The Impact of Globalization: China and South Africa

Introduction

Fully-formed economic policies are an important part of a country’s success. Globalization helps a country to expand its borders and trade, in order to better its economy and to make life more fulfilling for their people. Globalization can have negative and positive effects, however, as can be seen in the economic history of South Africa and China.

Impact of Globalization

Globalization has an international impact on the world and on foreign relations. According to the World Health Organization: “Globalization, or the increased interconnectedness and inter-dependence of peoples and countries, is generally understood to include two interrelated elements: the opening of borders to increasingly fast flows of goods, services, finance, people and ideas across international borders; and the changes in institutional and policy regimes at the international and national levels that facilitate or promote such flows” (2013). Globalization can have both positive and negative impacts on development, although it is meant to open doors and borders so that countries can work together for the greater good of the world’s economy. Two examples of the heavy impact of globalization in the non-Western world can be found in China and South Africa.

South Africa

Circumstances Before and After Event

Africa has gone through quite as many changes throughout history, while South Africa is no exception. Recently, South Africa has gone through many changes. Africa itself, a large continent with many countries, has an economy that is reflective of these changes. In a recent study by the African Department of the Fund says that the number of countries in Sub-Saharan Africa has changed regimes as far as economies go. The “‘restrictive’ exchange regime declined from 26 in 1990 to only 2 in 1995, while the number of countries with a ‘substantially liberal’ trade regime rose from 26 to 38 over the same period” (Ouattara, 1997). The impact of globalization has been very complex for South Africa and its home continent.

Cause and Categorization of Influence

According to Jeffrey Herbst of Miami University: “The poor overall economic performance inevitably affects how Africa integrates into the international economy... while the African indicators for high tech integration into the world economy portrayed below are still above the South Asian averages, even this relatively positive differentiation will erode given the high rate of economic growth across South Asia” (2005). It is a relatively serious issue, the South African condition in the midst of the international economy. They are still a very poor country, despite having climbed the ranks.

In South Africa, however, the country has returned to the world economy. There was a time where they were not nearly on the map at all, at a time when other more developed countries were feeling the force of globalization. “Although the economic growth pattern is lower than acceptable norms in other emerging economies, the forces of globalization seem to be stronger than expected… approximately 98% of the current growth performance in the country can be explained by the forces of globalization” (Loots, 2002). The source, the article “Globalisation and Economic Growth in South Africa: Do we Benefit From Trade and Financial Liberalisation?” explains that, although South Africa is a developing country, globalization has had a positive effect on its growth as a community.

Native Response

The native response to the globalization of South Africa has been intense and political for a few decades now. According to Herbst: “For instance, in Botswana and South Africa, there are significant, politically-inspired, restrictions on the use of skilled foreign labor, even though both countries have skill gaps that impede growth and despite the heavy use of foreign skilled labor by non-African countries that have developed in the past” (2005). He writes that, for South Africa and the surrounding countries to true success, they must find a group need for growth and economic fixtures (2005). The native response is not overall negative, but the globalization of South Africa of predominantly white European countries has been tremendous, and even in this modern-day, there is much to be done and it must be done as a unit – the country must work together to fix their economy.

China

Circumstances Before and After Event

The globalization of China, as noted by Zha Peixin in the speech “China and Globalization,” is often seen as a double-edged sword that brings opportunities and challenges, advantages and disadvantages (2003). Peixin also writes that China must meet these benefits and downfalls as an opportunity to fine-tune current public policies. The ambassador notes that China’s globalization was an inevitable change, by means of international change, scientific advances, and other forces. However, China’s reaction was that they could not stay isolated but doors were opened to welcome the changes of globalization.

Cause and Categorization of Influence

There are gaps in growth for China. According to the article “China and Globalization” in the journal Economic Affairs, “growth is too reliant on exports and not enough on domestic consumption. The public sector becomes politicized and unproductive… This is made worse by misguided industrial policies to promote ‘strategic’ industries (2007). Growth, as far as economic policy and the changes that a country needs for success, in China has not been a one-way street. Peixin mentions several times that China must stay open in order to change for the better, and that isolation against the globalization of China is a dominant-negative.

Analysis

In the last 20 years or so, China “has maintained an annual growth rate of over 9.3% on average” (Peixin, 2003). In 2003, China could be noted as the 6th largest economy, as well as the 5th largest trading nation in the world. Because of globalization, more than 200 million have been able to rise above poverty and the average life expectancy has increased. It is not 71.8 years, which is nearly at the rate of a moderately developed country (Peixin, 2003). China has been able to pave their own road to economic success through globalization and the recognition of new world policies and technology. Mainly, they live with socialist ideals. Peixin says: “in one word, building socialism with Chinese characteristics is to base what we do on the realities of China” (2003). China’s own analysis of the effect of globalization on their economy has been to take any negatives and convert them into ways to positively affect their economy.

Native Response

Again, the leaders of China know that ignoring the advances of globalization is negative for a country’s success. The people remain hopeful. China’s new Premier, as of 2003, believes there are a few good points that should be applied to the country’s economic policy that will turn them around as a whole. China must continue to advance in fixing the economy and including international trade. There are also major economic issues, unemployment, social security and public expenditures (Peixin, 2003). These will help to maintain economic order, despite the rest of the world’s role in the country’s policies. The premier and the people of China remain hopeful and know that they must work to fix the issues within their economy.

Conclusion

The economics of globalization should be taken as an opportunity for a country to grow and to change their public policies in such a way that their country may be better. It is possible that globalization causes negative policies and effects on a particular country – China and South Africa – but there are lessons to be learned with economic policies of any sort.

References

WHO. (2013). Globalization. World Health Organization. Retrieved from http://www.who.int/trade/glossary/story043/en/index.html.

Herbst, J. (2005). Africa and the challenge of globalization. Miami University. Retrieved from www.thebrenthurstfoundation.org/.../Africa_Globalization.pdf.

Loots, E. (2002). Globalisation and economic growth in South Africa: Do we benefit from trade and financial liberalisation? TIPS. Retrieved from http://www.tips.org.za/files/585.pdf.

Peixin, Z. (2003). China and globalization. Embassy of the People’s Republic of China. Retrieved from http://www.chinese-embassy.org.uk/eng/dsjh/t27161.htm.

Sally, R. (2007). China and globalisation. Economic Affairs, 27(4), 82. doi:10.1111/j.1468-0270.2007.00788.x