The Economy of China (Globalization Effect)

Topics: Economics, People's Republic of China, Economic growth Pages: 5 (1701 words) Published: December 4, 2013
Research Essay – Lewis Carroll
The effects of globalisation on Economic growth and the quality of life in China. China holds the second largest economy in the world, measured by Purchasing Power Parity (a technique used to determine and compare the relative value of different currencies). From the late 1970’s, the Chinese economy has become more market orientated, rather than its former closed and planned political system. This change has played a major role in the development of their economy and impact of globalisation. At present, it is the world’s fastest growing major economy. Growth rates in the Chinese economy have averaged 10% throughout the past 30 years. By utilising Chinas perfect environment for manufacturing with low minimum income levels compared to other countries, and little to no policies surrounding work place health and safety, in 2010 China became the world's largest exporter. In 2010, 19.8% of the world’s manufacturing output was produced by China, and Industry and Manufacturing account for 46.8% of China’s GDP. Apart from the thriving Manufacturing industry, China also produces 45% of the world's steel and is the world’s third largest Automotive Manufacturer. Over recent years, China’s Urban wages have received a 13-19% increase to an average of $2472USDp.a. The Chinese Economy has gained both benefit and been disadvantaged by globalisation trends. One advantage is China has received extensive amounts of high GDP over recent years, although it sometimes due to the over exploitation of their unbelievably cheap labour compared to other countries. China has become almost an essential to the global supply chain because of its cheap labour leading to the massive growth we have seen over recent years. Other Positive effects of globalisation include the improvement of living standards due to higher employment and therefore larger income and contribution to the economy. The amount of employment in china has increased due to the rise in growth and creation of TNC’s and movement of production due to globalisation. This means that in order to meet demands, they need to create more jobs which is suited best in China because of low minimum income levels Negative effects of Globalisation on China include environmental changes and urbanisation. The Chinese Environment has been damaged due to rapid pollution and industrialisation consequences. The growth of industries specializing in manufacturing has caused the pollution of the air, ground and permanent damage on the surroundings of these factories due to production processes such as burning or pollution from capital goods. The growth of urbanisation was a result after the rapid increase in jobs around cities, but this can also lead to the lowering of standards of living and the amount of jobs and resources available elsewhere. The urban cities are unable to provide necessities and services the population need. By the end of 2012 52.6% of the Chinese population had become urbanised, an increase from the former 26% in 1990 . Although currently, the cities cannot provide for the amount of people urbanising, the government has aimed to create services, increase availability of necessities and support a range of mass transit around and inside the city as a part of their 5-year-plan for 2011-2015. The creation of low-income apartments is also being accommodated to support the lowest income earners and reduce homelessness. Another problem with this sudden spark in urbanisation is the lowering of workplace safety regulations yet to be created. The people are working in factories with very poor standards which reduce hygiene and can also cause mental issues such as suicides. The Chinese Economy has implemented particular strategies in order to promote and stabilize the economic growth and development they have received. These policies and strategies are a result of increasing demand because of globalisation in China. The introduction of the “Open door policy”...
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