impacts of globalisation on various groups within china

8/6/2019 Impacts of Globalisation on Various Groups Within China

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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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Dickens, P. (2011): lobal Shift: Mapping the Changing Contours of the orld Economy.

Sage

Hirst, P. Thompson, P. (199 ). Globalization in question: The international Economy andthe possibility of governance . Cambridge: Polity Press.

Stiglit , J.E. (2002) Globalization and Its Discontents.Source: Article: ew York Times:

orton & Co.

Hill, C. . . (2009) International Business: Competing in the lobal Market Place. Mc r aw-

Hill.

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Dollar, D. (200 )Poverty, Inequality and Social Disparities during Chinas economic eform.

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Feenstra, .C. ei, S.J (2009) Introduction to Chinas rowing ole in orld Trade.Source: ational Bureau ofEconomic esearch.

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Keping, Y.(200 ) Change in overnance and Political Development in China under the

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Kuijs, . ang, T.(2005) Chinas Pattern of rowth: Moving to Sustainability and educing

Inequality. Source: orld bank China Office.

Mamman, A. iu, K. (2008) The Interpretation of lobali ation amongst Chinese Business

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Ministry of Commerce: Peoples epublic of China: Accessed on 19/0 /11.

http://english.mofcom.gov.cn/aarticle/statistic/foreigninvestment/20110 /20110 07452 11.ht

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National Bureau of Statistic (NBS).(2008) China Statistical Yearbook, 2008. Beijing, China:China Statistical Press.

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Nielsen, I. Nyland, C. Smyth, . Zhang, M. Zhu, C.J. (2005) hich ural Migrants eceiveSocial Insurance in Chinese Cities? Source: lobal Social Policy Vol . 5( ): SA EPublications ( ondon).

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impacts of globalisation on various groups within china

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