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How has the process of globalisation has affected the Chinese economy?

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Introduction

Globalisation, in economics terms, is the process of increasing integration among different countries, resulting in the establishment of a single world market. Globalisation is encourages overseas trade, reduction or removal of trade barriers, therefore economic growth and development. This essay will look at how the process of globalisation has affected the Chinese economy in areas of trade, finance markets, income distribution and environmental issues; and analyze the strategies that the Chinese government has employed to encourage economic growth and development. In the past decays China have experienced significant increases in international trading and investments flows due to globalisation, which leads to high levels of economic growth. From 2001-2007 China experienced an average economic growth of 8.5% per year. All material and non-material indicators show a rise in income, quality of live and standard of living. The HDI in China has risen from 0.527 in 1975 to 0.768 in 2004. There has also been an increase in overall education level and overall reduction in poverty. However this improvement is not shared evenly across the population, which will be discussed later. ...read more.

Middle

As globalisation cause increase in trading, overall income levels have increased and the amount of saving is also raised. An increase in saving means that there will be more investment from the bank in local businesses, as more capital is available. This also boosts the economic growth in China. In 1990 and 1991 China set up its first stock market in Shanghai and Shenzhen. This stock market provided a new way of investment for both domestic and foreign investors, encouraging further economic growth and development. Although globalisation has caused a significant economic growth and development in China, these benefits of globalisation are not equally enjoyed by the whole population. The richest 10% of the Chinese population (mostly living in costal cities) owns 45% of the nation's wealth, while the poorest 10% own only 1.4% of it. The costal cities benefit more from globalisation because of its proximity to the rest of the world. This uneven distribution of income shows that the improvements in standard of living and quality of life are not equally shared. ...read more.

Conclusion

The Chinese government has shown a keen interest in fixing this problem by establishing many different laws and regulation regarding the environmental protection and resources management. However these policies cannot be reinforced due to the weak and corrupted structure of state governments. In conclusion, the Chinese economy has benefited greatly from the process of globalisation in terms of economic growth and development. As China lower their trade barriers, giving the positive impact of increase in international trade and foreign investment, resulting in significant levels of economic growth and development. Globalisation has also provided competition for domestic industries, encouraging high efficiency and competitiveness. The Chinese government has also established the stock market, providing a new channel for both domestic and international investment. However these benefits of globalisation are not equally enjoyed across the population, as there is an inequality in distribution of income, in which the government established no specific policies to address this problem. The growth in economy also caused environmental problems such as degradation and pollution, which the government have showed keen interest in managing this problem, but have so far failed to reinforce the policies established to protect the environment. ...read more.

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