The impact of economic globalization

The influence and essence of economic globalization

Economic globalization is one of the important characteristics of the contemporary world economy and an important trend of world economic development. The process of economic globalization has begun, especially since 1980s, especially since 1990s, the process of world economic globalization has been greatly accelerated. Economic globalization is conducive to the rational allocation of resources and production factors in the world, the global flow of capital and products, the global expansion of science and technology, the economic development of underdeveloped areas, the performance of human development and progress, and the inevitable result of world economic development. But it is a double-edged sword for every country, which is both an opportunity and a challenge. Especially for developing countries with weak economic strength and relatively backward technology, the risks and challenges will be more severe in the face of fierce global competition.

Since the 1990s, the negative impact of economic globalization has become increasingly apparent:

First of all, economic globalization makes the global economy more obvious. Due to the unprecedented interdependence of national economies, the internal economic imbalance of any country will lead to the external economic imbalance, which will affect the countries closely related to its economy and eventually "infect" all countries to varying degrees. The currency crisis in Thailand two years ago quickly spread to Southeast Asia, South Korea and Japan, causing a serious regional financial crisis, and then spread to Russia and Latin America, triggering a global financial storm. This is a typical example.

Secondly, economic globalization makes the economic sovereignty of countries, especially the independence of fiscal and monetary policies, face increasingly severe challenges. Some of these challenges are the "positive" concessions of economic sovereignty, including the previous negotiations on tariff reduction and trade liberalization in the World Trade Organization, and the "economic adjustment" that some countries were forced to make in order to obtain assistance from the International Monetary Fund. There is also the interference of transnational private economic forces in the economic sovereignty of various countries. The most typical examples are multinational corporations and international hot money. According to the statistics of UNCTAD, at present, 1/3 of world GDP, 2/3 of world trade volume and 90% of world foreign direct investment are all created by multinational companies, but their strategic objectives are rarely consistent with the long-term economic planning of the host country, which has a negative effect on the economic policy of the host country. The experience of many countries shows that multinational companies are often the main responsible persons for large-scale currency speculation during the period of exchange rate turmoil. At the same time, under the background of economic globalization, the capital accounts of various countries are gradually opening up, and the effectiveness of capital control is declining, which has opened a "convenient door" for the impact of international hot money and made many countries suffer from the impact of foreign capital.

Third, economic globalization has aggravated the existing gap between the rich and the poor. Global competition has created efficiency, while wealth is increasingly concentrated in a few countries or a few interest groups. One of the reasons is the uneven distribution of benefits brought by economic globalization. As the main owners of capital and advanced technology, developed countries have always been at the center of globalization, which makes them occupy a dominant position in price setting. They can use their control over the World Bank, the International Monetary Fund and the World Trade Organization to formulate self-interested rules and implement convergence standards, forcing developing countries to open their markets; However, developing countries, as the main owners of labor force, have always been in a marginal position.

The essence of today's economic globalization is capitalist globalization, which is the expansion and extension of capitalist relations of production on a global scale. At present, the urgent problem to be solved in economic globalization is to establish a fair and reasonable new economic order to ensure the fairness and effectiveness of competition.

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