EC427 Ireland, Europe, and the Global Economy
Name: Lisa Holmes ID:16392411 Date: 20-11-2018’Globalization in China, a data driven report’
Since 1978 when China opened to the outside world, China has moved towards a more market-based economy with huge growth in economic and social development. With GDP growth at nearly 10% per year, China is recognized as the second largest economy in the world that is playing a huge role in the global economy with trade, immigration and technology and participating in market integration across the globe. In fact, China is the largest contributor to world growth ever since the financial crisis in 2008. China is seen to be a major destination for foreign direct investment. Chinas imports, and exports are mainly to and from Japan, Korea, Germany, The European Union and The U.S. From the below graph we see a dramatic increase in both exports and imports from 1970 to 2002 and reasons for this include the ‘Financial Boom’ and having more disposable income. Chinas exports to Korea were 0% in 1980 and 16.2% in 2003, as well as that in Hong Kong in 1980 6.3% and increased to 46.4% in 2003. In 2003 The European Union were responsible for 12% of Chinas imports. However, due to the ‘Financial Crisis’ in 2008 Chinas economy began to slowly recover, and in 2015 China witnessed a dramatic decrease in imports, raising concerns about a ‘weaker-than-expected’ volume of trade in China. There are many suggestions as to why this happened in China such as lower demand after the crisis after such strong investment over the past decades. It is suggested that slower growth is more ‘desirable’ for China as well as the rest of the world for great efficiency and for greater participation in the worldwide market.
Figure 1. Growth in Trade, 1970–2002 (Index, 1970=1)
Sources: IMF, Direction of Trade Statistics.
Since the 1990s, international migration has increased, especially with the increase in third level graduates meaning there is higher international mobility of highly-qualified and highly skilled workers. This reflects, among other reasons, the growing globalization of economic activity. Countries are attracting highly educated workers to sustain economic growth. ‘In developing countries, the question of the international mobility of highly-qualified workers is manifested through a concern about the so called “brain drain” and the loss of economic potential which could result from this’. Where countries may lose some highly qualified workers to another country, it is also known as ‘brain exchange’. From the graph below, we can see a steady increase in the flow of people coming into China especially in the U.S as well as Australia and the United Kingdom between 2001 and 2017. Studies show that immigration in China shows interaction with global markets and the global economy as immigrants participate in sustaining economic growth and working to produce a more efficient economy especially in recent years with higher qualifications more and more people tend to work or study abroad and participate in brain exchange for reasons such as higher income, higher productivity and a higher standard of living, people participate in markets such as technology and science, finance and investment and the health sector.
Globalization is driven by technology in which is seen to improve standards of living and increase income. Technology is a key driver of improvements in incomes and standards of living. With more highly skilled and educated people technology is advancing and it is developing globally, generating greater economic growth. Advances in technology over the past decade includes transport, phones, laptops, and the development of credit and debit cards. These advances deliver faster more efficient goods and services to consumers worldwide. During 1995–2014, the United States, Japan, Germany, France, and the United Kingdom participated in innovations globally. China over the past years have become part of the contribution to the ‘global stock of knowledge’, as they have joined the top five leaders in several sectors. While this suggests that in the future, they too will be important sources of new technology. Chinas trade is increasing due to the distribution of technology such as machinery and transport. The exportation of technology alone can improve economic growth in the future. ‘China has around 700 million internet users and 282 million digital natives (internet users aged under 25) eager to adopt new technology’. China is a global leader in industries such as e-commerce and fintech.This report shows that globalization improves economic growth and productivity. Globalization can have implications including income inequality. However, globalization is driven by technology, trade and policies as well as the flow of migrants internationally and the increase in human mobility across the globe. Globalization can be seen in developing countries as well as developed. China is noted as the second largest economy to participate in trade worldwide, as well as its increase in migrants flooding into the country and integration with countries such as the U.S, Australia and the United Kingdom and with global spread of technology and its advances, China have witnessed a dramatic increase in there overall GDP in previous years.