Let us start by defining the difference between policies and standards. After which we will delve a little deeper into the world of policies. Then we will look at how to develop your very own policies.

Standards

Standards tend to originate from without. In many instances organization's can adopt various standards voluntarily. External factors such as the need to comply with legislation or industry-wide recommendations may force an organization to adopt specific standards.

Standards infer compliance or opt-in. The degree of compliance tends to be rigid in areas where legislative regulations are enforced. In this case, failure to comply will ultimately result in the imposition of punitive penalties. Depending upon the breach incarceration may result.

Policies

Policies on the other hand originate from within an organization. The primary objective of policies is to deliver positive benefit or avoiding negative effect from the organization's perspective.

Compliance with corporate policy is generally not negotiable and the individual at fault will generally experience some form of penalty. This will vary from one organization to the next. The ultimate penalty for non-compliance with organizational policies would be termination of employment.

A policy is a deliberate plan of action (organizational intent) to guide decisions and achieve rational outcome(s). As such the term may apply to government, private sector organizations and groups, as wells as to individuals.

Policy also refers to the process of making important organizational, management, financial and administrative decisions. This includes the identification of different viable alternatives such as programs or spending priorities. This forms the basic pool of options from which the final selection will come. It is often the case that company policy will dictate which option wins.

Selection Criteria

Company policy influences the decision making process by defining the criteria for selection. Choosing from among a range of nearly equal prospects is one area where policy has considerable impact. Generally, company policy is to ensure the rapid attainment of specifically defined explicit goals.

Risk/Threat Impact Identification

Identification of real and potential risks and threats takes place. Each risk and threat is analyzed in regards to the impact that it would have upon the organization. Now conduct an impact evaluation.

Implement measures designed to avoid those specific negative effects or impacts identified as posing to high a degree of risk, threat or impact to the organization.

Maximize Positive Benefits

Policies may also be designed to address and maximize the organization's capacity to exploit the positive benefits (from the organization's perspective) of a given scenario or situation as identified by that organization.

Policy Examples

Examples of policies widely used today include corporate privacy policies and distribution policies regulating the distribution and sharing of resources within the organization are another.

Policy Development and Management

Without doubt the easiest way to create, develop, and maintain a consistent appropriate policy or set of policies across an organization's expanse is to apply structure and form to your organizational and personal policy objectives.

Since policy needs to respond to an ever-changing environment and/or environmental factors it is best; as is the case with other intangibles, to adopt a life-cycle managerial approach. One example of the life-cycle approach to policy management is the Bridgman/Davis policy life cycle.

The Bridgman/Davis Policy Life: Cycle1

1. Issue Identification
2. Policy Analysis
3. Policy Instrument Development
4. Consultation (which permeates the entire process)
5. Coordination
6. Decision
7. Implementation
8. Evaluation

Policy Documentation

Policy documents usually contain the following standard components:

• Policy Purpose Statement - Why the policy is being implemented & what it is supposed to achieve
• Policy Scope Statement - Who and what the policy affects. Express exclusions relating to specific individuals, organisations and/or actions
• Policy Time Statement - When the policy takes effect and when it is due to be terminated
• Policy Responsibilities and Obligations - Who is responsible for what including identification of governance structures
• Policy Statements - The specific organizational regulations, requirements, modifications and/or behaviors that the policy is creating
• Background Statement - The reasoning, motivation, and historical perspective for policy creation
• Statement of Definitions and Terminology - Clear and unambiguous definition and explanation of the terminology, concepts, methodologies and processes contained within the policy

Help, Here Come the Computers

Most people worried about that but generally their worries would be closer to home. Family, home and jobs were what people worried most about - just like now really! A major worry was jobs and the increasing use in the workplace of a recent interloper - the computer!

Let's face it. Computers and robots do not get tired. They do not need sleep. They do not get bored when they do the same thing over and over again. They don't even go on strike!

In the manufacturing industries, for examples, the production of motor vehicles was becoming mechanized. Robots took over from people in the putting together of cars. Since 1980 the amount of jobs in manufacturing in the UK has halved. A lot of people lost a lot of jobs.

Administrators and secretaries found that they were no longer in such demand because their managers would acquire the skills that had traditionally done by them. The age of “Take a letter, Miss Jones” came to an end in that decade. A lot of people lost a lot of jobs.

In publishing, the old fashioned way of producing pages of a newspaper or magazine - typesetting - which took a long time to learn - were beginning to be phased out. New software packages such as PageMaker and Quark were making traditional methods look old fashioned, time consuming and expensive. A lot of people lost a lot of jobs.

Essentially, as long as machinery (sometimes called robots) and computers cost less than employing a large number of skilled workers then businesses will make every effort to replace them with machines. Are we doomed, like George Jetson in the old cartoon series set in a possible future, The Jetsons, to sit at a disk and push one button again and again all day long?

The Humans Fight Back

As we know now, the revolution in personal computers and robotics in the 1980s was not the end of the world. However, what the work force in general discovered was that as computers evolved then they had to learn to adapt to this continual change.

A lot of people, it is true, discovered that heir skills, gained over a long period of time, were now redundant. In other words, they - and their skills - were not needed anymore. Some people never worked again. However, most people in this situation moved on and discovered new skills which could make them a living. Between 1997 and 2002 alone the amount of jobs in the UK in the technology industry doubled!

Technology has not destroyed jobs and then stood still. After all, it is human needs that push technology - and we all need to work at some point in our lives! ICT created new markets (online shopping is just one example). The whole process is called “creative destruction” by economists. In other words, when something is destroyed then something else comes along to replace it. For almost three decades that is the way the major economies of the world have operated.

ICT, then, does not really destroy jobs. It moves them around. Databases did not completely replace filing; plenty of people still do that. People still have to deliver the post. However, these things are now done in conjunction with technology, not independent of it.

What ICT does mean, though, is that any skills you have today may not be need tomorrow. This of course upsets people, but what they must do is get over it. So, you go on a course to learn something and then find in two years that it has been replaced by something else - then learn that something else!

The focus of an individual's working life in the 21st century must be on training and then, sorry, retraining! Employers too, must understand this and so many progressive organizations now have much more active training programmes than they ever had as they have realized its importance. Of course, the greatest responsibility is on the individual.

Remember the dinosaurs? Their remains were only discovered because people developed new tools to discover them. Use your new tools to see what you can discover - or even become!

NEXT:  Capacity – Increasing Levels of Achievement

The Teacher/Trainer

Chalk and Talk! That is how people used to refer to teaching. The teacher would have a blackboard, some chalk and a board duster. They would then "talk" through what was to be learned - making notes on the blackboard as they progressed through the class. The students would be expected to make notes: after all, once the teacher had used the board duster, then the lesson would effectively be gone forever. The blackboard was replaced by the whiteboard and instead of chalk then pens would be used. However, the theory was still the same.

In the early nineties the concept of the SMART board was introduced to class rooms. This is a screen that is controlled by touch and it works with a computer and a projector. What is input in to the computer can be projected on to the screen and the teacher - or students for that matter - can write on the board with digital pens. The board can also be used to present information using such software as Microsoft PowerPoint.

Many education and training centres also employ what is known as a VLE - a Virtual Learning Environment. This is a tool to manage course rather than teaching itself and is becoming essential for teachers to understand as it makes the administration of a course much easier. The system can show how students are doing and can be tied in with reports that detail their attendance and punctuality. They are often used to help with "distance" learning where the educator and student are separated geographically buy they are increasingly used to supplement one-on-one and group teaching within the classroom.

As the complexity of these systems increases more tools are becoming available for teacher and student alike. Examples include interactive quizzes, discussion boards and chat rooms and wiki spaces which mimic websites such as Facebook.

One advantage of using an electronic system such as a VLE is that classes can retain a permanent reminder. Notes about classes can be posted up on the system and those students who need to revise more or perhaps missed the original class can read and review the information. The information can also be shared around other teaching professionals so that a bank of materials can be created. So, one teacher can create an excellent idea for a class and share it with many others.

Most teachers are not "digital natives" to begin with! In other words, many of them are old enough to have started teaching before ICT had made any impact on education or the classroom. So, many have had to upgrade their skills in order to move with the times and for a huge amount this has meant the acquisition of completely new ICT skills.

However, technology will never replace good teaching as the primary best way to learn!

The Architect

The late eighties saw the introduction of CAD or Computer Aided Design in to the field of Architecture. It was adopted first by technical drafting staff and a short while later by the architects themselves. Previously, designers and architects would work at a draughtboard with hardware. In other words, pencils, rulers, erasers, sharpeners - the tools of the trade! If a major mistake was made with the design of a building it would be very costly to go back and put it right: often it meant starting a design again by scratch.

CAD meant that the architect not only had to be a good architect but had to acquire additional skills. ICT skills are now essential and the architect or designer must be able to communicate their designs using a mouse or another input device such as a digitizer.

The Librarian or Archivist

Libraries used to be about books, books and more books! That is still true, but to a lesser extent. If you go to a library these days you will come across a lot of computers that can be used for a variety of things. Of course, the librarians must now be able to use ICT in order to help the people who wish to use the library.

When someone wanted to borrow a book, what would happen in the past is that the book would be stamped and a note made in the lender's record by hand that they had loaned a book from the library. Now, all of that is usually automated which means that librarians must be able to use that system and so, necessarily, be ICT literate.

Requests and searches for certain books can be done online as well, so that a series of libraries run by an authority does not need to have multiple copies of rarely read books in all of their outlets. Instead, when one is requested it can be ordered online and be sent to the outlet closest to the person who wishes to borrow it. Again, the librarians must have the associated computing skills needed to do this.

The Manager

Twenty or thirty years ago managers would have a lot more staff around to help them out than they do now. A manager would normally have a secretary who would help him or her out with such things as letter writing, filing and general administrative duties that were traditionally time consuming and would not be requisite with a manager's salary.

With the introduction of ICT, tasks could be completed far quicker than in previous years and the need for a lot of support staff lessened. Now, managers are generally expected to compose and write (and send!) their own letters, memos and emails.

Many companies would traditionally train secretaries so that they would know the standards of communications used within the organizations. This would include how letters and reports were to be laid out and the kind of language to be used. Many companies now have documents that describe these systems so that any individual worker can acquire this knowledge and use it. This is often known as an "in house" style.

Managers must generally be much more ICT literate and aware than even ten years ago. Skills that may have been taught to a typist or secretary would now be expected of a manager as well.

NEXT: Complexity - More jobs

Why? It is because ICT demands that people have a broader level of intellectual skills than ever before. The reasons for that are historical as well as financial. Let's take a little trip back in time and look at how a few jobs have changed because of the incorporation of ICT.

The Office Administrator

Twenty to thirty years ago, before the advent of computers in the office environment (or, to put it better, their takeover of the office environment) keyboard skills were possibly even more important than they are today. People used this old gadget called a typewriter. You may have seen them in museums!

A typewriter was a device with a set of keys that when pressed allowed us to print characters directly on to paper. No screen! No spell check! They were indispensable in offices and until the 1980s no office would be without one. The introduction of ICT, in terms of Personal Computers with word processing software largely replaced the tasks which the typewriter had been used for.

But the personal computer also introduced a higher level of complexity. With a typewriter you could usually embolden words - that's where our IT term “bold” comes from. Some typewriters could even underline and italicize text. Fonts could be changed on some typewriters but this was time consuming.

That was pretty much it. With the personal computer people could suddenly change the font on a whim. They could change the size of the text, change the colour of the text, use a spell checker, introduce graphics in to their documents - the list goes on. Then came mail merge where a single letter could be sent out to hundreds or thousands of individuals with ease.

Then there is filing. We still have filing cabinets, but not the rows and rows and rows that had to be used when everything was done on paper. Computerized databases meant that things could be much more efficiently filed. Plus when an employee wished to something, for example, list everything filed in alphabetical order, or an alternative order, this could be done with a few clicks of a mouse. Information could be retrieved from a database in any number of formats and more complex questions could be asked of data than had previously been possible.

Let's not forget the internet. It is sometimes referred to as the largest free library in the work and that has meant that there has been a revolution in the way in which research is conducted. Previously many organizations would employ people specifically to research information that the company needed and these involved very high skills. But let's face it - anyone can Google anything! That's right, isn't it?

Of course, it's not all a bed of roses for the office worker. With the new technology came the demand for new skills - including a greater ability to think for oneself and solve problems independently. Plus, in the past only secretaries and typists would be expected to have keyboard skills. Now, anyone who works in an office needs them, like it or not! With the internet, all that information is at our fingertips. However, as any student will tell you, there is a skill involved in getting the right results from a search engine!

So, a historical set of skills has been replaced by others for office workers. Most would agree though, that because of ICT the expectations of employers about what their employees can and should be able to do (and the time in which they should be able to do it!) is much higher than any time in history.

NEXT: Complexity - More jobs

Technology is all about change. Lots of change! These changes tend to enable us to do more things with this technology as the interfaces between the user and the technology becomes more and more user friendly. What is adds up to is an increase in complexity.

It's a hard word to get to grips with, complexity. One thing that many people do not seem to do anymore is use a dictionary. Let's go against this trend and have a look what the dictionaries have to say about the word.

Ouch! Most dictionaries will say something like “the quality or state of being complex”. Fantastic! A great help! Not!

So what is meant by the word complexity in relation to ICT? It could mean difficult but that is not really the point in terms of computers. Certainly, the knowledge of ICT we must have these days is more involved and intricate then ever before and that is where we are getting close to what is meant by the word.

Cast your mind back ten years. If you are a teenager right now, then ask an older person to do so! Can you remember getting your first mobile phone? It was hard to figure out at first, am I right? As for the manual that came with it, it would have made as much sense if it had been written in Martian! Now, think of the ease with which you use your mobile now, the speed at which you can text, the times you use it to connect with the internet, the games you play on it, the Bluetooth technology you use with it, the videos and tunes you download via your mobile.

Now imagine your past self ten years ago. If you had been asked if you could use or even would use all these complicated features, would your answer automatically have been a yes?

What you have done is adapted, over time, to the shift in mobile technology from being a simple tool with which to talk to others, to a multifaceted tool that you can use for all sorts of things.

So, my first message is this. Do not be freaked out by the complexity of ICT. You will adapt! Change happens, things get more complex, but it is something that you should embrace, not run away from.

WHAT THINGS BECOME

Life, eh? Complicated, difficult and often confusing. Most people would agree that out lives have become more complex and this is partly down to technology and the pace of change going on all around us. As we get older, too, we do not respond as well to change as when we were young. Can you remember seeing older people on the phone to a family member in another country and shouting rather than talking? They thought that it would enable the other person to hear them better if they shouted because they were so far away. How we chuckled! What we must try to avoid is loosing our ability to adapt. Change is going to happen however we resist it. Plus, the sheer scale of change over the last 50 years has been enormous. The way that organization work and operate has changed enormously. What organizations produce has also changed with a shift, in the UK at least, from manufacture to service (or even information) economies. How people work has changed, too.

Today, over 300,000 people make a living trading on eBay. Use a time machine and go back twenty years. Ask someone what eBay is. You would get a blank look!

So, change happens and it get more and more complex. You will be expected to adapt to these changes. If you work for an organization for a long time - say twenty years - your experience will be much greater than an employee who has just finished university or college. However, when new technology is introduced, long servers can often get confused by the changes and are quite often regarded by the younger workers as "dinosaurs". It is more important than ever to welcome change, work with it and adapt to it.

ICT could be your downfall. Make sure it's your saviour!

NEXT: The skills you need to use new technology

Capacity

Private organizations usually have a single aim - to make money, otherwise known as a profit! This usually leads to an effort to increase their capacity. This is a combination of increasing the amount of work an individual does to the end game of increasing the level of production. More and more organizations have become reliant on using ICT to achieve this end.

Trends

We will look at recent trends in the use of ICT - to try and make sense of what change is happening in the work place because of ICT and to see how these trends could go in the future. A good k knowledge of recent trends enables organizations to better prepare for the future and this feeds down to the employees. If you know what is going on you can anticipate what might happen in the future. This makes you more employable.

The Working Environment

How has ICT changed the working environment? In one word, enormously! From the layout of the offices in which we work, the location of our work places and opportunities such as working from home the introduction of ICT in to the work place has had a huge impact on the way work is done. We will look at these changes and consider aspects of these changes that may be cause for concern! We will then address how to limit any negative aspects that may have come about because of ICT in the working environment.

Some facts to ponder:

What does the future hold?

• By 2010 the top 10 “In demand” jobs did not exist in 2003
• Most students at College at the moment are preparing for jobs that do not yet exist
• They will be using technologies throughout their working lives that have yet to be invented!
• They will be solving problems that we do not even know exist at the moment!
• In September 2006 there were 106 million registered users of Myspace
• If that was a country it would be the 11th largest in the world
• There are almost 3 billion Google searches every month (who did we ask before?)

Over the years it has become one of the fastest growing economies in the world. Promotion of economic growth and development.

The Indian government is highly focused on bringing changes to the economy and promotes high economic growth. Realizing the potential of the world market and foreign investors the government has set up numerous policies, which promote investment and provide incentives for foreign and local investors.

The Fiscal budget for the year 2001/02 was released around mid February; this brought in new policies and changes including:

There are tax exemptions for 15 years for units in infrastructure and the core sectors (not specified).

This tax exemption will attract more investors to invest their funds in infrastructure and core sectors, promoting economic growth and benefiting many other businesses and consumers through flow on effects of improved infrastructure. There will also be high employment (of skilled and unskilled labor) and better living standards, which contributes to economic development.

Venture capital made simpler. This will allow small businesses to get started quicker and easier,and "made simpler- is likely to suggest the cut down of red tape to allow easy access into the market. This contributes to economic growth and creates employment and greater competition and consumer choice (as a result of increasing number of businesses). It will also attract higher direct foreign investment, which is a great benefit for the nation especially at trouble periods.

Long term capital gains tax capped at 10% for all. This would mean more people would invest in shares, which encourages businesses to expand and employment would increase. The value of the businesses will also increase because shareholders are likely to prefer capital gains overtime rather than instant returns (dividends). The businesses can now invest the profits to increase its value. This will of course contribute to the economy.

IT is given special status. The reason for this is because the Indian government wants to promote it-s nation a as a technological advanced nation and in order to do this they must stimulate the IT sector. The "special status- means the sector and investors (willing to invest in the sector) will receive many benefits and incentives from the government to do so.

Tax-free status for bonds targeted at housing development activities. This will not only lead to higher investment in property development, it will also lead to overall economic development because housing development activities include housing middle to lower class people, by providing them a better environment to live in the standards of living are dramatically improving.

10% surcharge on income tax. This may seem a peculiar decision but the government is trying to increase it-s tax base, which it can then distribute back to the public through infrastructure development, educational programs and housing developments.

There has also been tariff deductions to attract foreign investment and competition. This will have the effect of improving the competitive nature of import competing industries, and an over all growth in efficiency and output.

Promoting the economy to foreign investors:

Foreign investment policies

Majority foreign equity allowed in several sectors … allowing for easier access for overseas investors to own and manage businesses in India.

Foreign investment of up to 51% in 35 high priority areas is eligible for automatic approval, provided by the RBI. These incentives allow foreigners to invest and therefore provide an inflow of funds into the nation, promoting economic growth and development.

Goods of foreign brand names and trademarks for sale are allowed. This shows that the Indian government has realized the needs for it to become a globally integrated nation.

Foreign companies are permitted to open branches in India - businesses that set up in India will make good use of the resources available, this includes employment and use of local materials. This will boost economic growth and development as funds are injected into the economy.

Local industry incentives

The Indian government has created many incentives for domestic investors. Ensuring that the incentives comply with the economic philosophy of the government.

Tax-free status for the first five years for power projects, businesses involved in exports, units in free trade zones, infrastructure development and new industries.

Tax deductions of up to 100 per cent on export profits.

New industrial undertakings will receive a 30 per cent tax deduction on net income.

Further Economic Development the Indian government has taken greater concern in the welfare of its people. It has set up Second National Commission on labor to protect millions of workers. Ensuring they are not exploited through low wages, unreasonable expectations# etc. This has the effect of improving wage levels, and living standards among the people.

The government also uses a proportion of its expenditure on education, health, water supply, sanitation, housing, slum development, social welfare, nutrient, rural employment# etc. This ensures the people living below the poverty line (over 30% of the urban population) will receive enough benefits for them to enjoy a reasonable living standard and the future generation is given many incentives to shift away from the poverty stricken areas to become financially stable.

The government has also ensured increased availability of health care which has lead to an improvement in the living standards (improved death rate, birth rate...etc).

Example: Infant mortality rate has improved from 129/1000 in 1971 to 80 in 1994.

Impact of Globalization

The significant decline in the GDP of a number of East Asian countries, continuing recession in Japan, lack of capital growth in developing countries, unsustainable fiscal weakness in South American countries and volatility of capital and Foreign exchange markets in developed nations were a number of causes in world economic down turn in the year of 1998-99. All these factors had major impacts on India, hence the name the impacts of Globalization on India. These impacts include:

Inflation rose sharply during 1998-99. It reached a height of 8.8 per cent in September 98 it dropped steeply in January 1999. This rise in inflation was caused by numerous problems; one of them was the dramatic increase in some agricultural commodities.

Deceleration in the growth of India-s exports continued, as growth was negative for the first 9 months of 1998.

??The current account deficit fell from 1.6per cent of the GDP in 1997-98 to 1.4 per cent of the GDP in 1998-99.

There has also been a deceleration in private inflows, which lead to a lower than expected net capital inflows between 1998-99.

Manufacturing growth as a part of the GDP fell to 7.7 per cent in 1996-97 from the previous year-s level of 15 per cent. And it fell slightly to 6.8 per cent in 1997-98.

The above impacts show how closely integrated India with the global economy, many production decisions and government policies must comply with the global market situation in order for India to continue as a fast growing economy.

Positive effects of Globalization

Prior to The 80s when the Indian government undertook major reforms to relax restrictions on foreign trade and investment it suffer from a very low GNP growth rate of below 3.5%, but as a result of opening up to the global market GNP growth is averaged at 5-6% per year.

Indian Businesses are able to find new markets overseas to sell their products to, they will have the advantage of cheap resources such as labor.

Entrepreneurs from foreign nations are also able to make efficient use of these resources when they set up business in India. This of course leading to greater employment levels, greater output and overall economic development and growth.

Average real wages of unskilled labour has increased, which will lead to an increase in the standard of living.

There have been signs of improvements in living standards in the general population a s a result of economic growth and globalization. Poverty ratio has declined dramatically from 56.4% of the rural population in 1973-74 to 37.3% in 1994. The urban poverty ratio has also fallen significantly form 49% in 73-74 to 32.4 in 1993-94. These are all results of job creation and developments undertaken by the government and private institutions.

Due to the reduction in barrier import competing businesses have become more competitive leading to greater efficiency and better-priced and quality goods.

Due to Globalization developing nations such as India become more 'modernized- as new technology and industries can quickly be adopted.

Due to Globalization exports have risen dramatically leading to economic growth.

An indirect result of Globalization is the improvement in infrastructure.

Additional employment opportunities of 29.74 million jobs were created between Jan 94 to March 97.

Negative effects of Globalization

Globalization has lead to environmental damage in India (as with many developing nations).Due to large-scale industrialization urban slums have formed, air and water pollution has dramatically increased. Multinational firms have exploited resources belonging to the country and lead to land degradation. Delhi for example is the 4Th most polluted city in the world.

Though foreign investment will promote economic development in the short term, the profits earned from the business venture move out of the country. There is also a possibility that at times of recession investors (in portfolio investment) may withdraw their funds causing further problems.

Domestic resources such as labor maybe exploited my large production based firms. These firms may also abuse natural resources and use them inefficiently.

Domestic producer being overpowered my overseas giants, who already have competitive advantages over the domestic producers, and have more funds to invest. This will lead to the closure of many domestic owner firms.

Statistics

These statistics reflect the impact of the Asian financial crises on India, and it-s overall performance between 1996-98.

Gross domestic product for example has fallen due to low aggregate demand, while Gross Domestic Investment has increased due to higher incentive to invest surplus funds.

1997, 1998, 1999

• GDP Growth (%) 8 6.1 6.2
• Exports (as % of GDP) 10.9 11 10.7
• Imports (as % of GDP) 14.1 13.8 14.2
• Gross Domestic Investment (% of GDP) 25.6 23.6 29
• Savings and investment 1996 - 97 1997 - 98
• Gross domestic savings 24.4 23.1
• Gross domestic investment 25.7 24.8
• The slump in savings and investment is once again due to the impacts of the Asian financial crises.

Sectors real growth rates 1997-98, 1998-99

• Agriculture -1.0 5.3
• Industry 5.9 4.7
• Manufacturing construction 6.8 5.7
• Mining 4.1 2
• Services 8.2 6.7
• Agriculture continues to be a major growth point as it is a major part of exports.

Inflation 2000, 2001, JAN

• 3.6% 8.2%

China is located in the continent of Asia with the highest population in the world of 1.3 billion people. They are the fastest growing economy due mainly to foreign direct investment in which occur because of cheap labor rates and manufacturing costs. With the tremendous progress in the last decade China has reduced poverty dramatically thanks to an economic system increasingly open to trade and foreign investment.

Their political system is run by the communist party in which according to the corruption index rated from 0-10 with 0 being absolute corruption in the political system. China ranks 71 out of 145 nations with the index at 3.4. Although China is a communist country they are taking a very western approach to how they are run with trying to become a much bigger player in globalization and using strategies in order to promote economic growth and development.

On the 17th of September 2001 China was admitted membership into the World Trade Organization after 15 years of lobbying for the position. They were then able and were participants of the Doha round on the 10th of November 2001. “International economic cooperation has brought about this defining moment in the history of multilateral trading system,” said Mike Moore, WTO Director-General, at the conclusion of the meeting of the Working Party on China's Accession.

Under the chairmanship of Ambassador Pierre-Louis Girard of Switzerland, the Working Party agreed to forward some 900 pages of legal text for formal acceptance by the 142 member governments of the WTO.

As a result of these negotiations China has agreed to undertake a series of important commitments and rules it must follow by, some of these include:

China will provide non-discriminatory treatment to all WTO members. All foreign individuals and enterprises, including those not invested or registered in China, will be accorded treatment no less favorable than that accorded to enterprises in China with respect to the right to trade.

Price controls will not be used for purposes of affording protection to domestic industries or service providers.

The WTO will be implemented by China in an effective and uniform manner by revising its existing domestic laws and enacting new legislation fully in compliance with the WTO agreement.

China will not maintain or introduce any export subsidies on agricultural products.

“Now this economy will be subjected to the rules-based system of the WTO, something which is bound to enhance global economic cooperation “, said Mr. Moore.

As a result of this negotiation, China has agreed to undertake a series of important commitments to open and liberalize its regime in order to better integrate in the world economy and offer a more predictable environment for trade and foreign investment in accordance with WTO rules. This more stable environment with hopefully then lead to a decrease the level of corruption in the political system which will lift its index and ranking as so then will become more attractive for foreign investors, to China's benefit and to the traders.

ECONOMIC GROWTH

The 2003 statistic provided by the Market Economy textbook displays China Producing their Gross National Income of $1417 [US Billion] with a ranking of sixth.

This indicates that a lot of output comes out of China, but one must encounter the population when calculating the real output of a nation and which China has a GNI per capita of only $US4980 with a rank of 119.

Between 1965 and 1979 the gross domestic product grew at a rate of 6.4 per cent a year, and between 1980 and 1988 the increase was 10.3 per cent annually. The growth rate dipped below 4 per cent in 1989, but returned to well above 10 per cent annually in the early and mid-1990s.

The 2005 growth rate started at strong at 9.5% and flattened out to average to 9.4% for the 2005 year. Since 2002 the Industrial production has increased by 15% along with the Consumer demand, which increased by 10.1%.

With reference with the agriculture sector as a % of GDP, has decreased from 29% in 1997 to just 13% in 2003, this is a result of more industrialization, more infrastructure and investments into China, and so some farms have been converted into cities and factories. Another factor due to the decrease into agriculture is the fact that this is a percentage of the GDP and expresses the fact that all other industries are producing a lot more and growing more than the agriculture industry itself.

Much of the growth as stated before is attributed to the Foreign Direct Investment increase, this is a very attractive market for western expansion. This is the result of a more market-based economy with globalization and deregulation by the Chinese government. These recent trends of growth that averages 9.4% growth rate over the past decade is 1.7 % higher than the Asia region which stands at an average growth rate of 7.7%, while the average growth rate of the rest of the world is at approximately 2.65%.

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%

Imports were up 40.5%

Tourism is an increasing industry, which is up 9.7%

In the last decade globalization and the entry into the WTO has made China a more attractive country to invest and travel to, along with this and also their quick response to the rest of the worlds interest in China they have managed to turn around in less than ten years a CAD into a CAS.

These trade flows are very positive in relation to China with the second biggest trading nation in the world.

DISTRIBUTION OF INCOME

A main indicator to measure the income inequality is to use the Gini coefficient method as in 1990 the level was as 0.25 and then calculated in 2005 the level has risen to a level of 0.447. This is the comparison to Australia's Gini co-efficient index that now stands at the rate of 0.294 [2003-2004]. This increasing gap of income inequality is becoming more one of the extremes-causing economic and social imbalances.

FOREIGN DIRECT INVESTMENTS AND TRANSNATIONAL CORPORATIONS

FDI and TNC's have increased rapidly since globalization and the opening of markets and deregulation by the Chinese economy. The FDI has increased by 19% since 2002. Some statistics and developments concerning the development in TNCs and FDI include:

In 2003 some 34 000 new FDI projects and enterprises were approves.

FDI and TNCs encouraged in modern agriculture, in high tech industries, infrastructure and construction.

Focus is on the development of the western regions, and the re-engineering of State Owned Enterprises.

Foreign investment capital became a major factor in growth, with US$30 million of investment in 1994. This rapid growth has caused some problems, such as high inflation rates in urban areas and increasing economic inequalities between regions and social groups.

ENVIRONMENTAL ISSUES

There is concern that China may pursue unsustainable practices in an attempt to maximize opportunities of globalization. China perhaps has become too absorbed in becoming the fastest growing economy with such high growth, development, and HDI levels that environmental issues are not seen as being so important and the issue is just being ignored.

The air pollution in South East Asia is a particular problem with almost five times more pollution in the air than some parts of Sydney's pollution. These environmental problems occur due to the increasing industrial production contributing to poor environmental quality and increasingly frequent blackouts. With their increased use of oil used in production of such industries the rest of the world can feel the impact on the increase on a barrel of oil due to the demand created by China's increased consumption.

STRATEGIES USED TO PROMOTE GROWTH AND DEVELOPMENT:

OPEN TO THE WORLD POLICY

In general China has adopted a more open policy that is in keeping with the WTO stance on trade liberalization. China continues to actively seek FDI and develop links with the international economy.

FDI AND TRADE POLICY

• Sustained economic growth rests with continued investment and trade.
• China actively seeks FDI and will continue to do so.
• Removal of some 120 regulations that limit private capital inflow
• China's export base is being broadened.
• Businesses are being encouraged to invest and compete for foreign contracts
• Key equipment and technologies are being imported to develop domestic industries.
• The liberalization had a fairly significant impact with the removal of government controls over prices, reduction of trade protection and also with the liberalization of investment and financial flows.

MICROECONOMIC REFORM

• China is committed to the reduction of administrative intervention
• The financial system is being reformed and to some extent deregulated.
• Consumer credit developing.
• Continued reform of SOE's.

FISCAL POLICY

• Much of the government expenditure is directed towards infrastructure economic redevelopment and job creation.
• Spending on education and health is increasing.
• State is committed to an active role in stimulated the economy through fiscal policy.
• In 2005 the fiscal revenue soared 18.2 % or more than 50 billion US$ for the first 10 months.

WELFARE POLICIES

The immature welfare system must be developed to address rising unemployment. Income protection insurance schemes being proposed for rural areas.

Job creation is important to addressing welfare problems of the economically disadvantages regions. As stated before, China is paying out welfare payments to over 1.3 million unemployment benefits. Will careful and accurate restructuring of the Chinese economy not so much payouts would be required thus a high budget to spend on other things.

The current position that China is in [as quoted by the “Gittins on Saturday” article by Ross Gittens in the Sydney Morning Herald, weekend edition on the 3rd of December 2005.] is a transition from industrial to knowledge-based development. “Since 1949, rural China has for the most part broken free from economic isolation thanks to investments in basic infrastructure, development of a road system, basic disease control, lower fertility rates, increasing literacy and so on.” He also mentions how China has moved to a more market based economy due to the globalization and China being more opened up to the world market.

Deflation Looms: These extracts come from William Pesek Jr.

Officials in Beijing have used administrative measures to reduce over investment. Doing it slowly to achieve a soft landing means capacity growth remains high, causing an oversupply even when China's annual growth of more than 9 per cent slows.

Cutting the interest rates may even worsen deflationary pressure by encouraging capacity growth regardless of corporate profitability; the plentiful liquidity keeps interest rates low and, hence sustains the on-going investment projects and funds new investments in bottleneck areas.

Pushing China toward deflation is a high savings rate. While Americans save too little, Chinese save too much.

China needs to get consumers to spend more. To do that, the government should privatize state owned assets, shift fiscal expenditures away from investment and modernize pension, health-care and education systems.

The impact of globalization on the economic performance on China has proved to be a positive one as summarized throughout this essay. Globalization has created positives in the Human Development Index, there is more literacy and a longer life span as well as higher incomes and less and less people coming out of absolute poverty each year. China are not just benefiting themselves by becoming a more market based economy but they are also creating positives through the rest of the world by selling their comparative advantage of cheap labor to many transnational corporations and Foreign Direct Investors.

Although that they do have had an enormous positive out of globalization they also had negative in pollution levels and the income inequality. Although these are not what an economy is looking for the fact is that the positives that China has experienced outweighs the negatives a thousand to one.

As stated throughout the essay China has embraced globalization with open arms and uses many strategies to help the impacts that globalization has to offer which included their entry into the World Trade Organization, their active role in NAFTA, deregulation in many industries, privatization of many government owned organizations and the reduction of tariffs by almost 35% since 1980.