Analyse The Impact Of Globalisation On An Economy Other Than Australia

1263 words - 6 pages

China has a unique and unusual economy. The country runs under a split economy, where it is partially communist, and partially free-market. The recent emergence of China as one of the world's major economic powers is resulting in greater regional integration in East-Asia, and the world. Its integration within the economy has indicated a tremendous move toward Globalisation, and the removal of the barriers that have previously surrounded the country.The integration of China into the world trading scene has been shown through its increase in international trade flows, growth of investment between itself and other nations, the transfer of technology, increase in international financial flows ...view middle of the document...

China was beginning to show a desire to access and adopt global technology, (although the special economic zones were very innovative), develop a financial system which could both attract and cope with inflows and outflows of savings (which China had yet to properly achieve). China was and is moving towards upholding a tolerance of new cultural traits, and a willingness to compromise in intergovernmental negotiations and be involved in multilateral global institutions.China entered the World Trade Organisation (WTO) in 2001, which impacted hugely on its level of Globalisation, and emergence as a serious world trader. Its admittance at the Doha Conference identified it as the 143rd member of the 146 nation WTO. China's admission reflected its status as an economic superpower, and opened a huge market of 1.2billion people for global exporters. This membership also increased China's access to other countries markets, and it established a firm place on the market. However, its financial system is still developing, as is its legal infrastructure (such as commercial laws and regulations that protect private property rights, investors and creditors), and some problems were discovered with its entrance into the WTO. China will continue to benefit from its position as a low-cost producer, but will have to reform aspects of its agriculture and financial services industries and SOE's to comply with WTO rules. Also China is yet to achieve a sound history of trade - and is still considered a fairly new, but steadily growing, economy.In 1980 an 'open door' policy was adopted towards foreign trade and investment in special economic zones, attracting foreign investment through a range of incentives offered such as low tax rates, exemption from import duties, cheap labour power and less stringent regulations. Investment into China now seems extremely appealing, as it is expected to take over the USA in the not too distant future. However, the Chinese financial system is still "immature, the reason the high savings rates are not resulting in ever better rates of growth" (David James), he says that China's equity market is dominated by SOE's that are heavily influenced by the communist sector of the economy. The State-owned banks have become questionable, and risks of investing in China are very high, unless disciplines are observes. The potential for investment gain is considerable and the enormous size of the Chinese market has been opened up by its global integration and it is irresistible to many.Economists have said that China's success lies mostly in its exports, but because China is so large, economist are also saying that it cannot rely solely on trade for its economic growth. It has a large saving rate of...

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