With China being a major economy in the world, they are usually only influenced by another major economy which now is the USA.
ECONOMIC DEVELOPMENT
While economic growth has resulted in improvements in the general quality of life in China, these gains have not been shared equally within the economy.
According to the Human Development Index China is ranked in the middle Human Development with a GDP per capita of $US 4580.
This shows that over the past two decades or so that the Human Development Index has increased by more than a third in the past twenty-three years as shown below. The current situation in China now only sees 16.6 % of the population in absolute poverty.
- 1980 HDI = 0.554
- 1990 HDI = 0.625
- 2005 HDI= 0.745 [ranked 94th currently]
These inequalities that exist in China are divided into certain sections in which you would find that especially qualities of life differ to these factors of rural/urban areas, east/west provinces and whether you are a male or female.
Examples of this are seen in these statistics provided by “The Corporate Classroom”.
- Urban incomes are an average of $US828: up 8.5% from 2002.
- Rural incomes $US211: up 5.7% from 2002.
- These growing income gaps between the rich and poor causing economic and social imbalance.
Positive factors that have occurred with the help of globalization is due to the rise in the HDI level and the statistics that contribute to the factors used in determining the HDI are as follows:
- Life expectancy at birth improved from 63.2 in 1970 to 71 in 2005.
- Infant mortality rate decreased from 35 in 1997 to 32 in 2003 [per 1000 live births]
- Adult literacy [% aged 15+] from 78.3 in 1990 to 90.9 in 2005.
Although you can argue that the income inequality rising is a negative effect, you cannot dispute the fact that even though this occurs, the rise in income for everyone is a major positive effect with the astounding amount of Chinese people coming out of absolute poverty and even with the HDI index rising. China is in a rapid transition from the once third world nation into one that is almost first class.
In 1997, savings deposits of urban and rural residents reached US$560 billion, over 218 times that of 1978 with an average annual increase rate of 32.8 %. Plus foreign currency savings, debentures and stocks, the amount of financial assets owned by rural and urban residents had exceeded US$725 billion.
The pattern of consumption underwent positive changes- the Engel Coefficient of both urban and rural population lowered by 11 and 12.6 percentage points. In conclusion of the economic development I would have to say that China has experienced positives from
Globalization, even though I have en-taken that they now have a higher Gini index, but the fact is that it has increased peoples living conditions, HDI levels and income to the poorer people.
UNEMPLOYMENT
The increased exposure to the global economy has resulted in millions of jobs being cut from state owned enterprises. The statistic shows that in 2001, 5.15 million workers were retrenched from state owned enterprises; it was mainly due to that the restructuring in many inefficient industries.
Although China used to have really good employment in the past, today the unemployment is increasing as in 1997 the unemployment rate was 3.1% and in 2003 the unemployment rate had risen to 7.8%. This is not a very good sign to the government and some reorganizing needs to be made by the communist party for the China's welfare and the budget because by the end of 2003 almost 3.13 million people were receiving unemployment benefits.
TRADE
Prior to 1978, China's trade was conducted under a strict system of state trading where approximately a dozen foreign trade corporations monopolized all foreign trade. Under the central planning regime, imports were minimized and exports authorized only to the extent needed to pay for imports. Over the last twenty years, the system has changed dramatically and China's trade has expanded enormously. Its share of world trade has risen from 1% to 3% over the last quarter century and the World Bank projects that it will triple again by 2020, making it the world's second largest trader.
According to the statistics made in 2003 by “The corporate Classroom 2004” China is currently the 10th largest trading nation. 2004 forecasts may increase this ranking to 4th.
The accession into the WTO since the 17th of September 2001 encourages trade liberalization and opened more accessible markets to China. The total net volume of trade in 2003 increased by 7.5% on the previous year.
In 2003 China's exports were up by 32.3%
