Silver Persian
Banned
Hi, um, I have an assessment due on Wednesday, it's an in class essay which I really hate. I was wondering if some people could read my essay and give me some advice on how to improve it.
Analyse the impact of globalisation on a developing economy and the strategies used in the economy to promote economic development
Globalisation refers to the integration of individual economies and culture that has occurred in recent decades as social and political barriers dividing nations have been diminished. The economic reforms of Deng Xiaoping in 1978 liberalised the Chinese economy, allowing the nation to exploit the benefits of foreign investment and trade, and resulting in significant impacts upon the nations political, social and economic spheres. China’s integration with the global economy, coupled with it’s movement from a command, planned economy to a market based structure, has resulted in an unprecedented growth rate, averaging 10% increases in GDP throughout the 1990’s. The nations has also experiences significant improvements relating to economic development, with its Human Development Index (HDI) rising 16 places throughout the previous decade to be currently ranked 94th. However, this figure disregards the income inequality that has plagued the nation, which has virtually left the nations rural population without any of the benefits globalisation has created. The government is currently considering the implementation of policies that will encourage economic growth in underdeveloped regions while promoting China to the global economy.
In recent decades the Chinese government has realised the potential benefits of a liberalised economy, and has subsequently dismantled majority of the tariffs, subsidies and quotas that create artificial barriers for foreign competition. This improves global economic efficiency, by allowing nations to specialise in the production of goods and services in which they have a low opportunity cost, or a comparative advantage. The increased foreign competition has also forced domestic producers to improve efficiency to remain economically viable. As a result, China’s economy is currently operating at a productivity level that severely outperforms its efforts prior to liberalisation.
China has become a pivotal nation in regards to the flow of intermediate goods through the global economy, providing an ideal location for labour intensive production. From 1995-2004, China’s importation of consumer goods doubled, from $US42.2 billion to $US 78.7 billion, while imports for further processing tripled, from $US29.8 billion to $US81.9 billion. Similarly, China’s export base primarily consists of the processed imports from TNC’s. The process of globalisation has resulted in the PRC becoming a major contributor to the world’s productivity levels, and by exploiting this; the economy has managed to derive significant improvements in economic development through improvements to it’s productive capabilities and GDP per capita.
The most substantial impact globalisation has had upon the Chinese economy is the restructuring of the highly populated eastern areas from agricultural and cottage industry to export orientated labour intensive manufacturing. This development can be attributed to the expansion of Foreign Direct Investment (FDI) from Transnational Corporations (TNC’s). Throughout the previous decade, China’s inflow of FDI has increased at an average annual rate of 40%, and is currently the world’s second highest recipient, at $US450 billion per year. TNC’s have been attracted to the Chinese economy to exploit the nations abundance of inexpensive labour, and it has become the worlds ideal location for labour intensive manufacturing industries, such as footwear, textles and toys They have also been keen to take advantage of China’s fixed currency level, which is currently fixed against the $US, and is substantially undervalued, making investment in China inexpensive. Rapidly increasing FDI levels have dramatically appreciated average weekly earnings levels, reduced unemployment and substantially improved China’s productive capacity – all factors that have contributed to China’s position as the worlds 7th largest economy, with a GDP of $US1.4 trillion.
The exponential increase of incoming FDI flows to China has created several issues that threaten the nations economic development. China has managed to contain underlying inflationary pressures because of high competition within the labour market forcing employees to accept low wages. However, immense investment has resulted in a tremendous expansion of the nations productive capacity, which has created difficulties for businesses in generating adequate returns upon their capital investment, as supply is outperforming demand. For instance, in 2002 China had the capacity to produce 2.8 million automobiles, however only 1.8 million were demanded. Economists are concerned that China will eventually represent an enormous inefficiency in the allocation of resources.
The Chinese government has recently implemented several measures to reduce investment in the Chinese economy to prevent it from ‘overheating’. In October 2004, the government increased the cash rate by 25 basis points, the first incidence ever of the utilisation of monetary policy. While this has had little impact upon investment, it has served as a warning that the government would be willing to increase interest rates in the future. It is also intending to lower economic activity by minimising fixed capital expenditure in the 2005 budget.
The economic effects of globalisation have resulted in severe inequality within the global economy. In 2003, 57% of China’s GDP was produced solely along it’s eastern coast, while the western half of the nation contributed 9%. These statistics can be primarily attributed to the direction of FDI flows, with 86.4% of international investment in the eastern industrial centres. The inequality this has created in economic development is evident when examining the HDI levels of individual regions. Shanghai, the nations economic centrepiece has a HDI of 0.853, which would qualify it as a highly developed nation under the United Nations Development Program. In contrast, however, Tibet has a HDI of merely 0.512, just exceeding the standard of undeveloped nations. While economic development in China’s west has not decreased, it will be essential for the government to create greater equality to limit poverty and to ensure political and social stability within the nation.
To discourage economic inequality, China’s government has introduced several ‘pro rural’ policies. It is intending to implement a more extensive social security system, and has committed itself to ensuring 100% of China has access to a sanitary water supply by 2020, compared to the current level of 75%. It has introduced direct subsidies to farmers, a reduction in agricultural taxes and maintains substantial tariffs to prevent foreign producers entering the market. These policies are economically unviable, and indicate a degree of resistance to globalisation within China. By maintaining this protection the government is attempting to protect the domestic industry and foster economic development in the western regions, however, in actuality, they may prove counterproductive by utilising China’s resources inefficiently.
In recent years, China has attempted to improve its productivity and economic development by implementing a policy of compulsory secondary education and subsidising the nations tertiary institutions. This is intended to alter China from a low skilled manufacturing economy to a highly skilled services economy, in imitation of highly developed nations. This will dramatically improve the workforce’s international competitiveness, as the nations mammoth population will force wages to remain low, while higher skill levels will attract a higher degree of foreign attention. However, once again, the government’s commitment to improving educational standards has neglected the rural community, further entrenching the nations income inequalities.
Throughout the 1990’s the Chinese governments sole objective was to foster economic growth, while neglecting the detrimental effects this process may have upon economic development, such as income inequality, as discussed above, and a deterioration of environmental standards. In a recent report, the World Health Organisation estimated that China possessed seven of world’s ten most polluted cities, largely as a result of sulphur dioxide and soot emissions from manufacturing plants. As a result, acid rain currently falls on 30% of China, further reducing the nations living standards. Increasing demand for property from TNC’s has resulted in widespread deforestation, and China is currently the world’s second largest emitter of carbon dioxide. Recently the government has introduced several policies encouraging environmentally sustainable production, such as a tax structure favouring environmentally sound businesses, investment in improving combustion mechanisms and the creation of a public transport system that relies solely on natural gas. While these policies have potential, the Chinese government has remained fearful that over-regulation will have an adverse effect on foreign investment levels, and have favoured economic growth over environmental protection. However, continuing exploitation of natural resources will have a detrimental effect upon economic development, as water and air quality declines and acid rain expands, further debilitating the nations fragile agricultural industry. One World Bank report estimated that by 2050, China’s economic growth would be restricted by 10% because of poor environmental standards.
The process of globalisation has undoubtedly proved beneficial to the Chinese economy, as all regions have experienced improving living standards despite regional disparities. The Chinese government, however, is facing several potential threats to China’s economic development, such as excess capacity, income inequalities and declining environmental standards. Globalisation has meant that failure to address these issues affectively will not only adversely affect the Chinese economy, but the entire world.
Thankyou to anyone who replies
If theres anything in there that poeple would like to use, feel free.
Analyse the impact of globalisation on a developing economy and the strategies used in the economy to promote economic development
Globalisation refers to the integration of individual economies and culture that has occurred in recent decades as social and political barriers dividing nations have been diminished. The economic reforms of Deng Xiaoping in 1978 liberalised the Chinese economy, allowing the nation to exploit the benefits of foreign investment and trade, and resulting in significant impacts upon the nations political, social and economic spheres. China’s integration with the global economy, coupled with it’s movement from a command, planned economy to a market based structure, has resulted in an unprecedented growth rate, averaging 10% increases in GDP throughout the 1990’s. The nations has also experiences significant improvements relating to economic development, with its Human Development Index (HDI) rising 16 places throughout the previous decade to be currently ranked 94th. However, this figure disregards the income inequality that has plagued the nation, which has virtually left the nations rural population without any of the benefits globalisation has created. The government is currently considering the implementation of policies that will encourage economic growth in underdeveloped regions while promoting China to the global economy.
In recent decades the Chinese government has realised the potential benefits of a liberalised economy, and has subsequently dismantled majority of the tariffs, subsidies and quotas that create artificial barriers for foreign competition. This improves global economic efficiency, by allowing nations to specialise in the production of goods and services in which they have a low opportunity cost, or a comparative advantage. The increased foreign competition has also forced domestic producers to improve efficiency to remain economically viable. As a result, China’s economy is currently operating at a productivity level that severely outperforms its efforts prior to liberalisation.
China has become a pivotal nation in regards to the flow of intermediate goods through the global economy, providing an ideal location for labour intensive production. From 1995-2004, China’s importation of consumer goods doubled, from $US42.2 billion to $US 78.7 billion, while imports for further processing tripled, from $US29.8 billion to $US81.9 billion. Similarly, China’s export base primarily consists of the processed imports from TNC’s. The process of globalisation has resulted in the PRC becoming a major contributor to the world’s productivity levels, and by exploiting this; the economy has managed to derive significant improvements in economic development through improvements to it’s productive capabilities and GDP per capita.
The most substantial impact globalisation has had upon the Chinese economy is the restructuring of the highly populated eastern areas from agricultural and cottage industry to export orientated labour intensive manufacturing. This development can be attributed to the expansion of Foreign Direct Investment (FDI) from Transnational Corporations (TNC’s). Throughout the previous decade, China’s inflow of FDI has increased at an average annual rate of 40%, and is currently the world’s second highest recipient, at $US450 billion per year. TNC’s have been attracted to the Chinese economy to exploit the nations abundance of inexpensive labour, and it has become the worlds ideal location for labour intensive manufacturing industries, such as footwear, textles and toys They have also been keen to take advantage of China’s fixed currency level, which is currently fixed against the $US, and is substantially undervalued, making investment in China inexpensive. Rapidly increasing FDI levels have dramatically appreciated average weekly earnings levels, reduced unemployment and substantially improved China’s productive capacity – all factors that have contributed to China’s position as the worlds 7th largest economy, with a GDP of $US1.4 trillion.
The exponential increase of incoming FDI flows to China has created several issues that threaten the nations economic development. China has managed to contain underlying inflationary pressures because of high competition within the labour market forcing employees to accept low wages. However, immense investment has resulted in a tremendous expansion of the nations productive capacity, which has created difficulties for businesses in generating adequate returns upon their capital investment, as supply is outperforming demand. For instance, in 2002 China had the capacity to produce 2.8 million automobiles, however only 1.8 million were demanded. Economists are concerned that China will eventually represent an enormous inefficiency in the allocation of resources.
The Chinese government has recently implemented several measures to reduce investment in the Chinese economy to prevent it from ‘overheating’. In October 2004, the government increased the cash rate by 25 basis points, the first incidence ever of the utilisation of monetary policy. While this has had little impact upon investment, it has served as a warning that the government would be willing to increase interest rates in the future. It is also intending to lower economic activity by minimising fixed capital expenditure in the 2005 budget.
The economic effects of globalisation have resulted in severe inequality within the global economy. In 2003, 57% of China’s GDP was produced solely along it’s eastern coast, while the western half of the nation contributed 9%. These statistics can be primarily attributed to the direction of FDI flows, with 86.4% of international investment in the eastern industrial centres. The inequality this has created in economic development is evident when examining the HDI levels of individual regions. Shanghai, the nations economic centrepiece has a HDI of 0.853, which would qualify it as a highly developed nation under the United Nations Development Program. In contrast, however, Tibet has a HDI of merely 0.512, just exceeding the standard of undeveloped nations. While economic development in China’s west has not decreased, it will be essential for the government to create greater equality to limit poverty and to ensure political and social stability within the nation.
To discourage economic inequality, China’s government has introduced several ‘pro rural’ policies. It is intending to implement a more extensive social security system, and has committed itself to ensuring 100% of China has access to a sanitary water supply by 2020, compared to the current level of 75%. It has introduced direct subsidies to farmers, a reduction in agricultural taxes and maintains substantial tariffs to prevent foreign producers entering the market. These policies are economically unviable, and indicate a degree of resistance to globalisation within China. By maintaining this protection the government is attempting to protect the domestic industry and foster economic development in the western regions, however, in actuality, they may prove counterproductive by utilising China’s resources inefficiently.
In recent years, China has attempted to improve its productivity and economic development by implementing a policy of compulsory secondary education and subsidising the nations tertiary institutions. This is intended to alter China from a low skilled manufacturing economy to a highly skilled services economy, in imitation of highly developed nations. This will dramatically improve the workforce’s international competitiveness, as the nations mammoth population will force wages to remain low, while higher skill levels will attract a higher degree of foreign attention. However, once again, the government’s commitment to improving educational standards has neglected the rural community, further entrenching the nations income inequalities.
Throughout the 1990’s the Chinese governments sole objective was to foster economic growth, while neglecting the detrimental effects this process may have upon economic development, such as income inequality, as discussed above, and a deterioration of environmental standards. In a recent report, the World Health Organisation estimated that China possessed seven of world’s ten most polluted cities, largely as a result of sulphur dioxide and soot emissions from manufacturing plants. As a result, acid rain currently falls on 30% of China, further reducing the nations living standards. Increasing demand for property from TNC’s has resulted in widespread deforestation, and China is currently the world’s second largest emitter of carbon dioxide. Recently the government has introduced several policies encouraging environmentally sustainable production, such as a tax structure favouring environmentally sound businesses, investment in improving combustion mechanisms and the creation of a public transport system that relies solely on natural gas. While these policies have potential, the Chinese government has remained fearful that over-regulation will have an adverse effect on foreign investment levels, and have favoured economic growth over environmental protection. However, continuing exploitation of natural resources will have a detrimental effect upon economic development, as water and air quality declines and acid rain expands, further debilitating the nations fragile agricultural industry. One World Bank report estimated that by 2050, China’s economic growth would be restricted by 10% because of poor environmental standards.
The process of globalisation has undoubtedly proved beneficial to the Chinese economy, as all regions have experienced improving living standards despite regional disparities. The Chinese government, however, is facing several potential threats to China’s economic development, such as excess capacity, income inequalities and declining environmental standards. Globalisation has meant that failure to address these issues affectively will not only adversely affect the Chinese economy, but the entire world.
Thankyou to anyone who replies
If theres anything in there that poeple would like to use, feel free.