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The Development Trend of Globalization and Its Impact on China
2015-08-18
By Zhang Qi, Research Team on "World Economic Trend and Landscape", Research Department of Foreign Economic Relations of DRC
Research Report No 63, 2013 (Total 4312)
I. The In-depth Development Trend of Globalization Has Not Changed
Globalization has further strengthened interdependence between various countries through economic development. The slow growth of the world economy incurred by financial crisis and the readjustment of globalization in some areas have not changed the overall development trend of globalization. In the course of combating crisis and boosting economic resurgence, depending on internationalized production, foreign trade and services, cross-border capital flows and technical innovation, various countries have made intensified efforts in opening up international markets and allocating global resources, which have tightened up their economic connection and brought their interests more closely to each other.
1. International trade and cross-border investment have witnessed a quick recovery, with liberalization remaining as the main trend
In 2011, global trade and cross-border investment upped by 44% and 27%, respectively, as compared to the year of 2009 when crisis turned out the worst. In terms of policy, an indication of two-way readjustment of investment policies by various countries has cropped up after the financial crisis, and most countries continue their open policy and have further strengthened their investment promotion policies. In 2011, 67 new policies affecting foreign investment were unveiled globally, and the percentage of restrictive policies has dropped from 32% in 2010 to 22%. In terms of institutional arrangement, the continuous and rapid growth of regional and bilateral free trade arrangement (FTA) has been a prominent feature of globalization development. As of January 2013, the number of regional trade agreement (RTA) reported to GATT or WTO had reached a total of 546, up by 35 from a year ago. Moreover, a turnaround to important economies and an institutional arrangement for establishing trans-regional free trade have become a trend in free trade negotiations started or ready to start.
2. Transnational corporations continue to allocate resources and map out internationalized production across the globe
In recent years, transnational corporations hold a more important position in global economy. With attention being increasingly paid to expanding overseas operations, internationalized production by transnational corporations assumes an upward trend on the whole in recent years. According to UNCTAD's annual survey, in 2011 the overseas sales revenues and staff increase of 100 largest transnational corporations worldwide all grew evidently higher than the performance growth of their parent companies. In terms of the transnationality index (TNI) for measuring internationalization level, among non-banking enterprises globally, TNI of the top 100 increased constantly from 47.2% in 1993 to 62.3% in 2011.
3. Breakthroughs have been made in technical innovation and global issues have increased evidently
The post-crisis period tends to give birth to new technical revolutions and bring about innovative activities. In recent two years, various countries have increased R&D investments and rolled out plans one after another for the development of emerging industries. Although the prospects of the emerging industries remain ambiguous and the industrialization of technical innovation has a long way to go, breakthroughs have been constantly achieved in the new round of technical innovations characterized by the in-depth development and application of information technologies and by the development of new materials and new energy resources, which will inject new vitalities for global economic growth and helps various countries to accelerate structural adjustment and the transformation of growth patterns. At the same time, issues like climate change, environmental protection, resource scarcity, food safety, price performance of bulk commodities and population aging, have increased evidently across the globe, becoming critical factors affecting the sustainable economic development of various countries, making them to be clearly aware that only by cementing international cooperation can they solve the global issues and meet their common interest demand.
II. New Characteristics and Development Trend of Globalization
1. Profound changes have taken place in international economic patterns and emerging economies have become a new motive force for globalization
Over a long period of time, developed countries have been acting as an important engine for boosting the world economy. After the financial crisis, the economic growth of emerging economies were notably higher than developed economies, overall economic development assumes an accelerated upward trend, and the robust development of the emerging economies and the weak growth of developed countries in the course of economic recovery have evidently changed the strength comparison and the international economic pattern. In terms of the economic aggregate, between 2000~2011, the developed countries represented by G7 saw their economic aggregate drop from 66% to 48%, while E24 saw theirs rise from 16% to 29%. In terms of trade and investment volumes, the international standing of emerging economies and developing countries has been increasingly enhanced. The ratio of G7's imports to the global total dropped from nearly 50% to 37%, while that of E24's escalated from 16% to 28% during the same period；in 2011, the ratio of finished products exported by developing countries to the global total rose to 40.4%; in 2012, the amount of the global cross-border investments dropped to 1.3 trillion US dollars, yet developing countries attracted 680 billion US dollars of FDI, exceeding that of developed countries for the first time, accounting for a record high of 23% and 37% respectively in global foreign investments and cross-border mergers and acquisitions.
By virtue of their economic strength and ownership advantages, developed countries have always played as the propeller, dominator and rules formulator of globalization. In recent years, emerging economies and developing countries, through foreign trade and the attraction of investments, have gradually got integrated with international production system and global division of labor, enlivening global economic vitality. In terms of economic increment, during 2008~2011 nearly 90% of the global growing economic aggregate came from developing countries. In the course of industrialization, urbanization and deepening global division of value chains, emerging economies will show huge growth potentials and mammoth demand for global resources, technologies, overseas markets and cross-border investments, and will become an important force for boosting globalization. Moreover, with the improvement of the living standards, people of middle class will show up in big numbers and will become a new spotlight for future consumption growth, bringing about a new force for globalization and market opportunities. According to 2030 Global Trend: A Different World, a research report published by US National Intelligence Council in December 2012, during 2000~2020, China's GDP growth will make up 55% of the world total and, by 2030 India and China will constitute the major middle-class consumption share in the world, larger than the total of the United States and EU put together.
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