Globalisation’s Economic Impact on China

Impacts of Globalisation in China

Globalisation is the interaction and integration of the world people, companies, and governments. While the concept of globalization began a long ago, its massive impacts have been witnessed in the 21st century across the globe. The concept has implications for diverse areas in the society that ranges from economic, social, to cultural impacts. The economic globalisation incorporates the international movement of goods, services, technology, and information. Further, it can be subcategorized to the globalization of markets, institutions, production, and labour. This essay focuses on the impacts of globalisation on international trades and trade agreements and the international migration of people in China.

China is a country that has significantly from the aspect of globalisation mostly through trades and migration of people. Foremost, access to international trade has drastically boosted the country's economy. The country is regarded as the world's largest exporter and importer, with the export being a vital component supporting China's rapid economic expansion. Through the facilitation of globalisation, the country major products of electromechanical products and labour-intensive products have been able to reach other parts of the world. The exports impact the country's economy; correctly, the GDP can be summarized in Figure 1. Notably, the figure shows the net exports of goods and services. According to Dollar (2015), China being the world's largest importer, net of the to may appear too little contribution. On the contrary, raw materials and other products imported to the country have positively driven other sectors of the economy, resulting in robust economic growth in the country.

In the last decade, the country's international trade has continued to increase exponentially. Hung (2015) insights that the choice of China to focus on the technologically advanced products has led to the export boom witnessed in the country. Additionally, globalisation has facilitated the identification of new business opportunities in every part of the world. In regards to trade agreements, globalisation has impacted this area significantly. In China, a significant trade agreement that happened is its entry to the World Trade Organization (WTO) in 2001. According to Woo (2017), this move meant that China had to restructure its economy and allow free trade with members of the WTO. The China membership to the trade organization opened new markets for the China products and allowed more imports. As a result, the country experienced a drastic improvement in its GDP from 2001 compared to previous years, as shown in Figure 2. It is the economic globalization that ensured the movement of the products and services within the trade partners was achieved. The economic impacts of the WTO to China are evident, and its regarded as a vital contribution to its robust economic growth.

Globalisation has facilitated bilateral trade agreements between China with other countries. A notable trade agreement is with African countries, which is on the rise. In 2014, China surpassed the United States to become the leading partner of Africa with more than 40 African countries (Eom, Hwang, Atkins, Chen, & Zhou, 2017). The African based agreements have seen the country's global trade expand. The globalisation enables the business between the developing countries in Africa and China. These agreements have increased the exports hence the improvement of the country's economy. The impact of globalisation in China's international trade and trade agreements has had indirect effects on the country's economy. The trade agreements have allowed free trade among the country partners in these countries. To ensure the efficient movement of goods and services infrastructure sector has witnessed tremendous improvement. For instance, highways, the high-speed rail that connects Beijing with Guangzhou, shanghai, and ultra-modern airports have been built to aid the movement of products (Yu, Lin, Tang, & Zhong, 2019). While the improvement of the infrastructure facilitates trade, other sectors of the economy have benefited. For instance, there is the creation of employment in the country for people working in the newly built infrastructures. The need for improved trade has led to the formulation of special economic zones in the country such as Shantou in Guangdong province. The industrial zones boost China's international trade by encouraging foreign businesses to operate in China by offering benefits such as tax incentives and the formulation of special lenient regulations.

While it is evident that globalisation had significant positive impacts on international trade and trade agreements, there exist some shortcomings. Entry into trade agreements entails the provision of free trade within the countries. As a result, imports that negatively affects the local industries are allowed to the country. Further, the country imports can exceed the exports resulting in a negative net export addition to the country's economy. International migration of people has been significantly by globalisation. As earlier mentioned, globalization entails the interconnectedness of the word businesses, people, and government through products and services. Globalisation has effectively opened cross border businesses and an opportunity for people migration. China has the largest population; hence labour force has been strongly impacted by the possibility of the international movement. On the other hand, people from different countries are moving to China for businesses or offer services According to Morrison (2018), labour costs in China are categorized as relatively low compared to other countries. As a result, many leading companies are either moved their production processes to China or exporting people to their countries. This predicament has resulted in an increased number of emigration of people from China to other countries. For instance, the number of Chinese immigrants in the US has grown to almost seven-fold since 1980, as illustrated in Figure 3.

The trade agreements with African countries mostly include skill transfer from the Chinese to the local professions. Therefore, Chinese people are required to migrate to these countries during the duration of the projects. The overall picture of the international migration of the Chinese population to other countries can be illustrated through the number of remittances received in the country. Figure 4 shows a continuous increase in payments in the country over the years.

The remittances are a positive addition to the country's economy through contribution to the GDP.

The international migration of the Chinese to other countries facilitated by globalisation has drastically reduced the country's employment rate. According to Statista (2020), china's unemployment rates have remained at approximately 4% over the last ten years and are projected to remain constant until 2024, as shown in Figure 5.

With the high population, maintaining such relatively low unemployment compared to it's the US at 4.4 % is an achievement highly attributed to the possibility of international migration. On the other hand, China has experienced number of immigrants in the recent years. The opportunities caused by the globalisation of global interconnectedness have resulted in people moving to China for business. The country immigration rates has continuously increased in the last decades (Liang, 2016). Notably, many companies have moved their production lines to China due to the conducive work environment and cheap labour. As a result, some work staff of these companies are needed to move to china to run these businesses. Recent studies have indicated that Africans are the most significant number of immigrants in China (Mberu, 2016). Their movement has been facilitated by globalisation and the trade agreements between the African countries and China. International migration of people into a country has a positive impact to its economy. Liang and Song (2016) depicts that immigrants have a positive impact to the country economy. Foremost, the people are required to pay taxes which adds to the government revenue. The permits, licences, and businesses taxes paid to the country are also injections to the country economy. Migrations that are motivated by business opportunities mean that there is possibility of employment creation for local Chinese population. These collectively result to an improvement of the country economy. China's economic growth and dominance in the world's global trade can be fundamentally attributed to globalisation. The Chinese government, through regulations and trade laws, has actively promoted the aspect of globalisation. The state laws towards international trade and foreign policy have been characterized as less stringent and motivate overseas companies into the country. The environmental regulations that are less strict compared to its counterparts have also given China an upper hand in taking advantage of globalisation. It is undoubtful of the impacts of globalisation on the world economy. Among the world countries, China is one of the states that have experienced the effects of globalisation through international trade, trade agreements, and the international migration of people. Through the facilitation of globalisation, these sectors have been positively enhanced both directly and indirectly. As a result, the country has experienced drastic economic growth, which has made the country among the leading countries regarding the economy worldwide.

References

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