Globalization is describing the growing interdependence between the world economy, culture and population.
It is brought about by the cross-border trade of goods and
services, technology and investment flows, people and information. Countries
have established economic partnerships to promote these movements for
centuries. However, after the Cold War in the early 1990s the Globalization
became popular because these cooperative arrangements affected modern daily
life. Globalization encourages each country to focus on using the least
resources, the so-called comparative advantage, to produce the best products.
This concept makes production more efficient, promotes economic growth, and
reduces the prices of goods and services, making them more affordable, especially
for low-income families (Kolb, 2019; Yalcin, 2018).
The process of China's reform and opening up and the
expansion of globalization occurred simultaneously, which enabled China to
obtain huge capital inflows and strong technical support while its products
entered the world market. Therefore, China has shown two faces to the world: a
rising world factory that provides low-cost manufactured products, and the
world's second largest importer of energy, minerals and agricultural products.
The world ranking of China's nominal GDP jumped from 10th in 1978 to 2nd in
2010. When it comes to purchasing power parity, China surpassed the United
States in 2014. Many people expressed the belief that China has become the
biggest winner of globalization, and some of them even believe that China has
begun to take globalization initiatives, and not just being affected by
globalization. The relationship between China and globalization provides the
key to understanding the contemporary world.
The
process of reform and opening up in 1978 coincided with the beginning of a new
technological revolution in developed countries. China has seized this
opportunity to join the new division of labor in the world economy, starting
from labor and resource-intensive industries, and gradually focusing on
higher-level electronics industries that attract large amounts of foreign
investment. Before India and other developing countries are fully aware of
China's development, the country has established itself as the world's factory
and has become one of the most successful players in the global game.
By
allowing globalization to penetrate China, China's economic structure and
industrial capabilities have undergone tremendous changes. Since the past 30
years, China’s GDP has grown at a double-digit rate. A large number of rural
laborers have immigrated to cities. China's manufacturing productivity has
achieved amazing growth, ranking first in steel production, shipbuilding and
heavy machinery. China has helped and lifted millions of people out of absolute
poverty and set a world record. All in all, no one denies that Chinese society
has undergone a comprehensive transformation. China is no longer a neighboring
country, but has now become the center of the world stage (Liu & Yan, 2015,
pp1-10).
As the global economy is now
focusing more on China, therefore, new opportunities for companies to enter the
Chinese market are emerging. In other words, globalization has already had an
impact on China's economic growth. China is becoming the new champion of globalization,
trade and economic cooperation. As other companies retreat from the forefront,
Chinese companies are seeking to expand and develop into all corners of the
world (Lu, 2018).
