How Is Globalization Affecting China's Poverty?

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However, China hoped to not create too much pressure on existing industrial structures as such an action would have forced many local enterprises to close without doing much to encourage new investments in industrial activities. Employment and economic growth would have suffered, threatening social stability of China. Therefore, China welcomed foreign companies with the objective of fostering domestic facilities. A number of policies were used by China to ensure that foreign technology would transfer to them and that domestic industries would emerge. Early on, they relied predominantly on state-owned national champions. Later, the government used a variety of incentives to encourage joint ventures with domestic firms and foreign companies.…show more content…
One of its impact is that less developed countries have outsourced manufacturing and white collar jobs, which means less jobs for their people. This has happened because manufacturing work is outsourced to developing nations like China where the cost of manufacturing goods and wages are lower. Furthermore, Malaysia had also outsourced jobs in food and beverages industry other than manufacturing, where people from Bangladesh, Indonesia, Vietnam and elsewhere tend to work for lower wages. This in turn has led to increased poverty in these countries due to limited job opportunities. White collar job like programmers, scientists , accountants and other professionals have lost their jobs due to outsourcing to cheaper locations like India although the same skills are held by them. Usually, the jobs are outsourced to developing countries with the fastest growth rate as benefited from globalization. The competition in the job market due to globalization eventually leads to job insecurity. Earlier people tend to have stable, permanent jobs, but now people live in nonstop pressure of losing their jobs due to competition from other countries. Besides, the ability to transmit information rapidly through internet causes…show more content…
Many foreign companies and countries are using the poverty of other countries to their own advantage. One of the clear example shown is that most foreign firms pay their workers more than the average of the poor country, although what the workers are paid is many times lower than the average wage in the home countries. While the poor companies are creating job opportunities, the foreign companies are creating jobs faster, leading to higher poverty levels in the country due to the fact that the profits earned by the foreign companies are not invested back into the country where the companies are located, but rather sent back to the main company. Besides, most foreign businesses also spend heavily on research and development in their own country where they are located; however, the benefits of the new, more advanced products are again reaped in the home country instead of distributing to the other countries. Research has found out that the foreign investments in the United States have gone from one hundred million to nearly three trillion dollars.(Foreign Direct Investment, 2014) While the economy of the United States has developed into one of the strongest in the world, many third world countries were forced deeper into poverty due to the wealthier countries’ inconsideration. In short, many countries’ economies

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