Globalization, which is the process of enabling financial and investment markets to be operated widely and internationally, usually refers to the increasing global relationships of culture, people, and economic activities (Simon. J, 2002). It is generally used to represent economic globalization including the global distribution of the production of goods and services, through reduction of barriers to international trade such as export fees, and import quotas.
Globalization has become one of the most talked about debates of the past 10 years and as been the subject of numerous books and videos and the cause of many global demonstrations in most of the major cities all over the world” (Simon. J, 2002). This essay will first describe the background and situation of China with the effect of globalization. Then it will evaluate the positive and negative effects of globalization in China. Finally, there will be a conclusion about the globalization in China. China has shocked the world over the last two decades with a rapid growth and globalization has played an key role during the period.
Dauderstadt M, (2005) commented that China had become the world’s economic power-house but still needed years to become the world’s largest economy even though it already ranked second after the USA by being measured in purchasing power parity(PPP). However, before reform, China was a world’s well-known opponent of globalization. At that time, it opposed both global economic and political orders. Furthermore, it refused to cooperate with the major global institutions such as the IMF and the World Bank. Till 1966 when the Cultural Revolution happened, China started setting foot on the way to globalization.
After carrying out the policy of reformation and opening under the guidance of Deng Xiaoping, China realised the necessity of globalization. Globalization has made a significant positive effect on China’s economy so that people have a totally different life in modern cities today. China is a developing country. And with the process of reformation and opening and in-depth socialistic modernisation, China is becoming increasingly closer to the world’s whole economy. To be sure, globalization has three main positive effects on China. First of all, globalization ontributes to attracting foreign investment for the opening to the whole world. For western countries, China’s development has provided a huge market for them.
At present, China has become one of the world’s biggest investment countries via foreign trade, and basically it is a country with complete inflow of capital. Second, globalization helps with the expansion of external trade. With more than 20 years’ efforts, external trade has become an important increasing point of China’s domestic economy. Overholt (2005) commented that about a quarter of economic growth every year depends on the external trade with China.
Third, globalization is helpful with absorbing rural surplus labour force (Dauderstadt M, 2005). So far, China is still a less-developed country with a large population. In the process of industrialisation, large rural population and surplus labour force are a serious problem to solve all the time. However, in recent years, the success of a great many township enterprises and the development of joint ventures have brought a chance to transfer rural labour force. Compared with creating opportunities, globalization inevitably brings some challenges as well. Some of them are already evident, and some have not yet fully exposed.
Based on our understanding, there are four main aspects. First, globalization has created sections and spaces for developed countries to seek higher profits. With huge differences in economy, globalization has widened the gap of national income between developed countries and developing countries, which we are unlikely to lessen effectively during a period of time. Second, globalization can help developed countries to build the basis of international economy and trade with the centre of themselves. China will be put in a passive position in industrial development with their powerful economy and technology.
Zha (2003) demonstrated that although foreign capital can drive developments of some domains in China, it cannot drive the development of China’s whole industry. Third, globalization has strengthened economic transfer and synchronisation (Overholt, 2005). Large amount of idle fund from Western countries is likely to shock China’s financial market, and even trigger a financial crisis. Fourth, economic globalization helps Western developed countries to promote political globalization, and use political methods to control global economy. It becomes a big threat to China, which is a developing socialistic country.
In conclusion, globalization has made significant contributions to China’s economy, although it has several negative effects which might result in serious problems in some areas such as economy and environment. With the influence of world’s development, generally globalization is inevitable as a historic process (Simon J. , 2002). For developing China, in my point of view, participating in globalization is a means of development, rather than a purpose. China just needs to achieve the goals of developing productivity, developing economy and developing socialistic system by means of globalization.
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