Introduction of Globalization
“Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology.” This process effects in verities of ways which are environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world. People are communicating around the world to share each other’s culture through transportation, travel and trade of goods in hours or days. Globalization is the course that the world is increasingly becoming connected with each other as a result of the huge increase in trade and cultural exchanges. Production of goods and services are hugely increasing every country because of globalisation. The process of globalization is not only the opening of world trade, development of communication advanced, the financial markets of internationalization, the growth of MNC’s, movement of population and mobility of people increased, goods, data, capital and ideas but infections, pollution and diseases (Guy Brainbant,2012). Nowadays, most of the largest companies are not only at national but multinational companies with subsidiaries in most countries. In developed countries, globalisation is helping more to create wealthy and greater access to developed countries markets and technology improved higher living standards and productivity. People are in a vast global economy in which something happens in one area can have a domino effect around the world. The developed countries of globalization are to get organizations with lower producing costs, services and consumers, and a larger amount of products. By opening up new markets and access to new raw materials and resources are to create and development of new investment opportunities. Many companies are getting bigger and stronger because of globalisation. They are taking advantages of market opportunities and the acquisition of companies, reducing firm risk and cheaper labour costs. There are a lot of factors such as improvement of transportation its mean larger cargo ships that can make cost of transporting per good item decrease. Also mean that people and goods can travel as more as quickly. There are no barriers between countries because of organisations like the World Trade Organisation (WTO). (Pologeorgis, 2012)
Rationale for the economic policies
There are three parts in the international trade. They are import of goods, export of goods and subsidy. At first, import of good means that can import anything at any time, from agricultural products to machines to motor cars. There are several benefits that the consumers can choice from various sources of supply will make them possible to have a better quality of goods at lower prices. The consumers can get greater satisfaction from import at less expense. From imported machinery, the production of goods can improve. By observing the imported goods the domestic producers can improve the production process and the quality of products. For example, a lot of manufacturing does in china for foreign country. They import raw material such as oil and other fuels, organic chemicals and plastics from Africa and Asia. Its main exports are electrical and other types of machinery such as computers and medical equipment. China was the world largest exporter in 2013. The production of nearly $ 2.20 trillion exported. China economic growth rate are 9.3% in 2011, 7.7% in 2012 respectively. (Amadeo, 2014)
The trade between nations through the use of comparative advantage promotes growth, that is attribute to a strongly connection between effect on performance and growth of economic and the openness to flow of trade. In addition, there is a strongly positive relationship between capital flows and effect on the growth of economic. The impact of foreign direct investment on economic growth has...
Please join StudyMode to read the full document