Discuss the impacts of globalisation on the Chinese economy.

Analyse the
strategies that China is using to promote economic growth and development.

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.
Essay This essay will look at how the process of globalisation has affected the
outline
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.
Economic In the past decays China have experienced significant increases in
growth &
international trading and investments flows due to globalisation, which leads
quality of life
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.
Trade 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.
Finance 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.
Investment 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.
Inequality 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.
Environment
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
Conclusion 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.