 2003, and manufacturing is up from 48% in 1997 to 53% in 2003. good
This shift in services has been partially due to an increase in tourism, whilst the
increase in manufacturing has resulted in an increased reliance on elaborately
transformed manufactures (rather than on STM’s), which has broadened China’s
export base and has increased the range of goods available to its people. Although
China has been a driving force of economic growth in its region, it has also been
blamed for some regional deflation due to a surplus in manufactured electronics. In
2004 China’s economic growth rate was recorded at 9.5%. good
Globalisation also impacts on economic development and the quality of life within
economies. In China improvements in the general quality of life are clearly visible,
link it back to the question with China’s Human Development Index rising from 0.554
in the 1980’s, to 0.625 in the 1990’s, to 0.726 in 2003. Since the ‘opening up’ period
of China, which began in 1979, poverty has been reduced on a large scale, with 400
million people rising above the US$1 a day poverty measure. Even so, economic
development has not been equal across China with vast differences between
rural/urban areas, eastern/western provinces, and males and females. Urban incomes
have risen from 8.5% in 2002 (US$ 828) whilst rural incomes have risen by 5.7%
(US$ 211). China’s increased growth rate means per capita incomes are now rising
faster than those in developed countries. China’s life expectancy has risen from 69.7
in 1997 to 70.3 in 2003, and infant mortality has fallen from 35 per 1000 births (1997)
to 32 per 1000 (2003). Illiteracy rates have also fallen, males from 9.8% to 7.9% (9703) and females from 33.1% to 22.9% (97-03). Greater international visibility and
participation has encouraged better human rights, particularly with China improving
its judicial system so that detention without trial will no longer occur. It is hoped that
further international visibility will continue to improve human rights in the future. A
final impact of globalisation on living standards is the merging of the world’s
cultures. This may lead to a loss of languages, foods, and customs.
Refer back to question, show links to question in this para Unemployment has proved
to be China’s most severe challenge. In 1997 the unemployment rate stood at 3.1%,
by 2003 it had risen to 7.8%. This has been due to a number of reasons. As the result
of increased global economic exposure and a move towards a socialist market
economy, millions of SOE jobs have been cut. In 2001 alone 5.15 million people were
retrenched. The restructuring of the economy has led to the closure of many
inefficient industries. The shift from agriculture to manufacturing and services has
also been partly to blame, with 1.7 million agricultural jobs lost every year, although
this is beginning to be corrected with 1.6 million created in manufacturing and 7.6
million in services. Although at the end of 2003, 3.13 million people were still
receiving unemployment benefits. How does it answer the essay question
Globalisation has impacted upon China’s trade flows, resulting in 2003’s imports
rising by 40.5% to US$298.56 billion and exports rising by 32.3%. China’s net trade
volume also increased in 2003, by 7.5% on the previous year. In the past 10 years
China has managed to turn its CAD into a Current Account Surplus. China’s
membership to the WTO has encouraged trade liberalisation, which has helped China
to emerge as a major market for, and supplier of goods and services. This has led to
China now being ranked as the 3rd largest trading nation in the world. Ok but could
write it better
Another impact of globalisation on China has been increased financial flows due to
increased foreign direct investment, and transnational corporations. China’s entry into
the WTO in 2001, along with its ‘opening to the world’ policy have both worked to
actively promote FDI into China. This capital influx has stimulated strong growth in
China’s manufacturing sector, and has helped growth rates remain at 8-9%. In 2003
China approved 34000 new FDI projects and enterprises, causing FDI to rise 19% on
the previous year. Between 2006-10 China is forecast to attract approximately
US$100 billion annually. Good TNC’s are attracted to China due to its cheap labour,
and every year more and more jobs are being lost to China, particularly from Mexico,
Indonesia, and the Philippines. After moving its production facilities to China in
2000, Streets ice cream now manufactures all of its products in China. It has managed
to cut costs greatly, even though it now has to count shipping costs to Australia.
TNC’s also give China the benefit of greater access to improved technology due to the
spill over. Although, some say TNC’s are only enticed to developing countries with
incentives (e.g. cheap labour) that reduce the “trickle down” effect. The trickle down
effect is when higher income earners receive benefits from globalisation, and those
economic benefits ‘trickle down’ to lower income groups through their activities.
When TNC’s exploit workers, often with government support, any possible ‘trickle
down’ to the rest of the population is minimised.
Relate back to qn A negative impact that globalisation has had on China is that
income distribution has become more unequal. This is a result of the benefits of
globalisation, e.g. FDI, not being spread equally throughout China. Large differences
can be seen between rural and urban populations, as the Engel coefficient
demonstrates. Although both rural and urban Engel coefficients are 1.3% lower than
in 2002, urban stands at 37%, whilst rural is at 48%. This increasing economic
divergence is likely to result in economic and social imbalance, and potential
problems in the future.
What has this got to do with the qn WW Rostow’s ‘Stages of Economic
Development’ model says that countries go through five distinct stages of economic
development: traditional subsistence society; transitional stage; take off; drive to
maturity; and high mass consumption. Rostow also believes that during stage 4,
economies may sacrifice environmental quality in their pursuit of growth. There is
concern that China may pursue unsustainable practices in order to maximise its
globalisation opportunities. China’s increased industrial production is expected to lead
to poorer environmental quality. This can already be seen in South Eastern China, the
region of most industrial activity, with air pollution proving to be a particular
problem. Another example can be seen in the 3 Gorges dam project. This attempt to
generate hydroelectricity resulted in the flooding of potential world heritage areas.
There are also concerns that the decrease in soil fertility may result in China
becoming a net importer of food in years to come.
Whilst income inequality and environmental externalities are forms of market failure,
there is another type, which is when governments fail to provide all necessary
infrastructure to handle the economic growth and development taking place. An
example of this can be seen in China, in that blackouts are becoming increasingly
frequent. This is because the power grids can no longer cope with the fast pace of
urbanisation and the new economy, and the government is yet to do anything to fix
the problem. Too little on this
Finally globalisation negatively impacts upon China by making it subject to the
international business cycle. This increases its exposure to external shocks, and
increases the risk of capital flight due to greater financial flows.
In conclusion, globalisation has had an immense impact upon China’s economy, as
well as on its people. These impacts are bound to continue well into the future, and
will hopefully become positive for China, overall.
The question is not on china’s globalisation but only on ec dvlpt and envir
You need to read the question and write to the question.
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