Globalization Promotes the Development of International Trade

As it is known, economic globalization stipulates the formation of international economics. Scholars emphasize that the modern world endures the intensive integration of international markets (The Saylor Foundation, n. d.). This tendency predefines that all states become significantly affected by international affairs at their political, economic, and social levels. For example, countries establish political relations that will support their trading ambitions and goals. At the same time, local businesses as well as multinational corporations, compete with foreign enterprises of various sizes. Moreover, economic and social globalization provides more opportunities for consumers from any geographic spot to purchase goods and services worldwide (The Saylor Foundation, n. d.). Without a doubt, this intensification of international trading creates new possibilities and challenges.

In this way, economic globalization encourages developed and developing states align their goals with the global demand. In practice it means that a country can benefit from international trade and the appropriate advantages overweight the costs. Nevertheless, the success is possible only when a country manages to effectively protect personal interests while trading with other states. This paper argues that the increase of the Chinese international trade is a rational response towards the external stimuli of economic globalization that is greatly advantageous for economic growth of China. To begin with, it is necessary to highlight that the growth of international trade has tripled starting with the 21st century. What is more, it has grown about 9 times for the last 30 years. China takes an important place in this global tendency. Consider the statistics, scientists estimate that the total sum of profits received from international trade amounted in 2 billion of the US dollars; whereas, for 2008 the sum reached 18000 billion (The Saylor Foundation, n. d., p. 4).

Type of service
Type of assignment
Writing level
Number of pages
Total price: $ 00.00
Total price: $ 00.00

Comprehending the magnitude of speed of changes, one should accentuate that the rapid growth of the Chinese economy is predefined by the right and timely alignment of the international policy. In particular, the state took the direction towards conquering the offshore markets, which increased capital inflow into domestic economy. As a result, the growth of the Chinese international trade was expanding simultaneously with economic globalization. To support this claim it is appropriate to refer to the statistics. Researchers report that in 2008, China's participation in the global trade was 7.9%; whereas, the country's share in 1980s was only around 3% (Table 1).

The above-revealed statistics illustrates the correlation between economic growth of China and global economic development. Scrutinizing this data one can rightfully assume that the development of international trades, as a manifestation of economic globalization, is positively related to the advancement of a domestic economy of a certain state. This premise complies with the benefit of international trade that is identified by European Commission. In particular, it educates that "trade can help boost development and reduce poverty by generating growth through increased commercial opportunities and investment, as well as broadening the productive base through private sector development" (European Commission, n. d., p. 1). This positive impact engages the expansion of the Chinese market worldwide. Moreover, discussing the effects of international trade on a state, in this case, China, it is appropriate to state that the above-discussed statistics refers to export. Nevertheless, the ratio of import is also an important indicator of the economic development that should be considered while establishing and evaluating the connection between economic globalization and domestic economic growth. For instance, the statistics of this state's trade performance reveals that it strives to decrease the amount of the imported products (Sun & Heshmati, 2010, p. 8).

This approach leads to the increasing gap between state's export and import. Assessing this peculiarity from the perspective of international trading, it is possible to claim that China is indicated as an exporter. It goes without saying that the focus on export creates new opportunities for the development of the Chinese businesses as was highlighted by as a benefit of international trade by European Commission. Besides, it also suggests China manages to utilize the tendency of economic globalization for attracting offshore investments to domestic economy. As a result, considerable investments and fast development of local businesses predefine the rapid GDP growth (Sun & Heshmati, 2010). This insight resonates with another advantage in international trade that is highlighted by European Commission. Specifically, it is noticed that economic globalization encourages states to trade openness. Experts scrutinize that this policy "expands business opportunities for local companies by opening up new markets, removing unnecessary barriers and making it easier for them to export"(European Commission, n. d., p. 1). In this regard, China is a vivid example of a state that admits the importance of trade openness and, thus, conducts the necessary improvements in order to align domestic economy with the global requests.

To modify and evolve Chinese economy, the state realizes the need to work at constant advancement of manufacturing, particularly, by creating a decent industrial base and assuring sufficient amount of natural and human resources. Moreover, the Chinese government admits the necessity of scientific researching aimed at surveying the mechanisms of international trading and their impact on domestic economy (Embassy of the People's Republic of China in the United States of America, 2011). To increase trade openness, the Chinese government improved its legislative base in w way that was supposed to create favorable environment for offshore investments (Embassy of the People's Republic of China in the United States of America, 2011). Undoubtedly, these approaches have a positive impact on financial and social well-being of the Chinese.

Furthermore, it is appropriate to mention that focusing on technological development has other positive implications apart from GDP growth. It improves people's quality of life in many areas. Therefore, it is not surprising that technological progress is identified as another benefit of economic globalization (European Commission, n. d.). It contributes to the worldwide integration of markets, helps setting competitive prices, and facilitates people's life in by increasing the quality of the produced goods and services. Moreover, developing know-hows suggests that the accessibility and diversity of products will increase, which also an important indicator of the improvement of one's life-quality. Taking into account the indicated positive implications that stem from state's policy of supporting technological progress, it is natural to conclude that economic globalization and increase of interactional trading positively impact domestic economy of China. Nevertheless, apart from the above-discussed advantages of economic globalization in terms of its impact on concrete states, it is obvious that there are certain costs. One of the greatest concerns is that international trading presumes the loss of taxes (Solleder, 2013).

To comprehend its wicked action, one should emphasize that conducting international trading the major part of taxes are obtained from the export of resources. That is why, it is natural to suggest that the absence of taxes for the exports of natural resources may stipulate the scarcity of resources. Estimating this dangerous situation from the perspective of political economy it becomes clear that the lack of resources automatically put a state in an unbeneficial international position. A country that does not have enough resources is at risk of dependency on other states. Therefore, the corresponding restrictions are quite rational. Considering that China is heavily populated, it is natural that this state protects own natural resources by maintaining the restrictions and taxes on exported resources. Scrutinizing the above-revealed counterargument, it is possible to state that it is reasonable, but its value can be lessened by the following rationale. It is known that resources are turned into capital, which is the core process of capitalism. It means that the export of resources is not the loss of national wealth, but rather is an exchange from natural resources to money and assets, which is essential for GDP growth. As a result, more capital is supposed to be attracted to the rapidly developing state that results in the enhanced value of a country on the international stage. Summing up the above-mention, one should accentuate that the enhancement of the Chinese international trading is topical and timely conducted. Specifically, the approach of trade openness complies with the modern realities of economic and social globalization that engages states to cooperate by uniting customers, businesses, and political interests of different nations.

The Chinese government manages to successfully utilize international trades with the purpose to increase the growth of GDP and improve life-quality of the citizens. As the above-revealed statistics suggest, China takes an important place in the modern international trade system. Therefore, it benefits from such advantages of international trading as the improvement of domestic economy, increased opportunities for local companies, and technological development. In addition, trade openness of the Chinese governments stipulates the development of healthy competition, which helps setting competitive prices under the conditions of the advanced quality of goods and services. The downside of the increased international trade is the loss of export taxes, which lessens the control over exported resources. Nonetheless, presently, China adheres to the policy of protection own resources by setting reasonable restrictions. At the same time, understanding the importance of trade openness and competitive prices, this state successfully turns own resources into capital. To stimulate further economic growth in a long-run, this state should achieve a proper balance between the restrictions of exported resources and ambitions to increase money supply.

Need an essay?
We can easily write it for you
Place an order

Related essays