How Globalisation Has Impacted On Asian Economy?
Updated: Apr 8, 2019
Globalisation is the process of global integration which arises from the exchange of world views, ideas, products, trade and etc. Globalisation started in the 1980s and has spread worldwide because of technological advancement in the areas namely, transport and communication.
It was fuelled by the need of developed and developing nations. The developed nations’ multi-corporations (MNCs) has the need to maintain price competitiveness. But their home countries are developed and they faced high labour cost. Consumers always demand for cheaper and better goods.
In order to continually supply affordable and competitive priced goods, the MNCs need to find a way to lower their labour cost to fight other competing MNCs. Thus, globalisation became a platform for the developed nations’ MNCs to shift their productions to developing nations. The developing nations need foreign direct investment and creation of businesses and jobs for their poor populations and so they open their doors to foreign MNCs and welcome them in to create jobs and exploit their cheap labour. This became a win-win situation.
Effects of Globalisation on Asian Economies
Middle Class Creation Asia benefited the most out of globalisation. The MNCs came into Asia, they build factories, created massive jobs and by 2010, these MNCs had help Asia created a huge pool of middle class ready to consume even more products than their European neighbours. This cannot happen without the foreign direct investments of the global companies.
Technological Advancement The MNCs brought in new technologies into many countries. They advised many Asian governments on technology and infrastructure in order to support their manufacturing productions. This brought about a huge technological advancement in many Asian countries. India is the best example, they became the world best information technology outsourcing centre for the world. Infrastructure Advancement China was much undeveloped even in the early 1980s. But when Deng Xiaoping opens up china to foreign direct investment, the world witnessed the rapid infrastructure advancement of China. Tonnes of foreign Direct Investment were brought into China. Infrastructures were built to support the MNCs. High tech parks, industrial parks and science parks were built to help support the MNCs’ globalisation plans to tap into China cheap labour. The world witness how the MNCs made China into the world’s manufacturer. The middle class of China was created, with higher salaries they demanded better housing and amenities. Thus, China infrastructures grew leaps and bounds.
Economy We have to admit that the western world had contributed much to Asia’s rise. Without these MNCs flooding into China and Asia to provide jobs and build the economy of Asia, we will not have arrive to today’s news that China had become the world’s No. 2 economy and India is on the way to be top in the next 30 years’ time.
Yet the subject of globalisation is without controversies. Much oppositions in politics view that the quest of MNCs shifting jobs to cheaper countries and then importing back these cheap goods to sell to their locals without tariffs is causing massive unemployment to their developed countries. Many political oppositions attempt to stop MNCs from shifting to cheaper countries as this would mean massive jobs losses to the local and it would be unfair to ask the affected unemployed locals to buy these goods that were indirectly responsible for their job losses.
Conclusion Globalisation had indeed build Asia’s economy, the huge pool of middle class, infrastructures and technological advancement. Many argued that globalisation benefits Asian economy more than the developed nations. However, this is not necessarily true in the long term because in the long run as Asia’s middle class keep growing, the Asians will start to buy from these developed nations in larger quantities then they would ever expect. In fact, we are already witnessing wealthy Chinese queuing up in luxury stores all over Europe.