ESSAY TOPIC: Using a country of your choice, illustrate how globalisation can have

different impacts on various groups within the same country? How globalisation can have different impacts on various groups within China?

NAME:

JOSHUA M CHIGWANGWA

ISSUES IN GLOBAL ECONOMY

WORD COUNT :

2 095 words

Question Illustrate how globalisation can have different impacts on various groups within China ?

This essay sets out to discuss the impacts of globalisation on the different social groups in China. Accordingly, this essay will attempt to define globalisation within the context of China. I will discuss the impact of foreign trade and foreign direct investment (FDI) on China s economic growth and the social impact on spatial income distribution on different groups within Chinas rural and urban communities, its impact on gender groups, the inequality between skilled and unskilled labour including its linkages to increased rural urban migration trends. I will conclude that whilst globalisation has promoted Chinas rapid economic growth, it has a negative impact on income distribution and is has a direct causality to inter -provincial inequality, rural urban inequality and widening intra urban social classdivide.

Developing countries in general and for Chinain particular, globalisation has been mainly associated with the 1990s IMF backed structural adjustment policies (SAP s) which encouraged China to ditch a command economy and to embrace market based reforms. Fiss et. al (2005) refers to globalisation within Chinas context as the emergence of capitalism, democratisation or globalisation marked by discursive struggles over social and cultural impacts, and outcomes from these struggles which facilitate or impede acceptance of widespread reforms. Mamman et. al. (2008) argues that globalisation has different meanings to different people, hence in Chinas instance; globalisation has both positive and negative connotations, depending on geographical locations and productive occupation in society.

Economic lobali ation aved t e inese

ay for t e introduction of olitical reforms, separating t e

ommunist Party from t e State organs, removal of state monopolies or patronages

to t e Ruling Party and t e signing of international uman rights treaties, particularly the reaty of International uman and ivil Rights Keping, 4 . Keping 4 argues that

this has seen an increasing number of

hinas citizens, especially academics and the

younger generations no longer submitting to government oppression and instead advocating relatively independent attitudes and responses to government policies and actions. he has seen the emergence of the New Left entre groups opposed to some of the reforms, thus

accommodating democratic views at grass roots levels.

Prior to embracing economic liberalisation, economic origin from its over 3 million

hina experienced growing internal pressures of

hinese growing population, with no industry or 7. hinas economic

trade of sufficient scope to absorb surplus labour W orden et al,

reforms were therefore primarily to increase economic growth and raise economic living standards Benjamin et al, of the reforms to
Figure 1

, with the poverty rate declining from 64% at the beginning 4 ollar, 7.

% in

However, Baddelley

6 asserts that there is little consensus about thereal impacts of

globalisation on global inequality and growth in less developed countries. hina presented itself to the global environment as a market with abundant cheap labour. he World Bank estimates that more than 6 % of reforms since ollar, hinas population was living under $ per day prior to the , hinas G P growth has averaged , %

7 . According to Kuijs

7 , lifting at least

million of people out of poverty he degree of dependence on . to 63, 6% in Yue, . 7 and I increased from S$

foreign trade increased from 4,6% in 47 million in Figure 2 to S$ million in

his surge in

hinas economic performance realisedincreased income inequality propelled

by the rural urban income gap and the growing disparity between highly educated urban professionals, the urban working class society. Kuijs, et al argues that ollar, 7 and the urban migrant underclass

hinas remarkable growth has been associated with

widening rural urban income divide, heavy demands on energy, water, other natural resources and declining savings. his has been attributable to an explosive growth of industrial production leading to modest urban employment growth, averaging over percent per year between declining from 7 percent n 3 and 7 to 4, with the share of agriculture in total employment percent in 6 Kuijs et al, .

3Urban and

ural Incomes per capita (19 8 200 ).

So c : National B

a of Statistic (NBS). ( 008)

Yusuf et.al.(200 ) suggests that the rural-urban income differences reached their historic peak in 2005 and were greater than when reforms began, with real income per capita being 9 percent of real urban income per capita. This trend is supported by the stati stical figures, according to Yue (2010), the ini coefficient soared up to 0. 1 in 2000, surpassing 0. 9 in ini

1999, and kept increasing ever since. It reached its peak at 0. 9 in 200 .The

coefficient is an internationally recognised measure of inequality of income distribution with a low inicoefficient indicat ing a more equal income distribution, while a high indicates spatial income distribution. ini coefficient

There has been gradual increase in inequality of income distribution in China, since adopting market based reforms affecting different demographic profiles and groups . According to en

(200 ), prior to the introduction of market reforms in the early 80s, the richest 10 percent of the populace earned less than 20 percent of DP and yet by 2005, the top 10 percent

earned 5 percent of the income, while the bottom 10 percentearned only 1. percent .

Traditional government policies that treat rural and urban areas differently have resulted in inequalities or gaps in living standards in China, particularly in educationand health . Dollar (200 ) argues that this has been due to the skewed nature of Chinas uniquely decentralised fiscal system which has failed to cope with the surge in economic growth and demand for better services. The rural poo r cannot afford to keep pace with rising costs of basic public services such as rural health and education. Sinclair et. al (200 ) asserts that 25 percent of the differences in the rural -urban gap are attributable to differences in education.

Escalating internal migration trends is another indicator of the impact of globalisation in China. This is a consequence of both the push and pull factors resulting from economic reforms that date from the late 19 0s (Smith et al , 1995). Yusuf et al argues that official statistics indicate that Chinas urban population more than doubled during the reform programme from 1 , 9 percent in 19 8 to 2, and 9 percent in 2005. As a result of Chinas rural reforms, some 0% of the rural labour force, about 200 million rural workers were made redundant resulting in most of these workers migrating to urban centres or coastal towns to take up employment in the emer ging industries ( ielsen et al, 2005).

The growing urban population created an emerging migrant underclass society based on limitations to social insurance access rights. ielsen et al (2005) argues that urban dwellers tended to look down on migrant work ers and often treating them as scapegoats for a wide range of social ills in Chinese cities including congestion, crime, degradation of the environment and housing shortages including the undermining of employment conditions. In other words, migrant worker s became an easy target for exploitation in sweat shops.

Most migrants had no urban registration passes which automatically excluded migrant workers access to social security benefits enjoyed by registered urban workers creating different urban social cla sses. Most significant is the fact that unregistered migrant workers

had limited or no access to subsidised housing, education for their dependents, he right to vote and access to unemployment benefits and training services.

According to latest statistics, actual used increase of 7,

I totalled

S$ 7.

3 billion in I across

hina an ,

% year on year figures. he distribution of

hinas 3 I over the reforms

provinces indicates that the agricultural sector averaged % of the total

era, meaning that rural poverty stagnated and inequalities are widening year on year. he Eastern region is the driving force behind the rapid economic development and hi gh economic growth in hina, while the Western region is the laggard resulting in regional . igure 4 .

income inequality and higher concentration of poverty Heshmati et al, indicates the trend of Figure 4 I net inflows from to

4 showing a sharp risefrom

According to empirical studies by Shu et al

7 , economic globalisation has no intrinsic hinas labour marke t. hinese men are

positive or negative effect on gender inequalities in

more likely to be channelled into the newly emerged jobs in foreign firms and jointventures that offer substantially higher earnings, while hinese women tend to participate more in low

paying jobs in global production factories,fuelling gender rural to urban migration trends. Increased demand for hinas products abroad has had an impact on its domestic

market. he late

s and the start of the year

have witnessed a dramatic revolution

in the information and communications technology. Figure 5

igure

clearly illustrates the sharp G P increase following globalisation in

hina which in

turn has caused a significant impact to its structure of its economy and policies. his has seen the share of hinas total exports produced by wholly foreign -owned firms and Sinoto more than I flow in 6. % by

foreign joint ventures rising steadily over time, from about 3 % in . hinas outbound I accounted for less than % of global

eenstra et al,

he increased foreign direct investmen has caused uneven distribution of investment within t hina impacting on the spatial distribution patterns of incomes.According to Yue to 3 provinces in the east area accounted for provinces in the middle and , % of the total I in hina, whilst % , I in I

provinces in the west accounted for , 4% and 3,

respectively. here has been increased inter-provincial inequality, rural-urban inequality and inter-industrial inequality across the length and breadth of igure 6 depicts per capita income from a gradual income inequality trend up to 7 to hinas fast growing econom y. hinas main regions indicating

within

7 and a distinct income disparity from oastal

onwards during the time the global impact was peaking. his also indicatesthat regions received the bulk of I funding with minimal funding on Inland regions.

Figure : Regional Income Inequality in China: 1970 - 00

M / er Capita
000

0000

2 000 20000

0000 000

Source: National Bureau of Statistic (NBS). ( 003)

The accelerated industrial growth in China has had an impact on the environment and land use patterns. en (200 ) argues that China was responsible for 0% of the increase of

worlds energy consumption between 2000 and 200 , resulting in climate models predicting less rainfall in northern China. This climate change results in a % reduction in Chinas

main crop yields and significant water shortages which is closely linked to income inequalities and poverty in rural communities. Sun et.al (200 ) argues that the entry of China into orld T rade Organisation ( TO) also forced the removal of subsidies on domestic

agriculture and exports. The resulting uncompetitive domestic prices turned China into a net importer of agricultural products leading to land abandonment and corresponding disparity in earnings and migration patterns.

The diversification within the economy gave birth to the proliferation of Sweat shops to accommodate the needs of displaced peasant workers due to the adverse effects of the rural reforms. These sweatshops thrived on a buse of migrant workers failing to cope with advantages offered to M Cs as preconditions for FDI. This impacted adversely on women and children who were now used in the wars to drive down wages and product prices, a real concern in global markets due to un realistically cheap prices on chinas products.

Coast

ear Inland

atoinal

  

0000 000

000

2000

2002

lobalisation caused disparities resulting from educational and cultural colonisation in China. en (200 ) argues that globalisation increased the divide in education between rural and urban inhabitants. The Cultural evolution transformed China to open do or education policy distinct from the prior system biased against rural way of life. en (200 ) suggests that a

popular educational model was developed which is more responsive to rural needs and culture, thus enriching and transforming chinas rural cu lture. The

In conclusion, globalisation has had both p ositive and negative impacts o n different groups in China. lobalisation resulted in a sharp increase in FDI causing unprecedented industrial

growth and an upsurge in the levels of Chinas imports and exports. There has been a sharp increase in income inequalities with a widening gap between the ric h and poor in urban areas and disparities in living standards including access to basic social services b etween different groups in urban areas andbetween different groups in urban areas and rural areas . lobalisation triggered rural to urban migration trends linked to FDI patterns . FDI facilitated the growth of M C which fuelled the proliferation of Sweatshops and the associated abuse of migrant labourand t he disparities in the living standards of different groups in urban dwellings.

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