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Economics China - globalisation+inequality (1 Viewer)

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wanzer123

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Hey!
i am currently researching China for my case study for economics!

And i am TOTALLY confused!
The problem is does globalisation cause inequality or not!?

At first i thought it did but apparently it doesnt according to this:
http://www.nber.org/digest/mar02/w8611.html

Please anyone! i need help! this is driving me nuts...!!


does it or not!?!?!
 

Sparcod

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I'd say both yes and no.
I'd say the gap is closing because high eco. growth in China is pulling millions out of poverty. However, those in the countryside are left with the worst jobs and aren't benefitting much.
 

Affinity

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Did it cause inquality in china? I would say yes, it is not hard to see that the gap between the well off and struggling has increased alot for the last 20 year, I don't you can dispute this fact, as shown by the official figures attested by the increase in migrant workers and crimes in the major cities.

So one might argue that liberalisation of the economy which started in th 80s is the cause of such, instead of globalisation. but the fact is the coast which conducts most of the interactions foreigners and where most of the factories are located benefited the most. Living expenses in shanghai and beijing can international level (well not quite.. you do can live cheaply), while it's often reported that people from the countryside live on less than a dollar a day (which ofcourse is more than that at PPP). There's also a big contrast inside a city. If you ever been to shanghai(disclaimer I am not from shanghai) you can find actually find very poor houses right in the little alleys around nanjing road.

Almost anything that increases economic freedom will naturally increase inequality(as defined appropriately). The smart people will float to the surface, with many sinking to the bottom. You can do a simple theoretical analysis on this.

Roughly what happens when you open trade is that some things are worth less coz other countries are better at it, and some are worth more because there's a higher demand/price willing to be paid by the world market than domestic demand. This often increase inequality because the society is not homogeneous.

Ofcourse none of this says that globalisation doesn't increase income for all, it just suggests that the increase some receives is highers than some others.
 
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