What are the effects of globalization on China?

What are the effects of Globalisation on China?

Globalisation is the growing interconnectedness and interdependence of the modern world. In this massive tide of economic globalisation, no country can develop and prosper in isolation. China has learnt from her long history that isolation leads to backwardness. Development, progress and prosperity could only be achieved through opening to and integrating with the outside world, through stepping up exchanges and cooperation with other countries and through absorbing all fine results of human civilization. This process of globalisation has had an enormous impact in China, both its economy and society.

Powerful new economic, political and technological pulses are at work, and China has been quick to adjust and adapt to them. This adaptation in turn is linked to a much more open economy which China now refers to as “socialism with Chinese characteristics”. This has resulted in the rapid expansion of Trans National Corporations within China such as IBM and Dell. In 2011 FDI in China was estimated to reach US$117.7billion an increase of 8.16% since 2010. China has also experienced a large increase in exports estimated to be more than US$2 trillion in 2012. This is thought to have been helped by China’s entry into the World Trade Organisation in 2001 along with its ever-growing workforce and infrastructure improvements.  By encouraging foreign firms into China, it has resulted in raised competition between large State Owned Enterprises which has resulted in them either modernising to increase their efficiency or to dismantle. Joint Ventures have also been vitally important for China, with firms such as Procter & Gamble being particularly successful. Key features of JVs have been the requirement for technology transfer and an insistence that subcontracted work is given to selected domestic firms. This ensures that China acquires ‘know-how’ which can then be transferred to domestic firms.

The benefits however are not only concerning China’s economy, another remarkable fact as a…