Feeling the (Chinese) heat
July 8, 2007I remember a few years ago having to write an essay on the question “Has globalization gone too far?” It was one of those essays meant to exert the minds of LSE students on the controversy over globalisation: what is it about, is it good or bad, going too far from what/where, are governments run over by the process or are they still (maybe even too much?) in control?
Part of the exercise was of course to compare the current process with past economic integration processes. I remember having analysed in depth the pre-1914 era and compared it with today’s. I was never convinced by arguments that the world economy was really more integrated - or globalised – then than today. But I couldn’t pin it down to exactly why. My supervisor commented that I indeed had made a “sophisticated assessment” (quote) but that I needed to conclude with a clear statement on whether I find that today’s globalisation goes further than in the past. Had I had the graphic below - it is from the OECD’s latest bi-annual Economic Outlook - I would have had given a more courageous answer: today’s globalisation process might have big gaps (labour markets are less global than pre-1914, Africa is more sidelined from global financial and commercial flows than then), but it is in my view clearly much more intense. Not only because technology has allowed for a radically new global division of production, but because of the impact of the relatively sudden entry of half of humanity in Asia, and namely China’s 1.3 billion, into the global market. All this with a convergence process that spans a wider initial income gap. Judge for yourselves (please click on the picture):
A clearer picture is available on page 17 of this document.
All this to say what? Nothing, just chatting away in holiday mood…. The entire planet is feeling the heat of this high-voltage globalisation process. So here four random points: Read the rest of this entry »
