2. Contents An Overview of Globalization 1 China and
Globalization 2 Challenges under Globalization 3 4 Conclusions 3.
1. An Overview of Globalization Globalization 1-1Free Flow of
Information 1-6 Growing Number of Global Phenomena 1-2 Free
Movement of Labor 1-3 Expansion of GlobalTrade 1-5 Convergence
ofBusiness CyclesAmong Economies 1-4 Integration of Financial
Markets 4. 1-1 Rapid and Free Flow of Information In the year 2000
In the year 2006 Every18out of 1,000 Chinese people had access to
the Internet Every105out of 1,000 Chinese people had access to the
Internet
- Breakthroughs in computer, communication and multi-media
technologies
- in the past few decades have facilitated freer flow of
information.
- A student in Beijing can almost simultaneously obtain
information of
- Oxford University , as long as he or she has access to the
Internet.
- According to our statistics:
The number increased5 timesin 6 years
- The global sharing of knowledge and technologies is at an
all-time high.
5. 1-2 Free Movement of Labor
- Relaxation of restrictions on labor movement across borders
leads to freer exchange of professionals and skilled workers.
- On every Monday morning, business class of almost all the
flights from HK to Beijing is full, the vice versa on the other way
round every Friday afternoon.
- Everyday, China has 20m rural labors working in cities.
6. 1-3 Expansion of Global Trade
- According toWorld Development Indicator:
-
- The international trade as a percentage of global GDP increased
from 7.6% in 1948 to 28.4% in 2005.
19 thcentury Mid-19 thCentury 1%~ 2% International Trade/Global
GDP 5% 1913 12% 7.6% 20% 25% 28.4% 1948 1999 2000 2005 7.
- In Chinas case: the trade as a percentage of GDP increased from
9.7% in 1978 to 64% in 2006
8.
- Global production network is taking root in the Chinese
market.
9. 1-4 Integration of Financial Markets
- Global financial markets are increasingly integrated in the
contextof financial deregulation.
-
- Development of off-shore financial market and derivative
instruments
-
- Evolution towards financial conglomerates
-
- Financial policies in different countries are more than ever
intertwined .
-
-
- Interest rate policy, exchange rate policy, banking
supervision
-
-
- cooperation and coordination etc.
10. 1-5 Convergence of Business Cycles Among Economies
- No obvious links were witnessed between business cycles of
major industrial economies after World War II, with the only
exception of the world-wide economic crisis between 1973 and
1975
- Today, the business cycles in the Asian Pacific Region, Europe
and America become quite synchronized:
-
- Asian Financial Crisis in 1997 triggered economic slowdown in
Europe and America.
-
- The sluggish economic performance in the U.S. in 2001 turned
into a worldwide phenomenon.
-
- A global stock market volatility witnessed with the sudden
plunge in Chinese stock market On 27th February 2007.
11. 1-6 Growing Number of Global Phenomena
- Today, what happening in one country can easily extend beyond
the country of origin and become a global issue.
Environmental Damage Infectious Diseases Internet breakdown
National Safety and Security Financial Crisis Terrorism Global
Phenomena 12. 1-7 Implications of Globalization
- Generally speaking, the world is becoming a global
village.
- Globalization is a double-edged sword:opportunities vs.
competition & challenges.
- Common prosperity under globalization requires considerable
efforts.
- Efficient economic outcome from globalization needs facilitated
cooperation and common enforcement.
13. 2. China and Globalization A Win-Win Optionfor China and the
World 2-1 Chinas Engagement in Globalization 2-2 14. 2-1 Chinas
Engagement in Globalization A Snapshot of Chinas Development
64%9.7% Trade as the percentage of GDP36.8% 17.2% 6.7% 9.7% Annual
Growth Rate US$73.5bn 0 Actual Utilized FDI US$ 1.76tn US$ 20.64bn
TradeUS$1.07tn US$0.167bn Foreign Exchange ReservesRMB 11,759RMB
343 Per capita disposable income of urban residents RMB 20.9tn RMB
362.41bnGDP 2006 1978 15.
- China ranks No.3 in international trade, and the contribution
of trade to GDP has risen to over 60%.
- China plays an important role in international production
chain, taking advantage of its large pool of labor force.
- Chinas demand for import has been growing, with a total of US$
791.6 billion worth of goods imported in 2006, marking a
year-on-year increase of 20.0%. And China has basically maintained
a balance between import and export.
Chinas Participation in International Trade 16.
- Chinas financial industry is increasingly opened and playing by
international rules.
-
- Foreign banks established in China 246 representative offices,
161 branches, 18 subsidiaries as of end-March 2007.
-
- Through restructuring and reforms, local banks are benchmarked
against international standards and best practices.
-
- Introduction of foreign strategic investors brings in the
much-needed know-how.
- China kicked off the QFII and QDII schemes in succession, which
serve as an avenue for Chinas integration into the international
financial markets.
- China is developing its financial markets and various financial
instruments according to international practice.
Chinas Reforms and Opening-up 17.
- China is playing an increasingly important role in world
economic and political arena, evidenced by its participation in and
cooperation with:
-
- Multilateral Institutions: UN, WTO, IMF, World Bank, etc.
-
- Regional Organizations: ASEAN+3; ASEAN+1; Cooperation among
China, Japan and Korea; relationships between China and South Asian
countries; Shanghai Cooperation Organization; China-Africa
Cooperation Forum etc.
-
- Cross-border Taskforce: Asian Financial Crisis,
Anti-terrorism,Six-party talks on North Korea issue, etc.
Chinas Active Participation in International Affairs 18. 2-2 A
Win-win Option for China and the World
-
- The number of people living on less than US$1 per person per
day in China was reduced from 634million in 1981 to 212million in
2001. The proportion of people living under such poverty line
decreased from 63.8% in 1981 to 16.6% in 2001.
- A broad international market
-
- Chinas share in global trade increased from 0.6% in 1978 to
14.2% in 2006.
- China has made big strides in increasing real per capita
GDP.
From the Perspective of China 19. 20.
- Contributions to global poverty reduction
-
- China accounts for more than one fifth of the worlds
population, so the poverty alleviation of China has contributed
significantly to that of the world.
-
- The worldwide population living under poverty line decreased
from 1,482 million in 1981 to 1,089 million in 2001, representing a
dramatic reduction from 40.4% to 21.1% measured by its share in
global population. Excluding China, the sheer number of people
living under poverty line worldwide increased from 848 million to
877 million.
From the Perspective of the World 21.
- Contributions to abundant commodity supply with reasonable
prices in world market
-
- China has provided to the world the quality products with
reasonable prices, such as clothes, shoes, & some electronic
products.
-
- China has made important contributions to keeping the global
inflation in rein.
From the Perspective of the World 2.83 2.96 2.91 UK 1.74 2.26
2.40 France 1.95 1.67 1.05 Germany 2.19 2.14 2.07 EU 3.39 2.68 2.27
US 2005 2004 2003 Consumer Price Index 22.
- An engine for the worlds sustained economic growth
-
- During Asian financial crisis in 1997, China managed to
maintain a growth rate of 8.8%, and played a positive role in
stabilizing and reviving the regional economy. In 2001, the worlds
economy grew at a low rate of 2%, while China maintained growth of
9%. In 2005, Chinas economy grew at a rate of 10%, contributing to
the robust global growth of 4%.
4 4 3 2 1 4 US 1 2 1 1 2 4 EU 10 10 10 9 8 8 China 4 4 3 2 2 4
World 2005 2004 2003 2002 2001 2000
-
-
- Economic Growth Rates of Different Regionsand Countries %
From the Perspective of the World 23.
- Contribution to global and regional peace & stability
- China is a country with Confucianism embedded in its national
characteristics that values harmony. In such a spirit, China plays
an important role in mediating and resolving international
disputes.
From the Perspective of the World 24. 3. Challenges Under
Globalization External ChallengesInternal Challenges
- For China, globalization means both opportunities &
challenges .
25. Key Challenges Need for rebalancing growth #1 Need for
adjustment of savings & investment #2 Need for the next
generation of talent and reformers #3 26. Challenge I:Need for
Rebalancing Growth
- Robust Economic Growth in China
27.
- But consumption as the percentage of GDP fell. (62% in 1990,
50% in 2006).
- Chinas consumption share is much lower than that of most other
Asian economies.
28.
- In the meantime, Chinas current account surplus has surged in
recent years.
- Rapid build-up in Chinas foreign exchange reserves led to
excess liquidity.
29.
- Excess liquidity is partly interpreted into continuous surge in
real estate and stock prices as well as loan supply.
30. Challenge II: Need for adjustment of savings &
investment
- Both household and corporate savings are very high.
- Thin social safety net and high cost of education and housing
lead to high precautionary private savings
- Thorough reforms in social security system, medical-care and
education are needed.
- Sustained increase in social sector spending is needed.
31.
- Over-investment in many sectors.
- Need to foster further development of and competition in
financial markets.
- Profitable SOEs must give their dividends that could finance
needed social sector spending.
32.
- Lack of effective monitoring and legal enforcement caused
pollution as over-investment goes.
Our Response:
- Less waste + less energy use = cleaner environment
- Low sulfur fuel + clean vehicle + technologies = better air
quality
- More effective enforcement + better cultivation = workers death
numbers and hospital admissions decrease
33. Challenge III:Need for the next generation of talent and
reformers
- Success depends on the energy and ideas of Chinas leaders.
- It is harder than ever to attract, develop and retain
talent.
- Need for better enrollment system to identify the best minds at
home and abroad
- Need for popular participation and strengthened official
accountability
- Need careers open to talent.
- Need clean environment to nurture a new, committed generation
of leaders.
34.
- China will continue to reform its political structure, develop
socialist democracy, expand citizens orderly participation in
political affairs, and ensure that people exercise democratic
elections, democratic decision-making, democratic management, and
democratic supervision in accordance with the law.
- --President Hu Jintao, during his April 2006 visit to US
- It is important to build a contingent of public servants who
are politically reliable, professionally competent and clean and
honest and have a good work style.
- --Premier Wen Jiabao, in 2004, report to the congress
35. 4. Conclusions 4. Conclusions 36.
37. 38.