Professional Documents
Culture Documents
Roll Number 10
1 2 3 4
An Overview of Globalization
China and Globalization Challenges under Globalization
Contents
1. An Overview of Globalization
Globalization
Every 105 out of 1,000 Chinese people had access to the Internet
Internet
Relaxation of restrictions on labor movement across borders leads to freer exchange of professionals and skilled workers. On every Monday morning, business class of almost all the flights from HK to Beijing is full, the vice versa on the other way round every Friday afternoon. Everyday, China has 20m rural labors working in cities.
According to World Development Indicator: The international trade as a percentage of global GDP increased from 7.6% in 1948 to 28.4% in 2005.
International Trade/Global GDP
19th
century
Mid-19th
6 Century
1913 1948 1999 2000 2005
In Chinas case: the trade as a percentage of GDP increased from 9.7% in 1978 to 64% in 2006 (around 700 % increase)
70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%
Global production network is taking root in the Chinese market. MNC setting up base in CHINA
11.12%
rate policy, exchange rate policy, banking supervision cooperation and coordination etc.
No obvious links were witnessed between business cycles of major industrial economies after World War II, with the only exception of the world-wide economic crisis between 1973 and 1975 Today, the business cycles in the Asian Pacific Region, Europe and America become quite synchronized:
Asian Financial Crisis in 1997 triggered economic slowdown in Europe and America.
The sluggish economic performance in the U.S. in 2001 turned into a worldwide phenomenon. A global stock market volatility witnessed with the sudden plunge in Chinese stock market On 27th February 2007.
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Today, what happening in one country can easily extend beyond the country of origin and become a global issue.
Examples:
Environmental Damage Terrorism
Global Phenomena
Infectious Diseases
Internet breakdown
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Implications of Globalization
Generally speaking, the world is becoming a global village. Globalization is a double-edged sword: opportunities vs. competition & challenges. Common prosperity under globalization requires considerable efforts. Efficient economic outcome from globalization needs facilitated cooperation and common enforcement.
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2-2
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1978 GDP Per capita disposable income of urban residents Trade Trade as the percentage of GDP Actual Utilized FDI Foreign Exchange Reserves RMB 362.41bn RMB 343 US$ 20.64bn 9.7% 0 US$0.167bn
2006 RMB 20.9tn RMB 11,759 US$ 1.76tn 64% US$73.5bn US$1.07tn
36.8%
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China ranks No.3 in international trade, and the contribution of trade to GDP has risen to over 60%. China plays an important role in international production chain, taking advantage of its large pool of labor force.
Chinas demand for import has been growing, with a total of US$ 791.6 billion worth of goods imported in 2006, marking a year-onyear increase of 20.0%. And China has basically maintained a balance between import and export.
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China is playing an increasingly important role in world economic and political arena, evidenced by its participation in and cooperation with:
Multilateral Institutions: UN, WTO, IMF, World Bank, etc. Regional Organizations: ASEAN+3; ASEAN+1; Cooperation among China, Japan and Korea; relationships between China and South Asian countries; Shanghai Cooperation Organization; China-Africa Cooperation Forum etc. Cross-border Taskforce: Asian Financial Crisis, Anti-terrorism, Six-party talks on North Korea issue, etc.
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Reduction in poverty
The number of people living on less than US$1 per person per day in China was reduced from 634million in 1981 to 212million in 2001. The proportion of people living under such poverty line decreased from 63.8% in 1981 to 16.6% in 2001. Chinas share in global trade increased from 0.6% in 1978 to 14.2% in 2006.
China has made big strides in increasing real per capita GDP.
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Ratio of 2006 to 1990 real per capita GDP 5.0 4.0 3.0 2.0 1.0 0.0 2.1 1.9 1.8 1.8 1.8 1.7 1.6 1.3 4.1
nd
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a si ne Ph il ip pi
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di
SA
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Ch
ap
ys
Ko
In
ai
ng
la
ng
Th
Si
Ma
Ko
ut
So
Ho
ng
In
do
ne
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China accounts for more than one fifth of the worlds population, so the poverty alleviation of China has contributed significantly to that of the world.
The worldwide population living under poverty line decreased from 1,482 million in 1981 to 1,089 million in 2001, representing a dramatic reduction from 40.4% to 21.1% measured by its share in global population. Excluding China, the sheer number of people living under poverty line worldwide increased from 848 million to 877 million.
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China has provided to the world the quality products with reasonable
prices, such as clothes, shoes, & some electronic products. inflation in rein.
2003
US EU Germany 2.27 2.07 1.05
2004
2.68 2.14 1.67
2005
3.39 2.19 1.95
France
UK
2.40
2.91
2.26
2.96
1.74
2.83
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Internal Challenges
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Key Challenges
#1
#2
#3
25
Percent
si a
SA R
an d
ea
a es i Ph il ip
Ch in
po r
Ko r
In di
la y
ng a
ai l
Ma
Ko n
Th
ut h
Si
ng
Ho
So
1990
2006
But consumption as the percentage of GDP fell. (62% in 1990, 50% in 2006).
Chinas consumption share is much lower than that of most other Asian economies.
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In
do n
pi n
es
1990
1995
2000
-2
RMB Equivalent of Foreign Exchange Reserve 120000 100000 80000 60000 40000 20000 0
2000-10
2001-03
2001-08
2002-01
2002-06
2002-11
2003-04
2003-09
2004-02
2004-07
2004-12
2005-05
2005-10
2006-03
2006-08
27
2007-01
RMB 100 Mn
2005
In the meantime, Chinas current account surplus has surged in recent years.
Percent
6 4 2 0
Excess liquidity is partly interpreted into continuous surge in real estate and stock prices as well as loan supply.
112 111 110 109 108 107 106 105 104 103 102
Ju 6 l-0 A 6 -0 g u 6 -0 p Se 06 ct6 -0 v o 6 -0 c e
2004-04
2004-06
2004-08
2004-10
2004-12
2005-02
2005-04
2005-06
2005-08
2005-10
2005-12
2006-02
2006-04
2006-06
2006-08
2006-10
2006-12
2007-02
20 05 20 01 05 20 03 05 20 05 05 20 07 05 20 09 05 20 11 06 20 01 06 20 03 06 20 05 06 20 07 06 20 09 06 20 11 07 20 01 07 -0 3
nJa
07
7 -0 b Fe
28
2007-04
Both household and corporate savings are very high. Thin social safety net and high cost of education and housing lead to high precautionary private savings Thorough reforms in social security system, medical-care and education are needed. Sustained increase in social sector spending is needed.
Government Education Expenditure in Selected Countries(2004)
5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0
Percnt of GDP
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Lack of effective monitoring and legal enforcement caused pollution as over-investment goes.
Low sulfur fuel + clean vehicle + technologies = better air quality More effective enforcement + better cultivation = workers death numbers and hospital admissions decrease
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Challenge III: Need for the next generation of talent and reformers Success depends on the energy and ideas of Chinas leaders.
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Facts GDP GDP growth Per capita GDP Inflation Labor Force Unemployment
Fiscal deficit
Foreign Direct Investment Gold Reserves Foreign Exchange Reserves World Prosperity Index Mobile Users Internet Users
5.5%
$12.40bn 15% $2.41bn 88th position 842million 123.16million
21.5%
$9.7bn 11% $2.65tn 58th position 687.71million 81million
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China will continue to reform its political structure, develop socialist democracy, expand citizens orderly participation in political affairs, and ensure that people exercise democratic elections, democratic decision-making, democratic management, and democratic supervision in accordance with the law.
--President Hu Jintao, during his April 2006 visit to US
It is important to build a contingent of public servants who are politically reliable, professionally competent and clean and honest and have a good work style.
--Premier Wen Jiabao, in 2004, report to the congress
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Questions to be discussed.
1.How have the changes in technology contributed to globalization of markets and production?
2.Would the globalization of production and markets have been possible without these technological changes?
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Thank you!
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