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Chapter 12-Globalization and The New Economy

Globalization refers to the increasing integration of economies and societies worldwide through trade, financial flows, foreign direct investment, and labor migration. In Asia, globalization has benefited countries like Japan, South Korea, and China through trade, technology transfer, and rapid economic growth. However, income inequality has also risen. Intra-regional trade in East and Southeast Asia has increased in importance. Capital inflows into Asian financial markets have increased rapidly in recent years, accompanied by currency appreciation and rising asset prices. Labor migration and remittances have also increased significantly in Asia, with both positive and negative economic and social effects. International organizations aim to promote peace, stability, and cooperation between countries on economic, social, and political issues.

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435 views21 pages

Chapter 12-Globalization and The New Economy

Globalization refers to the increasing integration of economies and societies worldwide through trade, financial flows, foreign direct investment, and labor migration. In Asia, globalization has benefited countries like Japan, South Korea, and China through trade, technology transfer, and rapid economic growth. However, income inequality has also risen. Intra-regional trade in East and Southeast Asia has increased in importance. Capital inflows into Asian financial markets have increased rapidly in recent years, accompanied by currency appreciation and rising asset prices. Labor migration and remittances have also increased significantly in Asia, with both positive and negative economic and social effects. International organizations aim to promote peace, stability, and cooperation between countries on economic, social, and political issues.

Uploaded by

JuMakMat Mac
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Economic

Development in Asia
Chapter 12 – Globalization and the
New Economy
What is Globalization?

• Refers to the ongoing economic, social and


political integration of economies around the
world that has taken place since World War I.
• ASEAN – Association of Southeast Asian
Nations
• APEC – Asia-Pacific Economic Cooperation
• EU – European Union
World Trends in Globalization
• International Trade
• Financial Flows
• Foreign Direct Investment (FDI) and
Multinational Enterprises (MNEs)
• Labor Migration
What is International Trade?
• Refers the exchange of capital, goods, and services
across international borders or territories. In most
countries, such trade represents a significant share
of gross domestic product.
Types of International Trade
• Export Trade,
• Import Trade
• Entrepot Trade
Advantages of International Trade
• Comparative Advantage
• Economies of Scale
• Competition
• Transfer of Technology
• More Job Creation
Disadvantage of International Trade
• Over-dependence
• Unfair to New Companies
• A threat to National Security
• Pressure on Natural Resources
Financial Flows
• Financial inflows that fall under the description of
short-term capital / financial flows include short-
term bank loans, portfolio investment, such as
equities, and government securities and (non-inter)
bank deposits.
Financial Planning
• Short Term
• Long Term
Foreign Direct Investment (FDI)
• Refers an investment made by a firm or individual
in one country into business interests located in
another country.
The types of Foreign Direct Investments
include:
• Foreign Direct Investment (FDI)
• Foreign Portfolio Investment (FPI)
• Foreign Institutional Investment (FII)
What is Multinational Enterprises?
• A multinational corporation or worldwide
enterprise is a corporate organization that owns or
controls production of goods or services in at least
one country other than its home country.
Multinational Enterprises Pro’s & Con’s
Pro’s Con’s
• Advanced Technology and • Workers and natural
Low Cost Product resources
• Spread Technology • Social Protection Fall
• Cheapest sources of labour • Manipulation
• Have a wider market • Global competition
• Economies of scale in • Foreign influence
marketing and distribution
Labor Migration
• Refers to migration for the main purpose of
employment. Labor migrants often work in the
informal sector and are usually exposed to abuses
resulting from xenophobia and racism.
Labor Migration Advantages &
Disadvantages
Advantages Disadvantages
• A richer and more • Increasing cost of
diverse culture services such as
•
health care and
Helps to reduce any
education
labour shortage
• Overcrowding
• Migrants are more
prepared to take on • Disagreements
low paid, low skilled between different
job religion and cultures
Asia and Globalization
• Globalization has been hugely beneficial to Asia.
Japan, South Korea, Taiwan, Malaysia, Singapore,
Hong Kong, Thailand, and China have reaped
lasting benefits from worldwide investment flows,
knowledge exchanges, and rapid economic
growth. ... However, the accompanying income
inequality is of a different hue than in Asia.
Trade in Asia
• However, in East and Southeast Asia intraregional
trade has grown in importance. Japan has assumed
a prominent role in Asian trade, and South Korea,
China, and Taiwan have also traded more heavily
with other Asian countries.
The Rapid Rise in Capital Inflows
• The recent surge in foreign capital inflows and
increasing asset prices in emerging East Asia1 are a
major concern for the region's economic managers.
Capital inflows into financial markets in particular
have been accompanied by exchange rate
appreciation, increases in liquidity, and a rise in
asset prices.
Labor Migration and Remittances in Asia
• Asia and the Pacific has a significant rise in
migration: about one in three migrants comes from
Asia according to the United Nations. Remittances
from migrants have provided foreign exchange
earnings for many countries in the region. ...
Migration and remittances have both positive and
negative effects.
Role of International Institutions
• The Role of International Organisations in World
Politics. ... It is widely believed that international
organizations should be responsible for the
maintenance of international peace and stability, be
this economic, social or political, and that they
should act in the interest of the international
community.

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