China - Globalisation essay

HSC
Economics
2015

Assessment
Task
1:
Globalisation
Case
Study

The
impact
of
globalisation
on
the

Chinese
economy.

Name: Patrick
Hendy
BOS
Number: 28381670
Word
Count: 4088
Patrick
Hendy
-‐
28381670

Page
1

The
phenomenon
of
globalisation
has
had
signiJicant
impact
on
the
Chinese
economy

following
Deng
Xiaoping’s
Gǎigé
kāifàng
(reform
&
opening
up)
reforms
in
1978.

Globalisation
refers
to
the
process
of
increased
integration
between
different
countries

and
economies
and
the
increased
impact
of
international
inJluences
on
all
aspects
of
life.

These
impacts
have
been
many
and
varied
in
scope
and
advantage,
for
the
most
part

resulting
in
greater
standards
of
living
and
increased
international
economic
power,

however
have
often
had
negative
impact:
socially,
environmentally
and
economically.

Furthermore,
globalisation
in
recent
decades
has
created
a
number
of
social
and

environmental
issues
which
the
current
government
seeks
to
change.

Before
delving
into
the
full
impacts
of
globalisation
on
the
Chinese
economy,
it
is

important
to
Jirst
understand
a
number
of
terms
that
will
be
used
throughout
this
essay.

The
most
commonly
used
under
the
umbrella
of
globalisation
is
economic
growth,
an

important
concept
in
the
takeoff
of
the
Chinese
economy,
referring
to:
an
increase
in
the

capacity
of
an
economy
to
produce
goods
and
services,
compared
from
one
period
of

time
to
another.
Economic
development
is
a
highly
related,
but
a
broader
topic
than

economic
growth,
referring
to:
the
sustained,
concerted
actions
of
policy
makers
and

communities
that
promote
the
standard
of
living
and
economic
health
of
a
speciJic
area,

or
more
broadly,
the
quantitative
and
qualitative
changes
in
an
economy.
Lastly,

environmental
sustainability
is
used
to
refer
to
the
maintenance
of
the
factors
and

practices
that
contribute
to
the
quality
of
environment
on
a
long
term
basis

The
1978
economic
reforms
followed
decades
of
poor
economic
performance
from
the

historically
powerful
economy:
the
great
depression
of
the
1930s
dragged
down
the

high
ratio
of
foreign
trade
to
GDP
which
the
strong
manufacturing
sector
relied
on,
and

before
it
was
able
to
recover,
the
Chinese
Civil
War
between
the
communists
and
the

nationalists
disrupted
any
economic
recuperation.
Further,
the
1958-‐1961
series
of

economic
and
social
reforms
known
as
the
‘great
leap
forward’
launched
under
the

communist
agenda
saw
further
disruption
as
the
economy
stagnated,
largely
due
to

poor
quality
of
life
associated
with
the
famine
and
purges
killing
tens
of
millions.

Once
Deng
Xioaping
seized
control
of
the
country
following
the
reign
of
the
gang
of
four

in
1978,
he
set
on
a
path
to
enact
ambitious
economic
reforms
to
open
the
Chinese

economy
to
the
world.
The
Chinese
government
chose
to
open
up
in
a
bid
to
‘Jix’
the

broken
economy
which
had
stagnated
in
recent
years,
through
offering
the
wealth
of

cheap
Chinese
labour
which
had
historically
made
Chinese
manufacturing
powerful
to

foreign
countries,
bringing
foreign
investment
in
and
boosting
both
urbanisation
and

living
standards.
The
earliest
round
of
reforms
saw
the
liberalisation
of
the
agriculture

sector,
allowing
crops
to
be
sold
at
a
market
mechanism
price
once
production
quotas

were
reached,
boosting
efJiciency
as
farmers
sought
the
greatest
proJits.
In
conjunction

with
this,
a
number
of
‘Special
Economic
Zones’
were
established
in
the
coastal

provinces
allowing
for:
special
tax
incentives
for
foreign
investment
and
greater

Patrick
Hendy
-‐
28381670

Page
2

dependence
on
foreign
trade,
creating
zones
which
relied
on
foreign
investment
for

growth.
The
most
successful
of
these
was
the
Shenzhen
economic
zone,
with
GDP

growing
at
an
annual
average
of
28.5%
over
the
last
30
years
compared
with
the
10%

national
average,
transforming
the
zone
from
a
Jishing
village
into
the
thriving
economic

haven
it
has
become,
home
even
to
a
stock
exchange.

1
The
creation
of
these
economic
zones
such
as
that
in
Shenzhen
formed
the
engines
of

growth
for
the
stagnant
Chinese
economy.
China’s
economy
has
been
able
to
grow
at

such
a
high
rate
of
growth
(10%
GDP
growth
against
US
growth
which
is
hovering

around
2%)
because
of
its
transformation
in
four
ways.
Firstly,
the
movement
of
the

economy
from
the
socialist
model
which
allowed
for
the
stagnation
of
the
economy

under
inefJicient
State
Owned
Enterprises
(SOEs)
to
the
brand
of
capitalism
the
Chinese

government
prefers
to
call
‘Socialism
with
Chinese
Characteristics’.
Secondly,
the

movement
from
being
an
agricultural
economy
to
an
industrialised
economy,
and
a
rural

peasant
based
society
to
an
urban
based
society.
The
problem
of
urbanisation
however

will
be
addressed
later
in
this
essay.
Thirdly,
China
has
moved
from
being
an
economy

with
a
domestic
focus,
to
one
with
a
trade
oriented
focus,
highly
integrated
with
the

global
economy
to
capture
the
beneJits
of
globalisation,
allowing
the
strong
Chinese

manufacturing
sector
to
export
to
a
far
wider
range
of
wealthier
consumers
on
the

global
stage.
Lastly,
China
has
become
a
major
world
economic
power,
contributing

substantially
to
global
output,
economic
growth,
trade
and
investment,
allowing
China

Wikipedia,
(2014).
Economic
history
of
China
(1949–present).
[online]
Available
at:
hGp://en.wikipedia.org/1
wiki/Economic_history_of_China_(1949%E2%80%93present)
[Accessed
23
Nov.
2014].
Patrick
Hendy
-‐
28381670

Page
3

to
exploit
its
international
power
by
creating
beneJicial
trade
factors
for
itself
in
trade

agreements
and
the
like.

The
InJluence
of
globalisation
on
China
has
been
quite
signiJicant
with
economic
growth

hovering
around
8-‐10%
in
the
1990s
and
2000s,
with
the
main
drivers
being
business

investment
and
net
exports.
A
signiJicant
part
of
this
has
been
the
role
of
Foreign
Direct

Investment,
with
investment
spending
contributing
45%
of
GDP
in
2006.
This
is
largely

due
to
the
encouragement
by
the
Chinese
government
through
the
concessions
allowed

by
the
special
economic
zones
in
order
to
attract
foreign
business.

This
reliance
on

foreign
investment
for
growth
has
caused
the
Chinese
economy
to
become
very

dependant
on
the
animal
spirits
of
foreign
investors
which
has
often
been
detrimental

as
can
be
seen
in
the
drops
in
growth
caused
by
the
Asian
Financial
Crisis
and
the
GFC,

and
subsequent
falling
growth
due
to
poor
investor
conJidence.
In
recent
years,
the

government
of
Xi
Jinping
has
undergone
a
restructuring
process
of
the
economy,

funneling
the
rising
wages
and
the
developing
middle
class
into
increased
expenditure

in
order
to
reform
economic
growth
to
hinge
on
consumption,
rather
than
foreign

investment.
This
has
been
particularly
pertinent
given
the
dwindling
labour
force
as
the

Chinese
population
ages.
This
change
in
policy
has
largely
been
due
to
the
Chinese

growth
slowdown
as
growth
drops
from
above
10%
to
around
7%
as
Jirms
seeking
dirt

cheap
labour
now
turn
to
countries
who
have
not
undergone
the
changes
in
living

standards
and
wages
China
has,
compared
to
the
potential
of
an
over
1
billion
consumer

economy.

Future
growth
patterns
are
predicted
to
drop,
with
pessimistic
forecasts

clocking
in
at
3-‐4%
over
the
next
couple
of
years.
It
is
important
to
note
here,
that
this
is

a
signiJicant
level
of
growth
for
an
economy.
However,
these
forecasts
are
largely
due
to

the
predicted
slowing
due
to
restructuring
to
become
a
consumption
based
economy,
as

well
as
the
recognition
of
the
role
of
one
time
boosts,
such
as
dropping
fertility
rates

(freeing
up
women
for
the
labour
market),
and
increasing
urbanisation
(increasing

efJiciency).
Therefore,
we
can
see
that
on
the
simple
Jigures
of
economic
growth,
China’s

strong
manufacturing
sector
and
abundance
of
cheap
labour
have
lead
it
to
gain

signiJicant
economic
momentum
in
the
process
of
globalisation,
and
continues
to

despite
a
projected
slowdown.

Patrick
Hendy
-‐
28381670

Page
4

2
While
the
Chinese
economy
has
made
leaps
and
bounds
in
terms
of
human
development

and
the
non-‐material
indicators
of
living
standards.
Over
the
last
25
years,
Chinese

economic
growth
has
brought
400
million
people
out
of
poverty,
living
on
less
than
$1

per
day.
Though
this
is
a
signiJicant
reduction
in
poverty,
it
still
leaves
a
lot
to
be
desired,

especially
considering
the
sheer
number
of
Chinese
citizens
left
in
poverty
by
The
Great

Leap
Forward.
Thus,
we
see
that
in
the
Chinese
economy
as
of
2009,
362
million
people

lived
on
under
$2
a
day
(more
than
10
times
more
people
than
the
Australian

population).
In
dragging
so
many
citizens
out
of
poverty,
economic
growth
has
had
a

signiJicant
impact
on
Chinese
development,
with
China’s
Human
Development
Index

rising
from
0.368
in
1980
(in
today’s
terms,
that
would
equate
to
the
4th
lowers
HDI)
to

0.719,
bringing
it
to
91st,
between
Saint
Vincent
and
and
Tunisia.
The
human

development
index
measures
Life
Expectancy
at
Birth,
Mean
Years
of
Schooling
and
GNI

per
capita
with
the
intention
that
those
indicators
have
high
correlation
with
other

standard
of
living
statistics.
For
the
most
part,
despite
the
prestigious
Chinese
position

as
second
largest
economy
in
the
world,
this
statistic
rings
true,
due
to
the
sheer
size
of

the
population.
While
the
growth
in
human
development
has
been
largely
because
of

powerful
economic
growth
over
the
last
few
decades,
the
act
of
foreign
investment

beyond
the
monetary
gain
as
well
as
the
social
aspect
of
opening
up
has
allowed
the

Chinese
economy
to
advance
signiJicantly
in
terms
of
development.
The
role
of
TNCs
in

spreading
greater
skills
and
knowledge
throughout
the
country
as
well
as
the

importation
of
Western
views
on
spending
and
consumption.
These
views
have
helped

to
drive
the
emerging
middle
class,
allowing
them
to
utilise
their
wealth
to
raise
their

living
standards
through
consumption
along
with
demanding
a
place
in
political
action,

driving
government
reforms
which
have
had
a
signiJicant
impact
on
economic

development,
particularly
through
newly
created
social
welfare
related
policies.
A
major

problem
in
terms
of
living
standards
in
China
however,
come
as
a
result
of
the

The
Economist,
(2014).
Building
the
dream.
[online]
Available
at:
hGp://www.economist.com/news/special-‐2
report/21600797-‐2030-‐chinese-‐ciTes-‐will-‐be-‐home-‐about-‐1-‐billion-‐people-‐geVng-‐urban-‐china-‐work

[Accessed
16
Nov.
2014].
Patrick
Hendy
-‐
28381670

Page
5

impoverished
rural
populace,
who
are
the
root
cause
of
statistics
such
as
that
of
1
in
4

Chinese
citizens
unable
to
access
clean
drinking
water.
The
rapid
development
caused

by
the
implementation
of
Special
Economic
Zones
and
opening
up
for
manufacturing

has
essentially
created
a
two
speed
economy
by
which
the
rural
regions
feel
few
of
the

beneJits
that
globalisation
has
brought
to
China.
In
terms
of
the
impact
of
globalisation

on
economic
development
and
living
standards,

the
importation
of
social
reform
as
well

as
growing
economic
output
have
greatly
improved
economic
development,
as
it

continues
to
rise,
even
growing,
into
the
future
despite
a
projected
slowdown
in
growth.

GDP
Per
Capita
by
Province

3
One
of
the
major
social
problems
stemming
from
globalisation
in
China
has
been
the

increase
in
inequality.
Following
Deng
Xiaoping’s
reforms,
income
inequality
has

increased
signiJicantly,
largely
due
to
the
fact
that
under
Mao’s
communism,
all
citizens

were
for
the
most
part,
equally
impoverished.
In
comparison,
Deng’s
reforms
meant
the

quicker
expansion
of
the
coastal
regions
surrounding

special
economic
zones,
with

Deng
explicitly
stating
in
a
1986
interview
“We
permit
some
people
and
some
regions
to

become
prosperous
Jirst,
for
the
purpose
of
achieving
common
prosperity
faster.”

However,
this
growth
has
not
evened
out
as
urbanization
continues,
urban
incomes
rise,

and
rural
workers
are
further
oppressed.
In
fact,
between
2002
and
2007,
the
ratio

The
Economist,
(2014).
Building
the
dream.
[online]
Available
at:
hGp://www.economist.com/news/special-‐3
report/21600797-‐2030-‐chinese-‐ciTes-‐will-‐be-‐home-‐about-‐1-‐billion-‐people-‐geVng-‐urban-‐china-‐work

[Accessed
16
Nov.
2014].
Patrick
Hendy
-‐
28381670

Page
6

between
the
income
of
the
top
and
bottom
10%
increased
from
19:1-‐25:1.
At
this
point

of
discussion,
the
question
of
urbanisation
must
be
raised.
Urbanisation
has
been
one
of

the
key
drivers
of
Chinese
growth
through
the
last
few
decades,
with
a
current

urbanisation
rate
of
52%.
Urbanisation
for
the
most
part
occurs
because
of
economic

growth
and
development.
As
areas
such
as
Shenzhen
are
given

status
as
special

economic
zones
and
wages
and
living
standards
in
those
areas
rise,
more
people
are

attracted
to
those
areas,
and
urbanisation
occurs.
The
process
of
urbanisation
allows

economies
of
scale
to
take
effect
and
allow
the
workers
to
become
more
efJicient.
Thus,

urbanisation
has
a
self
perpetuating
positive
effect
on
growth.
However,
the
Chinese

government,
and
particularly
local
governments
set
urbanisation
goals
in
order
to
fuel

the
already
growing
growth.
However,
there
is
a
conJlict
of
policies
in
place
such
that

there
is
an
active
disincentive
to
urbanise
for
rural
citizens.
Firstly,
the
hukou
system
in

place
-‐
a
form
of
land
titling
-‐
makes
it
extremely
difJicult
for
a
migrant
to
lose
the
name

as
rural
Chinese,
against
whom
there
is
signiJicant
discrimination
in
cities.
If
China’s

level
of
urbanisation
was
measured
via
hukuo’s,
it
would
only
be
36%.

The
signiJicance
of
these
is
that
it
is
the
hukuo,
not
the
place
of
residence
which

determines
the
level
of
welfare
entitlements
a
citizen
is
entitled
to.
Moreover,
this

applies
to
the
children
of
a
migrant
as
well.
Thus,
upon
moving
to
an
urban
setting,
a

citizen
and
their
children
will
not
be
afforded
the
level
of
welfare
to
which
they
should

be
entitled
due
to
their
residence,
and
therefore
there
is
no
beneJit
to
moving
to
the
city

in
that
respect.
Likewise,
this
pertains
to
education,
consigning
migrant
children
to

second
rate
private
schools
over
the
public
schools
populated
by
the
children
of

urbanites.
In
regards
to
discrimination,
one
third
of
urbanites
would
not
like
to
live
next

to
a
migrant,
against
one
in
ten,
who
would
not
like
to
live
next
to
a
poor
person.

Furthermore,
migrants
are
often
collected
in
slums
such
as
the
Dongxiaokou
suburb

North
of
Beijing,
a
scene
of
dickensian
style
poverty
with
migrants
crammed
into
‘tiny

brick
shacks
off
muddy,
rubbish-‐strewn
streets’.
Perversely,
of
those
surveyed,
only
one

third
of
migrants
found
an
urban
hukou
important,
as
they
were
afraid
of
losing
their

right
to
hold
land.
This
also
pertains
to
the
treatment
of
local
governments
of
land,

where
‘upstairsing’,
the
process
of
slumming
villagers
in
order
to
take
their
land
and

generate
income
is
common.
As
such,
there
is
an
obvious
divide
between
the
urban

regions
of
the
coast
and
the
northern
and
eastern
regions,
socially.
Compounded
by
the

differences
of
often
$16,000
GDP
per
capita
in
provinces
like
Zhejiang,
and
$1,000
per

head
in
provinces
like
Tibet,
demonstrates
signiJicant
social
and
economic
inequality

within
the
country.
If
barriers
to
migration
were
removed
however,
labour
markets

would
be
able
to
integrate
and
efJicient
allocation
of
resources
would
be
able
to
be

achieved.
As
a
result
of
inequality,
China’s
Gini
index,
though
having
risen
signiJicantly
is

still
only
42.1,
placing
it
100th.
Largely
as
a
result
of
globalisation,
the
distinction

between
urban
and
rural
life
must
be
tackled
by
the
government
beyond
simply

imposing
urbanisation
goals
which
simply
exacerbate
problems,
as
local
governments

slum
more
civilians
under
the
guise
of
‘urbanisation’.
Considering
that
20%
of

households
pay
91%
of
tax,
the
most
effective
method
in
tackling
inequality
would
likely

Patrick
Hendy
-‐
28381670

Page
7

be
Conditional
Cash
Transfer
programs
-‐
distributing
money
based
on
outcomes
such
as

enrolling
children
in
school.

If
Xi
Jinping’s
government
comes
through
with
reforms

promised
for
the
hukou
system,
inequality
as
a
result
of
globalisation
may
be
decreased

in
the
near
future
as
incomes
and
standards
of
living
rise
elsewhere
across
the
board.

China’s
Unemployment
Rate

4
Another
serious
economic
problem
stemming
from
globalisation
in
China
is
the

unemployment
in
the
country.
As
China
underwent
reforms
for
opening
up
and

liberalising
internal
markets,
the
relevance
and
efJiciency
of
State
Owned
Enterprises

(SOEs)
was
undermined
by
new
private
enterprise.
The
two
main
problems
with
SOEs

has
been:
Jirstly,
that
they
are
not
adequately
positioned
in
key
markets,
often
reaching

into
the
economic
lowlands
of
hotel
and
mall
management,
rather
than
dominating
key

industries,
and
secondly
that
they
have
historically
been
far
less
efJicient
than
private

Jirms,
with
a
third
of
SOEs
operating
at
a
loss
in
1996
(largely
due
to
the
added
incentive

for
productivity
in
private
Jirms).
This
problem
was
recognized
in
the
1990s
by
the

government
of
the
time,
resulting
in
large
scale
layoffs
to
the
tune
of
36
million
job

losses
in
the
restructuring.
Resulting
in
a
growth
from
just
above
0%
jumping
to
7%,
a

touch
shy
of
private
Jirm
growth
in
the
period
between
1998
and
2008,
however
in
the

last
few
years
SOEs
have
once
again
been
left
behind
as
private
Jirms
have
grown
in

signiJicance,
leading
Xi
Jinping’s
government
to
promise
to
‘target’
SOEs
in
November

last
year.
These
job
losses
are
further
compounded
by
the
rising
unemployment
among

university
graduates
as
more
university
students
enter,
with
a
predicted
30%
of

graduates
unable
to
Jind
unemployment
in
their
chosen
Jield,
and
2.3
million
of
the
7

Econosseur.com,
(2014).
Unemployment
in
China
-‐
Econosseur.
[online]
Available
at:
hGp://4
www.econosseur.com/2009/02/unemployment-‐in-‐china.html
[Accessed
23
Nov.
2014].
Patrick
Hendy
-‐
28381670

Page
8

million
graduating
cohort
last
year
unable
to
Jind
employment.
With
this
being
said

however,
the
current
ofJicial
unemployment
rate
is
4.1%,
only
0.1%
higher
than

Australia’s
all
time
low
over
the
past
4
decades.
China’s
notorious
lack
of
transparency
is

likely
to
be
coming
into
play
here
as
different
Jigures
are
published
by
different

agencies,
with
the
ministry
of
human
resources
giving
a
4.1%
unemployment
rate,
and

the
economic
planning
agency
NDRC
giving
5.1%.
These
Jigures
are
likely
far
below

actual
unemployment
due
to
the
discrepancies
caused
by
the
aforementioned
hukou

system.
This
is
because
the
ofJicial
unemployment
rate
is
calculated
by
the
number
of

people
registering
for
urban
unemployment
beneJits,
entirely
excluding
those
with
rural

hukous,
among
whom
unemployment
tends
to
be
much
higher
anyway.
In
conjunction

with
this,
there
is
signiJicant
‘hidden’
unemployment
among
those
with
regional
hukous

as
they
choose
to
give
up
work
and
often
return
to
the
farm
or
accept
a
part
time
job,

resulting
in
underemployment.
Furthermore,
more
capable
labour
is
often
funneled
into

underskilled
positions
due
to
shortages
of
jobs
among
high
skill
industries.
These
issues

result
in
the
‘unofJicial’
unemployment
rate
to
hover
around
8%.
The
government
may

not
release
accurate
statistics
due
to
fears
of
uprisings
and
discontent
based
on
wide

scale
unemployment
and
poverty.
Looking
at
ofJicial
charts
since
1980,
there
has
been
a

clear
trend
of
a
sharp
drop
in
unemployment
to
around
2%
(likely
due
to
the
emergence

of
private
companies)
followed
by
a
slow
rise
to
the
current
Jigure.
As
such,
it
is
clear

that
at
least
from
ofJicial
statistics,
globalisation
had
a
signiJicant
impact
in
dragging

many
previously
unemployed
citizens
into
employment,
however
underlying
problems

with
‘Socialism
with
Chinese
features’
including
the
role
of
SOEs
have
resulted
in
a

rising
unemployment
rate.

Environmental
Kuznets
Curve

5

The Economist, (2012). Shoots, greens and leaves. [online] Available at: http://www.economist.com/5
node/21556904 [Accessed 23 Nov. 2014].
Patrick
Hendy
-‐
28381670

Page
9

6
One
of
the
most
obvious
problems
as
a
result
of
globalisation
in
China
has
been
the

environmental
issues
caused
by
the
widescale
‘dirty’
manufacturing.
In
a
pattern

replicating
the
theoretical
environmental
kuznets
curve,
the
environment
has
been

disregarded
in
China’s
explosive
growth
and
it
is
now
that
it
feels
some
international

obligation
due
to
its
now
somewhat
developed
economy
that
it
is
now
attempting
to

meet
its
environmental
responsibilities.
China’s
sustained
high
level
of
economic
growth

has
led
to
high
resource
use
and
environmental
degradation.
China
is
therefore

experiencing

severe
environmental
problems
associated
with
resource
depletion
and

environmental
degradation.
The
signiJicant
issues
for
the
Chinese
economies
as
a
result

of
environmental
degradation
are
three
fold.
Firstly,
the
chinese
economy
faces
resource

depletion
-‐
particularly
in
relation
to
clean
water
-‐
that
make
high
levels
of
sustained

economic
growth
in
the
future
difJicult,
due
to
rising
resource
prices
and
worsening

living
conditions.
As
mentioned,
water
shortages
have
occurred
due
to
inefJicient

irrigation
systems
and
major
cities
now
face
water
shortages
due
to
excess
demand.

Likewise,
there
has
been
signiJicant
loss
of
topsoil
and
subsequent
desertiJication
due
to

removal
of
vegetation
which
has
resulted
in
inability
to
farm
in
certain
areas.
Further,

the
depletion
of
grasslands
and
forests
due
to
the
expansion
of
agriculture
and
industry

may
require
China
to
import
the
products
of
forestry
in
the
future.
Secondly,
the

pollutants
emitted
by
decades
of
manufacturing
with
no
regard
to
the
environment
has

resulted
in
rising
health
related
issues
which
will
further
decrease
possibility
of
growth

if
deaths
and
illness
continue
on
the
projected
course.
The
2007
OECD
report
on

Chinese
environmental
damage
found
that
unless
pollution
is
controlled,
it
will
cause

600,000
premature
deaths
and
20
million
cases
of
respiratory
illness
each
year
by
2020.

Furthermore,
the
report
found
that
up
to
7%
of
China’s
GDP
is
lost
because
of
pollution

and
this
could
rise
to
13%
without
intervention.
Widespread
Chinese
pollution
has

resulted
in
high
incidence
of
respiratory
diseases,
with
China
having
the
world’s
highest

rate
of
chronic
respiratory
disease.
Lastly,
as
the
Chinese
middle
class
grows
further,

demand
for
aesthetically
pleasing
environments
grow,
and
the
new
bourgeois
may

emigrate
in
search
of
better
environmental
conditions
in
which
to
rear
their
children.

Unlike
other
areas
discussed
in
this
essay,
globalisation
has
quite
clearly
severely

negatively
affected
the
Chinese
environment,
which
must
be
addressed
by
the
current

government
in
order
to
ensure
future
growth.
In
that
regard,
Xi
Jinping’s
government

has
been
working
on
a
number
of
environmental
projects,
including
‘eco-‐cities’,
cities

based
on
renewable
living.
The
premier
Li
Keqiang
has
publicly
declared
a
‘war’
on

pollution,
describing
smog
as
nature’s
“red-‐light
warning
against
the
model
of
inefJicient

and
blind
development”,
a
surprisingly
frank
statement
of
prior
wrongdoing,
unusual
for

a
Chinese
government.
This
war
has
thus
far
involved
policies
such
as
stricter
controls

on
emissions
of
carbon
and
smog
forming
pollutants
through
the
new
environmental

protection
policy,
punishing
companies
for
not
meeting
control
targets
(including

Left with Brain, Right with Heart, (2007). The neo-Malthusians and the Kuznets Curve. [online]6
Available at: http://socialist.wordpress.com/2007/10/03/the-neo-malthusians-and-the-kuznets-curve/
[Accessed 23 Nov. 2014].
Patrick
Hendy
-‐
28381670

Page
10

property
seizure
and
prison
sentences
for
company
executives),
coming
into
effect
on

the
1st
of
January
2015.
Environmental
policy
is
one
of
the
main
policy
challenges
of
the

current
government
if
they
wish
to
rectify
the
damage
caused
by
globalisation.

In
assessing
the
impact
of
globalisation
on
the
Chinese
economy,
the
effects
have
been

two
pronged.
Firstly,
in
analysing
simply
the
observed
effect
on
economic
outcomes,

globalisation
has
wholly
been
good
for
China.
Economic
growth
has
lifted
explosively,

resulting
in
good
outcomes
for
economic
development,
living
standards,
and
personal

incomes,
as
well
as
for
the
most
part,
higher
employment
following
opening
up
reforms.

On
the
other
hand,
environmental
sustainability
is
at
an
extremely
poor
standard
and

growing
inequality
can
be
observed.
However,
these
negative
outcomes
are
more
than

counterbalanced
by
the
signiJicance
of
lifting
of
hundreds
of
millions
of
people
out
of

poverty.
As
such,
in
distilling
the
impact
of
globalisation
down
to
key
economic

outcomes,
we
are
presented
with
a
largely
positive
view
of
the
effect
of
globalisation
on

the
Chinese
economy.
However,
the
question
of
globalisation
in
reference
to
China’s

future
potential
as
well
as
its
role
in
global
politics
must
be
asked.
The
question
is

twofold:
how
large
can
China
get,
and
will
China
step
up
to
the
political
plate
as
a
world

leader.
In
answer
to
the
former,
there
is
much
contestation
of
whether
or
not
China
has

the
growth
potential
for
sustained
levels
of
high
growth
over
the
coming
decades.
China

has
a
signiJicant
advantage
over
other
countries
in
that
despite
the
extreme
growth
in

its
industries,
it
still
has
underutilised
resources
in
rural
areas.
If
the
lack
of
efJiciency
of

the
human
resources
being
used
in
rural
areas
was
rectiJied
to
allow
for
new
levels
of

production,
China
is
very
likely
to
hold
the
potential
for
continued
growth.
However,
this

growth
depends
on
the
ability
of
China’s
government
to
reallocate
these
resources
as

well
as
overcome
the
projected
slump
in
growth
as
China’s
economy
restructures.
One

of
the
largest
factors
in
argument
surrounding
potential
growth
is
whether
or
not
a

consumption
driven
economy,
with
China’s
economy
in
its
current
form
continuing
to

lose
manufacturing
business
to
countries
which
have
even
cheaper
costs
of
labour,
can

retain
high
levels
of
growth
under
the
consumption
levels
of
over
a
billion
consumers.

Patrick
Hendy
-‐
28381670

Page
11

Chinese
Foreign
Direct
Investment

‑
7
Perhaps
more
relevant
to
the
impact
of
globalisation
is
China’s
role
politically
‘post’

globalisation.
As
the
US
looks
to
China
to
become
a
globally
responsible
nation,
we
are

seeing
a
curious
reaction
from
China.
China
is
no
longer
simply
the
exporter
for
the

world
market,
it
is
taking
an
active
role
in
promoting
economic
growth
in
countries
such

as
Zambia
whom
China
set
a
new
Special
Economic
Zone
in
2007
in,
funneling
funds

directly
into
the
mineral
rich
economy.
Furthermore
China
is
beginning
to
take
an
active

role
in
countries
where
human
rights
abuses
are
frequent,
such
as
the
recent
trouble
in

Darfur.
While
China
is
making
an
effort
to
act
the
global
power,
the
responsibility
of
its

actions
are
questionable
as
it
hands
soft
loans
to
those
human
rights
abusing
nations,

essentially
bankrolling
genocides,
as
was
the
case
in
Darfur.
China’s
outreach
into
world

politics
have
seemed
somewhat
abortive
as
it
struggles
to
hit
its
stride
as
a
world
leader,

attempting
to
Jind
a
way
to
put
a
‘yellow
river’
style
twist
on
geopolitics
just
as
it
does

capitalism.
There
is
no
doubt
that
China
is
making
an
attempt
to
become
more
than
just

an
exporter,
however
not
in
the
way
it
is
being
urged
to
by
Western
nations.
In
this
sense

therefore,
globalisation
has
quite
signiJicantly
been
positive
in
allowing
China
to
make

an
outreach
into
world
political
systems.
Whether
or
not
China
will
manage
to
Jind
a

suitable
place
for
its
style
of
politics
that
emphasises
the
allowance
of
countries
to
do
as

they
wish
as
long
as
they
are
beholden
to
China,
is
another
matter
entirely.

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