Disadvantages Of Economic Globalization

Introduction

Economic globalization phenomenon has gradually come into people’s eyesight since the 1980s. According to Gao Shangquan’s article (2000), the economic globalization means that the world economy has become interdependent, cross-border trade and the spread of goods, services, international flows of capital and technology become more efficient. The progress of science and technology is the main driving force of economic globalization. It is undeniable that globalization can help the world economy becomes more prosperous. The promoters of globalization think it has brought more opportunities and development for the world; the advantages of the globalization are far outweighing the disadvantages. However, the globalization is a double-edge

The globalization of markets, globalization of production and technological progress are three main reasons to promote the globalization (Edgar, n.d.). The globalization of markets is different independent national markets are merged into a global market (Hill, Cronk, & Wickramasekera, 2010). The formation of market globalization led many countries to open their markets and reduce tariffs and trade barriers, so that the product can flow easer in the world. For example, China had reduce tariffs on imported consumer goods earlier this year and the Chinese government has signed the free-trade agreements with Australia, the Chinese government want to promote domestic demand through these policies (Duncan, 2015). The technological progress is an indispensable part for the economy globalization. Because the rapid development of technological in information dissemination and communication, it not only reduce the cost of commodity circulation and create more export opportunities, but also exploit some new products and service in the world markets (Hibbert, 2000). The improvement of technology creates the conditions for the globalization of production, which is allowed to produce many goods in different countries. Therefore, some developing countries can benefit from significant amount of foreign direct investment form develop countries. The foreign company can corporate with local company to develop product and those multinational companies can exploit local markets. Thus, it can be seen the globalization of market and the globalization of production are two major components of economy