The document discusses globalization and its impacts. It notes that globalization has lifted hundreds of millions out of poverty in China and India as they experienced high economic growth rates attributed to increasing globalization. However, there is growing opposition in developed countries to globalization. It then discusses specific impacts of China's globalization on developed countries, including cheaper Chinese exports putting pressure on domestic producers, China gaining technological innovations from developed countries to produce cheaper similar products, and China manipulating its currency to enhance international competitiveness.

1. Benedetta Piva Economic Development
Fall Semester 2011
Over the past twenty-five years, China has experienced the highest growth rate I the world and also the most dramatic
reductions in poverty. The headcount of the poor in China fell from 634 million in 1981 to 128 million in 2004. India
has enjoyed similar success in growing their economy and reducing the headcount of the poor. The high growth rates of
China and India is attributed in large part to increasing globalization. Therefore, globalization is lifting hundreds of
millions of people out of poverty. Yet, there is growing opposition in many developed countries to globalization.
Discuss.
China is a great example of how a country can take advantage of globalization to grow and
reduce national poverty. Adoption of new rule of law, of commitment to competition, of widespread
use of English, of foreign education, and of many foreign laws and institutions are not just updating
Chinese institutions but transforming Chinese civilization. All of China’s economic successes can
be associated with liberalization and globalization, and each aspect of globalization has brought
China further successes. Never in world history have so many workers improved their standards of
living so rapidly.
China’s globalization successes has strongly influenced other countries. India has learned from
China the advantages of a more open economy. India used to have extremely protectionist trade
policies, an unwillingness toward foreign direct investment, and a remarkable network of domestic
socialist economic controls, combined with strong foreign economic and political ties to the old
Soviet Union. The China’s success showed to India that abandoning the old hostility to
globalization do not lead to prosperity. While India started later than China and moved more
slowly, India’s economic growth rates have doubled. The number of people in absolute poverty has
declined rapidly. Exports have boomed and foreign exchange reserves are ample now.
China’s globalization has numerous impacts on many developed countries. First of all, products
that China exports all over the world are most of the time a lot more cheaper than domestic product.
The pricing policy Chinese manufacturers adopt is often considered dumping: products they export
to other countries have a price a lot below the price charged in their home market. This cannot be
explained through normal market competition. Dumping can force established domestic producers
out of a market and can lead to Chinese monopolistic position. This leads to loss of jobs and, thus,
unemployment in developed countries because developed countries-based companies cannot be
competitive in their markets and they often have to reorganize their production structure going
outside their country to regain competitiveness.
Moreover, China and other countries that are taking advantage of globalization take, often with
no rights, technological innovations from well-advantage developed countries and exploit them to
produce and sell in international markets products that have the same technological level of the
others but at a lower price. They can do this because they do not concentrate their efforts on quality,
they are only focused on selling the cheapest products on the market. Considering the current
international recession, it is hard for developed countries-based companies to compete in their
market offering products that have the same technological standards at a higher price, even though
with better quality.
Another tool countries like China use to success in international markets is currency
manipulation: China manipulates the value of its currency to enhance its international
competitiveness. Currency manipulation is one of the most important tools China is using to give its
exporters an upper hand. Doing so, Chinese products result even more competitive in international
markets and developed countries-based companies cannot keep up with them. This leads to a huge
loss of competitiveness of developed countries-based companies.

2. List and briefly describe the principal causes of high population growth in less developed countries and the major
consequences. Explain why fertility rates are falling in some developing countries and not in others.
There are many causes of population growth in less developed countries. One of the most
relevant is education of women: in less developed countries women are less educated and tend to
have more children. This is because in these countries most of the time women are in charge and
allowed only of taking care of the family and children. They also have inferior roles and low status:
they are not allowed to study, thus they are not specialized in any kind of job. Women’s main task
does not include involving in activities done out of the extended family network. Therefore, they do
not feel the opportunity cost of doing something different from child-rearing activities. If women
are more educated they will have the change to work and to gain money. If so, they will have less
time to spend rearing children. The time they will spend outside the family will be valuable and,
together with wages they will gain, it will lessen the importance of having a large family. According
to this argument, population growth is a natural outcome of women’s lack of economic opportunity.
If women’s health, education, and economic well-being are improved along with their role and
status in both the family and the community, this empowerment of women will inevitably lead to
smaller families and lower population growth. Another cause of high population growth is the set of
religious believe and traditional value that is often particularly strong in less developed country.
Having a large family is seen as desirable: it is a value that every family has to achieve. Moreover,
no birth control is another relevant causes of population growth. In less developed countries there is
no or not much access to birth control and birth prevention. This is manifested in high fertility.
There are several consequences of high population growth. First of all, rapid population growth
lowers per capita income growth in most less developed countries, especially those that are already
poor, dependent on agriculture, and experiencing pressures on land and natural resources. High
population growth also worsens inequality because it falls most heavily on the poor. Poor are the
ones who are made landless, suffer first from cuts in government health and education programs,
bear the brunt of environmental damage, and are the main victims of job cuts due to the slower
growth of economy. Moreover, large family size and low incomes restrict the opportunities of
parents to educate all their children. At the national level, rapid growth rate causes thinly-spread
educational expenditures, lowering quality for the sake of quantity. Therefore, the stock of human
capital and its quality is reduced. This effects economic growth in less developed countries. Indeed,
high fertility harms the health of mothers and children. It increases the health risks of pregnancy
and child mortality rates. High population growth also boosts food, water, facilities, and services
(like health care) requirements in less developed countries. Another consequence of this
phenomenon can be seen in an environment perspective. High population growth contributes to
environmental degradation in the form of forest encroachment, deforestation, declining fish and
animal stocks, inadequate and unsafe water, air pollution, and urban congestion. Rapid population
growth can also play a role in the international migration. International migration, both legal and
illegal, is caused by excess of job seekers, caused by rapid population growth, over job
opportunities in less developed countries.
In developing countries like Brazil, Russia, India and China fertility rates are falling because
social, socio-cultural and economic conditions in these countries are changing and are approaching
to conditions in developed countries faster than in other developing countries. People, especially
women, start to see education as more valuable, thus families spend more to educate their children.
Discrimination against women is getting lower in those developing countries: women’s status and
role within the family is better than before. Therefore women can study and start their careers
outside the extended family network. This raises the opportunity cost of doing different activities
from the traditional child-rearing activities: having a large family with many children is getting less
valuable than job career and success. Indeed, urbanization and mobility of people toward cities
lower the importance of the family network and ties, traditional value and religious believes. All
these factors contribute to lowering fertility rates in those developing countries.

3. What is the relationship between the age structure of population and its dependency burden? Is the dependency burden
higher or lower in developing countries? Why?
The dependency burden is the proportion of the total population aged 0 to 15 and 65+, which is
considered economically unproductive and, therefore, not counted in the labor force. The youngest
the population is, the lower the dependency burden is because there are more people considered
economically productive which can support and take care about the economically unproductive
ones. The dependency burden varies over time and among populations in ways that have important
economic and social consequences. The distribution of population by age is influenced by fertility
and mortality rates. Changes in mortality generally affect the age structure of population much less
than changes in fertility because mortality declines typically affect all ages, while fertility declines
affect the number of new entrants into the population.
The developing world is currently going through a period of very rapid demographic change.
Birth rates have dropped rapidly in recent years as people, and especially women, are more
educated and have smaller families. Life expectancy in developing countries is rising thanks to
better environmental and work condition, better health care, better social and economic conditions,
and better life style in general. The population growth we can see in developing countries is caused
primarily by a sustained reduction in mortality. Improved living standards, better nutrition, clean
water supplies, expanded access to health services as immunization cause very rapid mortality
reductions. The young age structure of population in developing countries is also the result of high
fertility and rapid population growth in recent years. With a large proportion of the population
under age 30, we can assume a further growth over the next years because these young people will
produce more births than deaths because they will build families and will grow old (thanks to higher
life expectancy), even if their fertility is decreasing. Since these countries have a young structure of
population their dependency burden is lower than in developed countries.
In next decades we can expect that dependency burden in these countries will become more and
more higher as in developed countries, where birth rate is near zero, life expectancy is at the highest
level, and, therefore, there is a higher percentage of total population that is economically
unproductive, mostly composed by older people.