Economic Globalization

It refers to the process that the economies of various countries and regions integrate with each other due to market expansion and gradually form the global economic integration driven by the new scientific and technological revolution and the development of social productivity to a higher level. It is an objective result of the development of productive forces around the world, and an objective trend independent of man's will. It is characterized by the large-scale global expansion of economic activities such as production, trade, investment, and finance, the flow and allocation of production factors such as products, technology, capital, information, and human resources around the world, and the resulting intertwined pattern of inseparable interests among countries. With the development of the global economy, the driving force of the scientific and technological revolution, and the end of the Cold War, the trend of economic globalization has been accelerating since the 1990s. Economic globalization is driven by developed capitalist countries and they have played a leading role. Economic globalization is a historical process that has broad and narrow meanings.

Broadly speaking, economic globalization began with the geographical discovery and overseas colonial expansion of Western European countries 500 years ago. Especially after the European Industrial Revolution, the capitalist commodity economy, modern industry and transportation industry developed rapidly, the world market formed and accelerated expansion, and the trade between countries in the world significantly exceeded the historical level. As early as a century and a half ago, Marx and Engels pointed out in the “Communist Manifesto”: “As the bourgeoisie has opened up the world market, the production and consumption of all countries have become worldwide”. Economic globalization in a narrow sense refers specifically to the process of global trade liberalization and investment liberalization that emerged after the World War II under the background of a new round of scientific and technological revolution and the strong promotion of the United States. Since the 1990s, economic globalization has developed rapidly. It is guided by scientific and technological revolution and information technology development, covering all fields of production, trade, finance and investment, as well as the world economy and all aspects related to the world economy. It is mainly manifested as follows: the international division of labor has developed from a vertical division of labor to a horizontal division of labor, world trade has grown rapidly, a multilateral trading system has been formed, international capital flows have reached an unprecedented scale, financial internationalization has accelerated, and multinational companies’ influence on the world economy has increased, and the coordination role of the international economy and the intervention role of international organizations and regional organizations in economic development have strengthened. The essence of economic globalization is the globalization of capital, and is the objective trend of the socialization of production and the internationalization of economic relations.

Economic globalization is conducive to the optimized combination of various production factors and the optimal allocation of resources on a global scale, the global flow of capital and products, the global expansion of science and technology, and the promotion of economic development in underdeveloped regions. Economic globalization is also a "double-edged sword", which brings about both opportunities and challenges. While promoting the development of productivity and accelerating global economic growth, it also brings many negative impacts and increases the economic and social problems faced by all countries and the world. Economically, it has intensified international competition, increased international risks, weakened the sovereignty of various countries, caused the hollowing of industries in some developed countries, and seriously impacted the national industries of developing countries. Due to globalization, the economies of various countries become interdependent with increased mutual influence. The economic crises of individual countries and regions can easily evolve into global crises. Since economic globalization is dominated by western developed countries, the urgent problem to be solved in economic globalization is to establish a fair and reasonable new international economic order so as to ensure the fairness and effectiveness of competition. In the face of the pressure from economic and technological advantages of developed countries, the sovereignty and economic security of developing countries are more challenged than developed countries.

Developing countries should formulate and implement correct policies according to their actual conditions, open to the outside world in an orderly manner, and pay attention to improving their ability to prevent and resist risks, so as to seek benefits and avoid harms. In terms of responding to various crises and risks, all countries should, in the spirit of shared responsibility and risk, strengthen international cooperation, promote the international economic order to develop towards a fair and reasonable direction, and build a mutually beneficial and win-win multilateral economic system for common development. What mankind needs is the economic globalization that promotes equality, mutual benefit, win-win results and coexistence of all countries in the world. The impact of economic globalization is not limited to the economic field. In the context of the global flow of various factors, epidemics (such as AIDS, various influenza and Ebola viruses), crimes (such as drug smuggling, arms smuggling, and illegal immigration) and terrorist activities originally confined to a country or a region, can easily spread around the world. It is an important task of the international community to respond to these global challenges brought by economic globalization in these non-economic fields. The Report of the 16th CPC National Congress clearly referred to economic globalization as a major trend in the world for the first time, and all subsequent Party congresses have adhered to this strategic judgment.

Behind this judgment is a basic fact: China has been the main beneficiary of economic globalization since the Third Plenary Session of the Eleventh CPC Central Committee. Economic globalization is conducive to China to attract and utilize foreign capital, and absorb world’s advanced management concepts and management methods in a discriminating manner; accelerating China's industrialization process and upgrading its industrial structure; China's in-depth participation in the international division of labor, giving play to its comparative advantages, and expanding overseas markets; and China to seize the opportunities brought about by the new technology revolution, give full play to the advantages of the latecomer, develop high-tech industries, and achieve leapfrog development of the economy. Since the Reform and Opening-up, especially since the beginning of the 21st century, China has fully utilized the opportunities brought about by economic globalization, given play to its strengths and avoided weaknesses and risks, developed and strengthened it, and improved its overall national strength and people’s living standards.