Globalisation is mainly an economic process. Discuss

by draneel (student)

Globalisation is mainly an economic process. Discuss (30)

“It has been said that arguing against globalisation is like arguing against the laws of gravity”-Kofi Annan. This statement is perhaps considered to be true but is globalisation mainly an economic process? Although many countries consider globalisation as a benefactor economically, it can also be perceived as other benefactors e.g. socially, technologically as well as politically. The countries of the United Kingdom and China are examples of these countries that have been affected by this.

The Global economy is the combined economies across the world; it provides us with much information on the main contributors in terms of GDP (Gross National Product). The top 10 countries in terms of GDP are United States, China, Japan, Germany, France, United Kingdom, Brazil, Italy, India, and Canada. According to data from the World Bank and the IMF (International Monetary Fund) GDP per capita stands at $10,500 (USD), furthermore, 30% of the world population currently 7 billion is currently unemployed, this is compounded by the fact that 3.25 billion people are living on less than $2 a day.

China located in the continent of Asia is an example of how globalisation is mainly an economic process, it is now known to some as, “the workshop of the world” commonly used to describe Great Britain’s industrial revolution this could be similar after China’s Cultural Revolution and Deng Xiaoping’s economic reforms led them to integrate themselves into the Global economy as they opened up a more mixed economy and a more market based system. This is shown as in 2002 exports to other countries had increased by 21% to $322 billion. Moreover, according to the financial times, China’s foreign direct investment has increased dramatically since the 1990’s when it first opened up the country to the Global Market this is shown as in 1990 the FDI (foreign direct investment) was at less than $4 billion, however, in 2010 it is estimated that they would have received over $100 billion. Another reason why China is an example of this is because when it joined the world trade organisation also known as the WTO, this means that they have the ability to trade more freely and so become more globalised, this lead to an increase in demand for exports from overseas and so increased China’s economic growth this is supported by car sales in china increase by 1 million in 2002 with it to rise to just under 5 million by 2010. From this you can see that globalisation is mainly an economic process as China’s economic reforms in the 1970’s after the Cultural Revolution led the country to become more globalised.

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Despite this, other factors could have lead China to become more globalised, an example of this is in telecommunications as China currently has the largest number of active cellphones of any country in the world, with over 1 billion users as of May 2012.It also has the world's largest number of internet and broadband users. By December 2010, China had around 457 million internet users, an increase of 19% over the previous year, and by the end of 2011 the number of internet users had exceeded 500 million. This is thanks to the integration of the world system and the allowance of private corporations to set up in China. Infrastructure is another key argument why china became globalised during the start of the global financial crisis in 2008 the Chinese government through the National Development and Reform Commission gave approval for 60 infrastructure projects totaling more than 1 trillion Yuan ($157 billion). This was adopted by Keynesian economic theories which have become essential in the economic downturn who believed that spending more money and borrowing more would help rejuvenate potentially faltering economies. This showed that infrastructure was also a factor in China’s globalisation as it allowed more people to visit the country through better road networks and better transportation services such as, airports and high speed rail networks. From this you can see that infrastructure and telecommunications helped china become more globalised through connecting to other people showing that it is just not an economic process.

The United Kingdom is another example of how globalisation is mainly an economic process, in the eighteenth and nineteenth centuries, the United Kingdom experienced a massive increase in agricultural productivity known as the British Agricultural Revolution, which enabled an unprecedented population growth, freeing a significant percentage of the workforce from farming, and helping to drive the Industrial Revolution. The rate of the industrial revolution was compounded through neo colonialism as well as other countries relying on Britain for its products from the raw materials given to the United Kingdom (also known as the dependency theory) this was made easier as the surplus income was able to be spent on being able to connect with the countries that it had colonised such as Australia. Later on when the 1980’s recession hit the UK economy, enterprise schemes were set up to create jobs and stimulate economic growth, this meant that more TNC’s (transnational corporations’) set up in the United Kingdom allowing more FDI to come into the UK. This was all made because of the London Financial hub which is the largest in the world along side Wall St in America, this meant that the UK could be more connected to the world and so more FDI could be received and so the UK can spend more on projects such as the enterprise zones stimulating economic growth. Therefore, you can see that thanks to the industrial revolution as well as neo colonialism the UK was able to become more globalised by being able to connect with other countries around the world.

However, there could be other reasons why the UK became more globalised; one reason could be that during the global financial crisis Alistair Darling the Chancellor and Exchequer at the time announced to adopt John Maynard Keynes’s theories by investing into the economy one of these examples was to invest £16bn Cross rail and the 2012 Olympic Games, both in London. By doing this he hoped to not create jobs, but to increase the infrastructure of the area to make it easier for other countries to visit the UK especially before the London 2012 Olympic Games. Another reason why the UK became more globalised is the proposed. Furthermore, Keynes was ever more relevant in the 1950’s as after World War two where his monetary policy allowed investment into the economy allowing manufacturing to boom this caused better radios to be made and other products, this allowed better connection to the wider world and so communication increased leading to the UK to become more globalised.

In conclusion although Globalisation is seen by many countries as mainly an economic process it is hard to ignore those other factors such as infrastructure and communications have played a significant role in the integration of globalisation on those countries.