Table of Contents

1)

Introduction: ........................................................................................................................................ 2

1.1) China and GDP Growth: ........................................................................................................................ 2 1.2) Accession with WTO: ............................................................................................................................ 2 2) 3) 4) 5) 6) Emergence of China: ............................................................................................................................. 3 Exports of China: ................................................................................................................................... 4 Chinas Free Trade Agreements: ........................................................................................................... 5 Chinas Gold Reserves: .......................................................................................................................... 5 Role of BRICS: ........................................................................................................................................ 6

China and Globalization

1) Introduction:
The term globalization refers to the crossing of national boundaries. It means the flow of goods, capital, information/technology and people across national borders. China practiced globalization in the Han dynasty (206BC-220AD) when trade took place between the Han Chinese and neighboring people in the North-west through the Silk Route. During the Tang dynasty (618901) trade flourished and the Silk Route expanded as Chinese traded with the Romans.

1.1) China and GDP Growth:

The dominant view now-a-days is that China has benefited hugely from globalization, evident in its high GDP growth. Chinese companies are getting bigger and stronger. As a result, China is rapidly industrializing itself into an economic superpower. Globalization has produced a double effect. On one hand, globalization stimulates an exportdriven high GDP by exploiting Chinas comparative advantage in cheap labour; and on the other hand, it has impeded Chinas industrialization by locking in Chinese enterprises at the low-end of the global value chain, preventing them from upgrading along the technological ladder.

1.2) Accession with WTO:

As we know, Chinas accession to the World Trade Organization (WTO) in 2001 was a momentous decision made by the top leadership. It was a big gamble for the Chinese enterprises, because prior to the accession, they were extremely weak in every measure compared with global firms.

2) Emergence of China:
Fifty years ago, China was a war-torn economy, emerging from one of the most tumultuous periods in its history. Even 20 years ago, in the twilight of the Mao era, the outlook was harsh and grim. Today, China is the world's fastest developing nation, growing at rates unimaginable 50 years ago, a dramatic transformation no one predicted. This should caution anyone from making any confident forecast of China in the next 50 years. The Chinese people have raised their expectations and aspirations. Every Chinese wants a strong and rich China, a nation as prosperous, advanced and technologically competent as America, Europe and Japan. This re-awakened sense of destiny is an overpowering force that will drive China's economic reforms and its integration into the global economy. China today dominates many of the worlds commodity markets. Its demand for commodities rose dramatically in the years leading up to the Global Financial Crisis, held up well during the crisis as prices fell, and continued to rise post-crisis. The pace of economic development, and processes of industrialization, urbanization, and rising per capita incomes, has seen China become a major commodity consumer on global markets, particularly in metals and energy. Since economic reforms began in 1978, China has experienced an unprecedented phase of industrialization and economic development. Annual economic growth of around 10 per cent over the past 30 years has centered on a development model that is heavily reliant on investment, which has helped accelerate the structural processes of industrialization, urbanization and motorization.

Chinas remarkable growth over the past 30 years has meant that its economy has doubled in size every seven to eight years. It now accounts for almost 15 per cent of global GDP on a purchasing power parity (PPP) basis and has accounted for almost 70 per cent of the increase in the weight of emerging market economies in global GDP since 1990 (Chart 1). Investment has been a key driver of Chinas growth, particularly over the past decade, and now accounts for nearly 50 per cent of GDP.

3) Exports of China:
Second-richest country China was the world's number one exporter in 2013. China shipped US$2.21 trillion worth of goods, up by 84% since 2009. Top 10 Exports of China: The top 10 exports of China are as follows, The following export product groups represent the highest dollar value in Chinese global shipments during 2012. Also shown is the percentage share each export category represents in terms of Chinas overall exports. 1. Electronic equipment: $561,703,550,000 (25.4% of total exports) 2. Machinery: $383,310,504,000 (17.3%) 3. Knit or crochet clothing and accessories: $96,810,372,000 (4.4%) 4. Furniture, lighting , signs and prefabricated buildings: $86,435,683,000 (3.9%) 5. Optical, technical and medical apparatus: $74,689,712,000 (3.4%) 6. Non-knit and non-crochet clothing and accessories: $68,271,919,000 (3.1%) 7. Plastics: $61,775,281,000 (2.8%) 8. Vehicles excluding trains and streetcars: $58,588,779,000 (2.7%) 9. Iron or steel articles: $57,368,576,000 (2.6%) 10. Footwear: $50,766,207,000 (2.3%)

Some of the industries supporting these exports, such as manufacturing electronic equipment and producing clothing, are labor intensive. This may explain why Chinas unemployment rate is 6.4 per cent compared to the estimated 9 per cent global average.

4) Chinas Free Trade Agreements:

China has eleven Free Trade Agreements in operation, with another three under negotiation and another three under consideration. Of these, many are relatively small, although useful for companies from the countries that have them Chile, Costa Rice, Iceland and Peru. The Pakistan agreement is often invoked in bilateral Sino-Pak relations, which are of course strong, with Pakistan being the largest recipient of Chinese outbound investment in South-East Asia, while China also has an interesting FTA with Switzerland signed off mid last year and due to come into effect later in 2014. Switzerland notably is not a member state of the EU, although it is a member of the European Free Trade Association and has a bilateral agreement with the European Union. Switzerland is one of the few European countries to enjoy a trade surplus with China, and the deal was Chinas first with a continental European nation. Switzerlands trade surplus with China was worth some US$23 billion in 2012, notably through the sale of luxury products such as watches, in addition to chemicals. A big winner in the deal was Nestle, which will be passing on savings it can make under the agreement to reduce consumer prices in China, making its products more competitive.

5) Chinas Gold Reserves:

China is an emerging superpower with huge gold reserves. China stands 5th in the countries list having the largest gold reserves. Is the most populous countries, China lies in fifth place in the list of countries the largest gold reserves. Bank of China with 1054.1 tons of gold represents 1.6 percent of the total foreign exchange reserves. Zijin Mining is the largest mining company in China. Analysts estimate China Gold more than 2,000 tons of gold reserves.

6) Role of BRICS:
BRICS is the abbreviation for an association of five major emerging national

economies: Brazil, Russia, India, China and South Africa. The grouping was originally known as "BRIC" before the inclusion of South Africa in 2010. The role of Brazil, Russia, India, China and South Africa (BRICS) as emerging protagonists in international development cooperation is significantly and rapidly changing. Over the last decade, BRICS have increased their financial as well as technical assistance and established distinct ways and means of economic cooperation, especially through south-south-cooperation with Low Income Countries (LIC). Within the last 10 years, BRIC have consolidated and even further expanded their strong position in the world economy. During their rise, BRIC remained stable and intensified economic cooperation linkages with other development countries. Among the group of emerging economies, BRIC are playing a crucial, if not systemic, role in global economy. Three main aspects are underlining the relevance of BRIC as leading role in development cooperation: 1. The outstanding size of their economies, 2. Strong growth rates, leading to increasing significance in world economy, and 3. The demand for a stronger political voice in international governance structures, which corresponds to their economic status