Glamor Economics

Chapter 190

Chapter 24 The Wave of Globalization From which You Can’t Survive—Economic Integration
Section 1 The world is getting smaller and more connected - economic integration
LV store, a couple is talking.

The woman said: "Husband, how about I just buy this LV bag? Do you think my back looks good?"

The man said: "Honey, I think you have a good back, so you can buy this one. But I want to remind you, even if you lose the money in the bag, you can't lose the bag. This bag is very expensive!"

The woman said: "Husband, don't worry, I will remember your words. In case of robbers in the future, I will let the gangsters rob me, and I will not let the gangsters rob me of the bag!"

The conversation between the couple is hilarious.With the development of society, more and more world brands have entered China. Luxury goods such as Louis?Vuitton, Chanel, Armani, ordinary products such as Colgate, Olay, Pantene, more and more Chinese people are living a globalized life enjoying the convenience and comfort brought by foreign products, and they are also participating in the world in their own ways. the functioning of the economy.

Integration means combining parts into a whole.In the field of economics, integration first appeared in the study of business operations.Since the early 20s, integration has been widely used in the study of international economic activities to describe the integration of independent economic activities of multiple countries into a closely linked whole.The definition of economic integration was first proposed by the Dutch economist Ding Bogen in 50.He believes: "Economic integration is to eliminate the human factors that hinder the most efficient operation of the economy, and create the most suitable international economic structure through mutual coordination and unification."

It is precisely because of globalized transactions that people from all countries can produce their own most professional goods and services, and at the same time consume the most professional goods and services of other countries.Your hat might be from Vietnam, your glasses from Thailand, your coat from France, your tie from Italy, and your shoes from Brazil.The benefits of this international trade are obvious, and at the same time, economic data such as a country's exports, imports, exchange rates, and foreign exchange reserves have become increasingly important.For example, in the 20s, the average amount of goods and services exported by the United States was only 50%, but in 5, it tripled to 2000%.This shows that the United States is more and more involved in the world economy, and its influence on the world economy is also increasing.

Economic globalization is one of the important features of the contemporary world economy, and it is also an important trend in the development of the world economy.Under this trend, the world economy has increasingly become an indivisible organic whole.Its content mainly includes the following aspects:

1. Globalization of production.For example, the 450 million components needed for the Boeing airliner produced by the Boeing Company of the United States come from 6 large enterprises and 1500 small and medium-sized enterprises in 1.5 countries.What Boeing has accomplished is nothing more than the design of technology, the production of key components and the final assembly of products.According to statistics, currently 40% of the world's products are produced by multinational companies.

2. Trade globalization.The formation of the world market has gradually integrated the markets of various countries and greatly promoted the development of global trade.The scope of international trade continues to expand, the capacity of the world market is increasing, and the dependence of countries on the world market is also increasing.

3. Financial globalization.The financial lifelines of various countries are more closely linked with the international market.Rapidly expanding multinational banks and computer networks all over the world enable the flow of huge amounts of capital and huge financial derivatives around the world.

4. Invest in globalization.The scale of capital flow in international investment continued to expand. In 1995, the total foreign investment of developed countries reached 2.66 trillion US dollars, more than 1945 times that of 130.The direction of capital flow has changed from one-way to two-way. In the past, only developed countries exported capital, but now developing countries also export capital, including to developed countries.

5. Regional economic integration.Regional economic cooperation is increasingly strengthened.Regional economic organizations spread all over the world, such as the European Union, North American Free Trade Area and so on.Many regional groups have realized the free circulation of goods, capital, personnel and labor services, which enables the rational allocation of resources in the region, optimizes the combination of resources, realizes economies of scale, and improves economic benefits.

Economic globalization provides rare development opportunities for developing countries, which is conducive to attracting foreign capital and making up for the shortage of domestic construction funds; it is conducive to the introduction of advanced technology and equipment to achieve a leap in technological development; it is conducive to learning advanced management experience and cultivating high-quality management talents; it is conducive to exerting comparative advantages and opening up the international market.On the other hand, it will inevitably bring disadvantages and risks to developing countries.The economic and technological levels of developing countries are relatively backward. Not only do they face enormous pressure from the economic and technological advantages of developed countries, but they also face serious challenges to their national economic sovereignty and economic security.Because of this, Stiglitz, chief economist of the World Bank, compared the duality of globalization to "a double-edged sword".

[links to related words]

Economic globalization refers to the global organic economic whole formed through foreign trade, capital flow, technology transfer, provision of services, interdependence and interlinkage of world economic activities beyond national borders.Economic globalization is one of the important features of the contemporary world economy, and it is also an important trend in the development of the world economy.

A free trade area refers to a trade area composed of countries that have signed free trade agreements.Member countries are exempt from tariffs and other trade restrictions, but maintain their own tariffs and quotas for countries outside the zone.

A customs union refers to an alliance concluded by two or more countries in order to eliminate tariffs or various trade barriers between each other and establish a common external tariff.Free circulation and free competition of goods within the alliance.A customs union is a step further than a free trade area in terms of integration.

The common market refers to the free flow of production factors on the basis of a customs union, and the establishment of tariff, trade and market integration within the union.Its ultimate goal is to achieve complete economic union.

The ultimate development goal and the highest form of economic integration in the economic union.It requires its member states to establish a supranational management agency on the basis of realizing tariff, trade and market integration, to adopt the same position in international economic decision-making, to exercise a unified currency system and to establish a unified banking institution, and then in the economy Comprehensive economic integration in terms of finance, currency, tariffs, trade and markets.

(End of this chapter)