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ESSAY TOPIC: Using a country of your choice, illustrate how globalisation can have
different impacts on various groups within the same country?
NAME: JOSHUA M CHIGWANGWA
ISSUES IN GLOBAL ECONOMY
WORD COUNT : 2 095 words
How globalisation can have different impacts on various groups within China?
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Question
Illustrate how globalisation can have different impacts on various groups within China ?
This essay sets out to discuss the impacts of globalisation on the different social groups in
China. Accordingly, this essay will attempt to define globalisation within the context of China.
I will discuss the impact of foreign trade and foreign direct investment (FDI) on China s
economic growth and the social impact on spatial income distribution on different groups
within Chinas rural and urban communities, its impact on gender groups, the inequality
between skilled andunskilled labour including its linkages to increased rural urban migration
trends. I will conclude that whilst globalisation has promoted Chinas rapid economic growth,
it has a negative impact on income distribution and is has a direct causality to inter -provincial
inequality, rural urban inequality and widening intra urban social classdivide.
Developing countries in general and for Chinain particular, globalisation has been mainly
associated with the 1990s IMF backed structural adjustment policies (SAP s) which
encouraged China to ditch a command economy and to embrace market based reforms.
Fiss et. al (2005) refers to globalisation within Chinas context as the emergence of
capitalism, democratisation or globalisation marked by discursive struggles over social and
cultural impacts, and outcomes from these struggles which facilitate or impede acceptance
of widespread reforms. Mamman et. al. (2008) argues that globalisation has different
meanings to different people, hence in Chinas instance; globalisatio n has both positive and
negative connotations, depending on geographical locations and productive occupation in
society.
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Economic lobali ation aved t e ay for t e introductionof olitical reforms, separating t e
inese ommunist Party from t e Stateorgans, removal ofstatemonopoliesorpatronages
to t e Ruling Partyand t esigningof international umanrights treaties, particularly the
reatyof International umanand ivil Rights Keping, 4 . Keping 4 argues that
thishasseenan increasingnumberof hinascitizens, especiallyacademicsand the
youngergenerationsno longersubmitting togovernment oppressionand insteadadvocating
relatively independent attitudesandresponses togovernment policiesandactions. hehas
seen theemergenceof the New Left entregroupsopposed tosomeofthereforms, thus
accommodatingdemocraticviewsat grassroots levels.
Prior toembracingeconomic liberalisation, hinaexperiencedgrowing internal pressuresof
economicorigin from itsover3 million hinesegrowingpopulation, withno industryor
tradeofsufficient scope toabsorbsurplus labour Wordenet al, 7 . hinaseconomic
reformswere thereforeprimarily to increaseeconomicgrowthandraiseeconomic living
standards Benjaminetal, , with thepovertyratedeclining from 64% at thebeginning
of thereforms to % in 4 ollar, 7 .
Figure 1
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i 3Urban and ural Incomes per capita (19 8 200 ).
So c : National B a of Statistic (NBS). ( 008)
Yusuf et.al.(200 ) suggests that the rural-urban income differences reached their historic
peak in 2005 and were greater than when reforms began, with real income per capita being
9 percent of real urban income per capita. This trend is supported by the stati stical figures,
according to Yue (2010), the ini coefficient soared up to 0. 1 in 2000, surpassing 0. 9 in
1999, and kept increasing ever since. It reached its peak at 0. 9 in 200 .The ini
coefficient is an internationally recognised measure of inequality of income distribution with a
low inicoefficient indicat ing a more equal income distribution, while a high ini coefficient
indicates spatial income distribution.
There has been gradual increase in inequality of income distribution in China, since adopting
market based reforms affecting different demographic profiles and groups . According to en
(200 ), prior to the introduction of market reforms in the early 80s, the richest 10 percent of
the populace earned less than 20 percent of DP and yet by 2005, the top 10 percent
earned 5 percent of the income, while the bottom 10 percentearned only 1. percent .
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Traditional government policies that treat rural and urban areas differently have resulted in
inequalities or gaps in living standards in China, particularly in educationand health . Dollar
(200 ) argues that this has been due to the skewed nature of Chinas uniquely decentralised
fiscal system which has failed to cope with the surge in economic growth and demand for
better services. The rural poo r cannot afford to keep pace with rising costs of basic public
services such as rural health and education. Sinclair et. al (200 ) asserts that 25 percent of
the differences in the rural -urban gap are attributable to differences in education.
Escalating internal migration trends is another indicator of the impact of globalisation in
China. This is a consequence of both the push and pull factors resulting from economic
reforms that date from the late 19 0s (Smith et al , 1995). Yusuf et al argues that official
statistics indicate that Chinas urban population more than doubled during the reform
programme from 1 , 9 percent in 19 8 to 2, and 9 percent in 2005. As a result of Chinas
rural reforms, some 0% of the rural labour force, about 200 million rural workers were made
redundant resulting in most of these workers migrating to urban centres or coastal towns to
take up employment in the emerging industries ( ielsen et al, 2005).
The growing urban population created an emerging migrant underclass society based on
limitations to social insurance access rights. ielsen et al (2005) argues that urban dwellers
tended to look down on migrant work ers and often treating them as scapegoats for a wide
range of social ills in Chinese cities including congestion, crime, degradation of the
environment and housing shortages including the undermining of employment conditions. In
other words, migrant worker s became an easy target for exploitation in sweat shops.
Most migrants had no urban registration passes which automatically excluded migrant
workers access to social security benefits enjoyed by registered urban workers creating
different urban social cla sses. Most significant is the fact that unregistered migrant workers
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had limitedornoaccess tosubsidisedhousing, education for theirdependents, heright to
voteandaccess tounemployment benefitsand trainingservices.
According to latest statistics, actual used I totalled S$ 7. 3 billion in hina, an
increaseof 7, % yearonyearfigures. hedistributionof I across hinas 3
provinces indicates that theagricultural sectoraveraged % of the total I overthereforms
era, meaning that rural povertystagnatedand inequalitiesarewideningyearonyear. he
Easternregion is thedriving forcebehind therapideconomicdevelopment andhigh
economicgrowth in hina, while the Westernregion is the laggardresulting inregional
income inequalityandhigherconcentrationofpoverty Heshmati et al, . igure 4
indicates the trendof I net inflows from to 4 showingasharprisefrom .
Figure 4
According toempirical studiesby Shuet al 7 , economicglobalisationhasno intrinsic
positiveornegative effect ongenderinequalities in hinas labourmarket. hinesemenare
more likely tobechannelled into thenewlyemerged jobs in foreign firmsand jointven tures
that offersubstantiallyhigherearnings, while hinesewomen tend toparticipatemore in low
paying jobs inglobal production factories,fuellinggenderrural tourbanmigration trends.
Increaseddemand for hinasproductsabroadhashadan impact on itsdomestic
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market. he late sand thestart of theyear havewitnessedadramaticrevolution
in the informationandcommunications technology.
Figure 5
igure clearly illustrates thesharp G P increase followingglobalisation in hinawhich in
turnhascausedasignificant impact to itsstructureof itseconomyandpolicies. hishas
seen theshareof hinas total exportsproducedbywholly foreign-owned firmsand Sino-
foreign joint venturesrisingsteadilyovertime, fromabout 3 % in tomore than % by
. hinasoutbound I accounted for less than % ofglobal I flow in 6.
eenstraet al,
he increased foreigndirect investment hascausedunevendistributionof investment within
hina impactingon thespatial distributionpatternsof incomes.According to Yue , I
to 3 provinces in theeast areaaccounted for , % of the total I in hina, whilst I in
provinces in themiddleand provinces in thewest accounted for , 4% and 3, %
respectively. herehasbeen increasedinter-provincial inequality, rural-urban inequalityand
inter-industrial inequalityacross the lengthandbreadthof hinas fast growingeconomy.
igure 6 depictspercapita income from 7 to within hinasmainregions indicating
agradual income inequality trendup to 7 andadistinct incomedisparity from
onwardsduring the time thegloba l impact waspeaking. hisalso indicatesthat oastal
regionsreceived thebulkof I fundingwithminimal fundingon Inlandregions.
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Figure : Regional Income Inequality in China: 1970 - 00
Source: National Bureau of Statistic (NBS). ( 003)
The accelerated industrial growth in China has had an impact on the environment and land
use patterns. en (200 ) argues that China was responsible for 0% of the increase of
worlds energy consumption between 2000 and 200 , resulting in climate models predicting
less rainfall in northern China. This climate change results in a % reduction in Chinas
main crop yields and significant water shortages which is closely linked to income
inequalities and poverty in rural communities. Sun et.al (200 ) argues that the entry of China
into orld Trade Organisation ( TO) also forced the removal of subsidies on domestic
agriculture and exports. The resulting uncompetitive domestic prices turned China into a net
importer of agricultural products leading to land abandonment and corresponding disparity in
earnings and migration patterns.
The diversification within the economy gave birth to the proliferation of Sweat shops to
accommodate the needs of displaced peasant workers due to the adverse effects of the rural
reforms. These sweatshops thrived on a buse of migrant workers failing to cope with
advantages offered to M Cs as preconditions for FDI. This impacted adversely on women
and children who were now used in the wars to drive down wages and product prices, a real
concern in global markets due to un realistically cheap prices on chinas products.
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lobalisation caused disparities resulting from educational and cultural colonisation in China.
en (200 ) argues that globalisation increased the divide in education between rural and
urban inhabitants. The Cultural evolution transformed China to open do or education policy
distinct from the prior system biased against rural way of life. en (200 ) suggests that a
popular educational model was developed which is more responsive to rural needs and
culture, thus enriching and transforming chinas rural cu lture. The
In conclusion, globalisation has had both p ositive and negative impacts o n different groups
in China. lobalisation resulted in a sharp increase in FDI causing unprecedented industrial
growth and an upsurge in the levels of Chinas imports and exports. There has been a sharp
increase in income inequalities with a widening gap between the ric h and poor in urban
areas and disparities in living standards including access to basic social services b etween
different groups in urban areas andbetween different groups in urban areas and rural areas .
lobalisation triggered rural to urban migration trends linked to FDI patterns. FDI facilitated
the growth of M C which fuelled the proliferation of Sweatshops and the associated abuse
of migrant labourand t he disparities in the living standards of different groups in urban
dwellings.
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