Last Updated 09 May 2021

Economic Globalization Essay

Category Globalization
Essay type Process
Words 1137 (4 pages)
Views 379

Economic globalization has become the most important feature and a general trend of present world economic development. Globalization is a phenomenon and also a process of development of mankind and human society. It is an essential feature of the modern age. Globalization is the cross-border flows of capital and goods, including capital, labor, technology and natural resources. Economic globalization is a historical process, and the germination of it could date back to the 16th century.

After the industrial revolution, the capitalist commodity economy, modern industry and transportation have been developing rapidly. The world market was fast expanded and foreign trade was becoming more frequent. Since the 1990s, the booming advanced technology, with the information technology revolution as its core, has fast developed. It has not only swept the national boundaries but also reduced distances between nations and nations (Gills, B. & Thompson, W., 2012).

The rise of Internet information technology and the globalization of transportation, information, science and technology and culture have to lead to the all-around development of globalization. But Ghemawat (2007) noted that the idea of a ‘flat’ world was wrong and the world was in the stage of semi-globalization. El-Ojeili and Hayden considered economic globalization as the most debated topic within the literature on globalization (2006, p58). This essay will argue that economic globalization does more harm than good and analyse the reasons and effects of economic globalization.

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Bad Economic Effects of Globalization Weakening of National Sovereignty Economic globalization has weakened the national sovereignty of developing countries. Under the condition of economic globalization, the power of developing countries in world economic affairs was correspondingly reduced due to the increase of the world’s market forces and the constant expansion of the multinational corporation. Especially as production structure is becoming global, actually it is hard for developing countries to fully control domestic production structure.

It is obviously contrary to the idea of national sovereignty (Agnew, 2009). Worse, the political sovereignty of countries is strongly shocked as well. It can be embodied by the enhancement of international intervention. The independence, safety and territorial integrity of developing countries could be interfered by some powerful developed countries such as the United States. Take China as an example. China formally joined the WTO in 2001. With China’s entering WTO, domestic economic policies were forced to be restrained by international trade rules.

The average duty of agricultural products dropped to 15 percent. The average tariffs on industrial products were down to 8. 9 percent. And the average tariffs on information technology products dropped to nearly zero (Plappert, 2010). Tariff concession would do harm to China’s competitiveness and lead to negative protection for enterprises. World Economic Instability As business ties between the two countries have grown in the process of economic globalization, the interdependence among nations is unprecedentedly strengthened.

Therefore, the ups and downs of the economy and the contagion of the international crises became avoidable. The internal imbalance of any country will reflect its external imbalance (Michie, & Smith, 1999). This kind of imbalance will soon influence those countries that have close trading and investment relationship with it. As a result, all the related countries will put into trouble and imbalance. The Southeast Asian financial crisis of 1997 can be taken as a good example (El-Ojeili, C. & Hayden, P. , 2006 ).

On July 2ed 1997, the Bank of Thailand was forced to float the baht under the great press of currency. Baht was devalued by 15 percent in one day (McBride, 2002). The currency devaluation stormed Southeast Asia such as the Philippines, Malaysia and Indonesia, and put them in recession. Soon later, the devaluation had a great impact on Russia and Latin America. The negative impact on globalization can be clearly illustrated from the financial sphere. One collapse in the financial sector would lead to a domino-style economic collapse. Global Stratification

Global stratification can be defined that globe countries and areas are not on an equal footing in the process of economic, political and cultural globalization (Andersen & Taylor, 2006). Economic globalization has exacerbated the imbalance of the world economy and has widened the wealth gap. Globalization has brought unfair relationships between developing countries and developed countries. Gao (2000) noted that economic globalization has expanded the gap between South and North. And it has brought huge shocks to the national economy of developing countries.

International economic organizations like the Word Bank, IMF and WTO are in the hand of developed countries. All the principles, institutions and sequences for the world economic operation are made by them. What’s more, the economic, technical and management advantages that is owned by Western countries cannot be easily and fully surpassed by developing countries. It is fair to say that the ones who benefit the most from economic globalization are developed countries whose social productive forces are highly developed.

However, it is difficult for developing countries that are relatively backward in economy and technology to benefit a lot in a short time. And they may even be strongly damaged and shocked, such as the bankruptcy of national enterprises. It is no doubt that economic globalization can objectively lead to an increase of world material wealth. However, competition is the first rule in the process of globalization. It inevitably leads to the enlargement of the gap between rich and poor while it is creating high efficiency.

Additionally, global stratification can cause unequal treatment of life chances. The inequality can be illustrated in many areas, such as newborn mortality, life expectancy, medical resources and educational resources. Sixty percent of the world’s population live in countries whose average annual income is less than 760 dollars (Kendall, 2012). The population of the richest country is only 15 percent of the world’s population. Environment Pollution Global trade liberalization has accelerated the unprecedented ecological resource consumption of the Earth.

It directly threatened the Earth's biological diversity system and brought negative consequences in many aspects to the global ecological environment. The first is that the global timber trade has led the original forest to be cut down in the large areas, and it seriously damaged the biodiversity systems. (Hirst & Thompson, 2009) Half of the world's species are contained in the forest. With the original forest has been cut down in large area, the original plant community of the forest has suffered destruction and the biological species are in the mass extinction.

For example, the Amazon is the world's largest tropical rain forest, and here has the most abundant species of plant and animal in the world. It plays a very important role in stabilizing the local climate and provides some fatal diseases in the world with the prescription of raw materials (Mol, 2003). However, deforestation has put the Amazon into extinction ruins center. Besides, the lacking of forests will lead to high carbon dioxide emissions. America’s carbon dioxide emissions rank first in the world. It's per capita carbon dioxide emissions are nearly 20 tons.

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Economic Globalization Essay. (2018, Mar 06). Retrieved from

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