Globalization refers to the tendency of investment funds and businesses to
move beyond domestic and national markets to other markets around the globe,
thereby increasing the interconnectedness of different markets. Globalization
has had the effect of markedly increasing not only international trade, but also
The advantages and disadvantages of globalization have been heavily
scrutinized and debated in recent years. Proponents of globalization say that it
helps developing nations "catch up" to industrialized nations much faster
through increased employment and technological advances. Critics of
globalization say that it weakens national sovereignty and allows rich nations
to ship domestic jobs overseas where labor is much cheaper.
Economic globalization and China
Economic globalization can be compared to a two-blade sword or a coin with
two sides. Advantages and disadvantages exist side by side. It can also be
likened to swimming in the sea in summer. One can enjoy the cooling feel of the
water and swimming can improve the physique; but one also runs the risk of
catching cold or even drowning.
The developed countries are good swimmers,
while the developing countries are less strong in physical strength and poorer
in swimming technique of swimming, or even just beginners. It is only natural
that they feel very differently about swimming in the sea.
Globalization offers China opportunities as well as challenges. How should it
strive to profit from the advantages and avoid the harm brought about by the
disadvantages? Attention is demanded to the following aspects.
First, making better use of foreign investment to promote the industrial
uplifting. China welcomes medium and small overseas entrepreneurs to invest and
also sets great store by investment from foreign transnational corporations and
big foreign enterprises. Capital is encouraged to exploit underdeveloped regions
in western China, and further develop labor-intensive industries using China's
rich resource of relatively cheap labor.
An even greater amount should be used to speed up the development of high and
new technological industries, so that China's industrial standing can be raised
and its international competitiveness strengthened.
Second, speeding up the reform of the financial system and improving the
risk-prevention system. The setting up and improvement of the central bank,
organized to carry out specific polices, the commercial banks and non-banking
financial institutions, should be continued. The state-owned banks should be
commercialized and genuinely run in accordance with the demands of a market
In financial macro-control, the principle of sectoral operation and
management should be implemented, a centralized and unified supervision system
promoted, and the mechanism of supervision over foreign banks in China should be
worked out and improved as soon as possible, so that an effective financial
safeguard and security mechanism can genuinely function.
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