Economic globalisation is the increased integration between the national economies around the world, which leads to the rapid increase of overseas trade. Since 1978, there was the economic reform in China which was led by Deng Xiaoping, Chinese leadership began to move forwards to a more market- oriented mixed economy. After that, China has achieved a significant economic growth. In 2001, China has become a member of WTO (World Trade Organisation), which gives this country a lot more chances for international trade. With the economy has been more and more globalised, Chinese economy has been affected momentously in both good ways and bad ways. The positive effect is that globalisation boosts the economic growth in China, people’s living standards have been improved, and globalisation leads to more trade and investment. However, with the rapid economic growth, there are also some negative factors occurring, such as inequality between the rich and the poor; social instability such as riots; and some environmental issues such as pollutions.First, this essay is going to analysis the positive impacts on Chinese economy from globalisation; then the essay will evaluate the negative effects on Chinese economy from globalisation. Positive impacts on Chinese Economy
Economic Growth& Living Standard
There are more international trading and investments in China due to globalisation, which leads Chinese economic growth to be higher. There has been an economic growth of 8.5% per year from 2001 to 2007. With this rapid economic growth, it brought Chinese people to a wealthier, happier and more stable society. HDI( Human Development Index) has increased from 0.527 in 1975 to 0.768 in 2004. The overall education level has been risen, and the poverty of China has been decreased. The graph of economic growth in recent years is showing below:
The international trade level of China has increased dramatically because of the globalisation. The average level of export in China has increased by 17% each year during the last 30 years. Nowadays, China has become the largest export country (1.897 trillion dollars in 2011); the third largest import country (1.664 trillion dollars in 2011). In response to globalisation trend, China has joined in WTO in 2001. After that, China began to reduce the trade barriers, open up to more foreign investments and international trade. With these investments and international trade, the economic growth would be more possibly to increase, which therefore is beneficial for China. The graph of imports growth and exports growth is showing below:
Globalisation increases Chinese economy’s competition with the rest of the world. With the competition, there will be higher efficiency and better creativity. For instance, before China decided to make a more market economy which means more trade, the bank in China used to be ineffective and terrible- structured; however, because of the globalisation, China needs to improve the standard of the bank in order to match the global standard, which has now resulted in a more efficient and competitive environment. Investment
Globalisation leads to more trade, more trade leads to a higher level of income. As China always has very high levels of personal savings, therefore when people have more income, they will save more as well. More savings imply that there will be more investments from the bank to some local firms, because there are more capitals available for bank. Investments also help to increase the economic growth in China. For example, in 1990, the first stock exchange company has established in Shanghai, the feature of the company is it has provided a new way of investments, for both domestic investors and foreign investors, which will expand the investment further, which therefore boost the economy in China. Negative impacts on Chinese Economy
As globalisation leads to more...