As mentioned above, globalisation encourages international trading and economic growth, and China has benefited particularly from this. During the past 30 years the average export levels have increased by 17% annually. This shows that China’s international trade levels have increased dramatically due to globalisation. In 2005 China joined the World Trade Organization in response to the globalisation trend and reduced its trade barriers, opening up to foreign investments and international trade. This was beneficial to the economy as it increased opportunities for economic growth through international trade and foreign investments.
Before China loosened its foreign policies, it had a banking system that is inefficient and weakly structured. However globalisation has improved this by providing competition with the rest of the world; the bank must improve its standards to match the standards of the global economy, to attract and protect foreign involvement. As a result China’s banks now have improved efficiency and competitiveness, but still have a lot of area for improvement, in order to compete with the rest of the world.
China had always had high levels of personal saving due to its lack of adequate social safety net. 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. Statistics also show that although economic development is overall improving, the gap between the richest and poorest is still widening. This shows that the richest of china’s population is enjoying most of the benefits of globalisation when they don’t really need it, but the poorest who desperately seeks improvement in their standard of living and quality of life are relatively less advantaged.
There are currently no real policies or regulation regarding to inequality in distribution of income, and the Chinese government need to consider improvement in this area.
The last area that will be discussed is environmental issues in china caused by globalisation. As mentioned before globalisation has caused major increase in economic growth. However as an economy grows, so does its demand for resources and environmental problems arises. China’s major exports are manufactured goods, and in the process of manufacturing there is always some form of degradation or pollution done to the environment. It is estimated that 300million people are drinking contaminated water in china, only 20% of solid waste is properly disposed of, and only 10% of sewage is treated. These environmental problems are costing 7% of China’ GDP, and will rise to 13% if this problem is not addressed properly.
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.
