Globalisation and Its Impact

Globalization has impacted new orders of economy, politics and socio-culture in various parts of the world, and in different scales. As a contrast, China presents a unique response to globalization, in that it has created an ‘alternative to globalization’. The classical assumptions regarding globalization are seen in the Western nations. In China, instead of these classical assumptions, a different approach to globalization is seen, both in the material and cultural sense. The government too has played an important role in this respect. In particular, the rural areas’ response to globalization is interesting in the Chinese context. In this chapter, the existing research is analysed to understand the key concepts, ideas and theories involved in this research.

Globalization as a contested field

Globalization as a term and a phenomenon, is difficult to define. It is used in so many different contexts and by so many different people, that is is hard to find a definition that can hold universal values of globalization within itself (Kellner, 1998). Some scholars have nevertheless attempted to define globalization as the phenomenon where ‘local happenings are shaped by events occurring many miles away and vice versa’ (Giddens, 1990, p.64), ‘the compression of time and space’ (Harvey, 1989) ; and ‘a complex range of processes driven by a mixture of political and economic influences’ (Steger, 2013). If one considers the seminal work of Fukuyama and Huntington, it is understood that they both considered globalisation to be one sided westernisation (Zhou, 2013). From a purely Western point of view, globalization has meant for a large part the dominance of the capitalist economic system (Kellner, 1998). The problem with this view point is that it is so difficult to fit into it, the experiences of countries like China, which cannot be defined as capitalist states, but which have a rich experience with globalization that is evident in the political, economic, social and cultural changes that can be witnessed here. Perhaps, the answer to that problem is that globalization should not be seen in the context of a phenomenon that is bringing greater homogeneity, rather it should be seen as a phenomenon, which is ‘generating diversity and heterogeneity through increased hybridisation’ (Kellner, 1998, p. 23). PAGE 14 Massey (2005) has posited that the world is not totally globalized, and she uses spatial arguments to further her point. Similarly, Hirst and Thompson (2002) argue that the world economy is not a truly global phenomenon, but one centred on Europe, eastern Asia and North America. On the other hand, several critics have pointed out that this is not true and the stated position is due to the overly high standards that the economy has to meet in order to be considered as ‘fully globalized’ (Held & McGrew, 2007). In these arguments and counter-arguments, one sees the role of spatial considerations in deciding whether a country is globalized or not. China’s interaction with globalization is not a new phenomenon. In fact, even during the early dynasties, there was interaction between China and European states. Even in the modern period, it is seen that in 1840 Zhejiang released overseas trade restrictions (Shengenn at al, 2014). Capitalism, which has been touted as one of the most important indicators of economic success in Western nations, is not a stranger to China as well. Although, at present time, China is criticised for not being capitalist, the fact is that the Chinese have a strong capitalist tradition, honed through centuries, much before the Industrial Revolution in Europe (Nolan, 2004, p.16). Regions like Zhejiang experienced the seeds of capitalism during the Ming Dynasty in the 14th century (Shengenn et al, 2014). Zhou (2013, p.264) points out that the interrelationship between China and globalisation is twofold. First, China’s rise has had a profound and consistent impact on the international community. Second, China’s own development and rise are impacted by globalisation. Zhou (2013) further posits that China’s economic development relies on science, technology, trade and foreign investment and in fact, without the international support, China’s economic development will be thwarted.

Economic and technological linkages

Globalization had meant for many countries, that there would be restructuring of existing enterprises. This is particularly true for communist or socialist regimes. In China, this was not the case. Stiglizt (2015) writes that China prioritised competition, new enterprises and jobs, over privatisation and restructuring existing enterprises. China understood that social stability could only be sustained if massive PAGE 14 unemployment was avoided (Stiglizt, 2015). This points at a significant variation in approach that China has taken as compared with many other countries. Wu (2016) sees globalization as a double edged sword for Chinese workers. He argues that while globalization has brought more opportunities for the Chinese employees, allowing them to earn in foreign currency and has reduced unemployment in China, it has also put them in a vulnerable and marginalised position when they work overseas (Wu, 2016, p.138). Specifically, Wu shows the incomplete establishment and regulation of overseas workers market, which is to blame for the problems faced. Thus Wu attempts to show the darker side of globalization for overseas workers who may experience isolation, vulnerability and marginalization in their work environment in foreign countries. Guthrie (2012) asks an important question as to the global and local processes that have been employed over three or more decades, to bring China to the point where it stands today - as a superpower. Like Stiglizt (2015), Guthrie too identifies a gradual shift in Chinese policy towards liberalization. Predominantly, Guthrie (2012) credits globalization and its local application in China.

Political and ideological linkages

China has chosen to adopt a gradualist policy (Stiglizt, 2015). China was able to procure foreign direct investment due to its political stability. Beginning 1978, China has continued to attract foreign direct investment due to the business friendly environment it presented as it was politically stable. Moreover, it provided low labour costs and there was very low probability of strikes (Nolan, 2012, p.11). Clearly, China’s political and ideological principles did not come in the way of foreign investment, rather they fostered and strengthened foreign investment.

Socio-cultural linkages

Stiglitz (2015) points out that China has maintained a very balanced outlook towards globalization from a socio-cultural perspective. For China, it was important that liberalisation did not displace resources, rather, China ensured that where resources were displaced, these were redeployed to more efficient uses and did not become unemployed (Stiglitz, 2015). PAGE 14 Liu and Tao (2012) have explored the interrelationship between globalization and linguistic trends in China. They argue that globalization places several challenges, including: challenges imposed by global English from outside world; the dynamics between the national and the local as represented by the dominance of the national language; and the preservation of the collective identity of Chineseness due to the ascendant status of Chinese language in the world (Liu and Tao, 2012). It is also important to remember that the Chinese society is traditionally Confucian, whereas globalisation forces a diverse culture on the Chinese society (Zhou, 2013). An example of this can be seen in what sociologists tend to term as ‘McDonaldisation of society’ (Ritzer, 2014). McDonaldization has implications for the traditional society and not just in terms of the food culture, as McDonald’s is seen as selling a cultural experience (American culture), rather than just food (Gamble, 2009). Ritzer argued that workers are unable to chart their own growth prospects, where they are employed in what is called as McJobs, which are seen as deskilled in nature. Gamble (2009) studied the perceptions of workers in such jobs and found that such workers had low expectations of future growth and employability in other companies.

Neo-liberalism

A significant discussion on political globalization is seen in the issue of ideology. Scholars have noticed that the contemporary global development industry is currently dominated by an ideology known as ‘neoliberalism’, which has become the predominate approach to thinking about and practising global development today (Power, 2003; Harvey, 2006). Neoliberalism, as a theory of political economic practices, proposes that the most advanced status of human wellbeing can be achieved by liberating entrepreneurial freedoms and skills of each individual within an institutional framework characterized by strong private property rights, free markets, and free trade. Along with this, the state has been asked to withdraw from the market as well as other areas of social provision. Sparke notes that there are some fundamental economic liberalization policies in neoliberalism, such as free trade, privatization, deregulation, austerity, reducing union power and so on (Sparke, 2013). However, not all assumptions are suitable or workable for different regions. Massey criticizes that globalization, along with its PAGE 14 ‘engine’ neoliberalism, is aspatial, which ignore the differences and diversity among regions. These representations also depict liberalist globalization as the suitable and inevitable methods for every country (Massey, 2005). But in a global scale, hegemony exists in terms of pushing neoliberal mode. As any kind of ideology, neo-liberalism, nevertheless, is not without its critics. Empirically, countries taken the stronger neoliberal path had undergone a proven economic stagnation in 1980s (Harvey, 2006). Moreover, it has been criticized that has impelled the geographical uneven development through increasing competitive pressures and social inequality, which will be discussed further later. However, neo- liberalism, along with those representations of it such as developed, advanced, fortunate and free, still occupied most of the countries and cons of it have been treat as an unfortunate mere by-product. As Harvey notes, ‘It has been part of the genius of neoliberal theory to provide a benevolent mask full of wonderful-sounding words like freedom, liberty, choice, and rights, to hide the grim realities of the restoration or reconstitution of naked class power, locally as well as transnationally, but most particularly in the main financial centres of global capitalism’ (Harvey, 2006:119). But apparently, neo-liberalism, which proposes set the power of market free, strongly promotes the expanding of globalization.

Anti-globalization

The anti-globalization stance focusses on the adverse effects of globalization on the environment, destruction of local traditions through homogenisation of culture and life and the dominance of richer nations over the poorer nations. However, it is also argued that globalization is not really the most important factor in raising inequality (Shengenn et al, 2014). Inequality in China is less in the more globally exposed global areas than in the interior areas (Shengenn et al, 2014). Environmental concerns are also important arguments for the anti-globalists. Shapiro (2016) points out that globalization has pushed China into exploiting its natural resources, be it timber, fossil fuels, wild life or minerals, leading to environmental degradation. Foreign direct investment in China is increasing and more and more enterprises are being created to meet international demands, putting a pressure on China’s natural resources (Shapiro, 2016). Jensen and Weston (2007) argue that PAGE 14 anti-globalisation movement has broken down barriers between environmentalists, human rights activists and labour organisations, bringing these different movements under the same umbrella. For the Chinese rural population, which sees itself negatively affected by globalisation, these arguments are especially relevant. It is also pertinent to mention here that in China, environmental activists need to work within the parameters approved by the Chinese government and this means that environmental arguments cannot be mixed with human rights concerns, as the latter are by and large not encouraged by the Chinese government (Jensen and Weston, 2007). Therefore, in anti-globalisation also, the Chinese stance would be different from that taken by their counterparts in other parts of the world. Therefore, the theoretical dimensions which allow anti-globalisation to make arguments on the basis of environment, human rights and labour rights, would not apply to China. The impact of this on the rural population of China is great. It is seen that migration to cities for jobs is not supported by raise in wages, or may even lead to denial of social security under the hokou system. This bypasses basic labour rights recognised in other countries. In China, protest on the basis of human rights violations of the rural migrants, will be not allowed, and that premise is therefore irrelevant in the anti- globalisation context.

Globalization in China - National scale

The role of the government

Western scholarship has mostly focused on the government role in China’s market and economy, predicted that because China has not adopted a Western style free market economy, where the role of the government is minimal, China is bound to fail or falter. Some have even predicted the collapse of Chinese economy in coming time (Chang, 2001). Guthrie (2012) does not agree with this proposition. He argues that it is precisely the Chinese government policies and the participation of the state in economic process, that has led to the economic reform of China (Guthrie, 2012). Unlike other countries, where the path of globalization was natural, in China, globalization has been largely undertaken by the government. Consequently, the trajectory of globalization in China can be traced through the government policies and plans undertaken over the years. PAGE 14 In the 1960s ‘Great Leap Forward’ was conceived by Mao Tse Tung as China’s special brand of socialism (Sharma, 2009, p.47). The most important government policy in the context of globalisation in the 1970s was undertaken by Deng Xiaoping, who wanted to rebuild the economy, and to that end he applied the ‘open and reform’ policy, which broke the system of planned economy, and turned China into a market-orientated economy. . The ‘open and reform Policy’, which Deng Xiaoping and China’s reformist leadership launched in December 1978, had been recognized as the beacon of China’s globalization process (Perkins, 1991; Howell, 1993). The government focussed on specific areas in China, which received the impetus of globalization process. For instance, for the setting up of the first Special Economic Zones (SEZs) in China, the eastern coastal provinces of Guangdong and Fujian, were chosen because of their inherent with geographic advantages, including the proximity to Hong Kong and Taiwan (Kwok, 1986). After the success of special economic zones, China’s government set up more open zones in eastern coastal areas in 1985. The layout of ‘special economic zones-costal open zones-inland’ evolved gradually. In 1979, the total amount of foreign trade was 35.5 billion dollars, only 9% of GDP. But in 2000, the year before China join the WTO, it had risen to 3927.3 billion dollars, 38% of GDP. Foreign direct investment (FDI) also grew from 9.2 billion dollars in 1983 to 407 billion dollars in 2000. China’s liberalisation saw the creation of new enterprises and jobs by monetary policy and financial institutions. China did not immediately privatize state enterprises but newer enterprises were created and given more importance, leading to the dwindling of importance to the state enterprises (Stiglizt, 2015). Wu (2016) mentions that the Chinese government strategy of ‘opening to the outside world’ also focussed on sending workers overseas, predominantly in the industries of textile, garments, construction and agriculture. The Chinese government’s steady control involving globalization can be concluded as three characters: ‘a visible hand’, ‘the rule maker’ and ‘rule breaker’. Adam Smith had described scattered houses and villages with limited options of commerce and a similar situation existed in China before the 1950s. Mao Tse Tung used public land ownership and rural corporative movement in an attempt to transform the rural economy, but these attempts were largely unsuccessful until the reforms urged and implemented by Deng in the late 1970s (Fortier and Wen, 2016). A visible hand, refers to a government that manipulates the economy and its capital PAGE 14 flows, or in other words, state capitalism (Woolridge, 2012). Ahrens (2010) argues that Americans have a tendency to overstate the role of free markets and understate the role of government in industry. In the case of China, it is seen that the visible hand is instrumental in encouraging innovation. China’s visible hand is seen from the fact that its government remains in control of domestic economy by having key sectors including transportation, communication, energy, agriculture under its control. Moreover some of the biggest companies in China, including in the area of banking, are State Owned Companies (SOEs), that is companies, where the state is the majority shareholder. The rule maker refers to government that is involved in legislation, or in other words, a country where instead of the legislator, legislation is by and large made by the executive. In China, the principle of separation of powers has been rejected in keeping with the Leninist philosophy that believes that the principle of separation of powers is an ingenious trick geared to undermine the principle of people’s sovereignty (Simon, Feng and Nelson, 2016, p.11). Chinese executive legislation is in stark contrast with the Western countries, where legislation is primarily a legislative function, although the executive may have certain delegated legislation powers. Consequently, most of the legislations that are related to foreign investment, company law or security law are executive in nature (Simon, Feng and Nelson, 2016). Although, the Chinese government is a Rule Maker, it can also at times be a ‘Rule Breaker’. This can also be attributed to the different perspectives that exist in China with respect to corruption, which is seen as a remnant of a feudal past or a by- product of the polluting influence of the Western civilisation (Zhou, 2013). In China, the term gundao, is used to signify government officials who use their power and position to run unauthorised businesses and make profits (Zhou, 2013, p.120). The judiciary is also seen to be corrupt, with rampant bribery, embezzlement and abuse of fair procedures of imparting justice (Zhou, 2013). An important consequence of this corruption in state institutions, is seen in the context of the present research. It has led to social upheaval, social unrest and fragile politics and it is seen most specifically in the land confiscation by corrupt officials for business men leading to riots by peasants and the poor (Zhou, 2013).

Globalization and its impact on the rural China

Rural and urban divide

There is a belief that globalization has tended to treat as ‘structurally irrelevant’, entire regions and countries around the world, and this is particularly true for rural areas in China, India, and Latin America (Axtmann, 1998, p.3). Therefore, the spatial aspects of globalization become relevant in the context of rural China. Several relevant questions that have social, economic, political or cultural contexts can be raised. The principal question relates to the impact of globalisation on China’s rural areas. Related questions can be raised with respect to the responses of China’s rural areas to contemporary globalisation and modernisation. Another important question relates to the influence of globalisation on China’s rurality. In other words, the daily lives of the villagers. There is literature that seeks to answer these questions specifically. Stiglizt (2015) for instance has written extensively on China’s globalisation. He argues that China has given a lot of importance and impetus to township and village public enterprises. It also ensured the limitation or reduction of social upheaval that is the result of industrialisation, through creation of industries in rural areas (Stiglizt, 2015). This ensured that there was no mass scale exodus to cities for jobs, as there was significant job creation in rural areas as well. While Stiglizt (2015) has found much to praise in the Chinese approach to globalization, Sanders, Chen and Cao (2016) are critical of the approach, on the basis of rural poverty. They argue that China shows increasing social polarity between the new millionaires and strong middle class in cities and poor people in the rural areas. One factor for this polarity is the institutional discrimination between towns and rural areas (Sanders, Chen and Cao, 2016). Another factor is the ‘invisibility of farmers’ in the cause of greater industrialization. It is argued that government policy was shaped to create newer enterprises and jobs in the cities and feed urban population as cheaply as possible. This led to the disproportionate rise in industrial output as compared to agricultural output. Another important measure that is pointed out is the government policy of hokou (household registration), which was interconnected with the labour allocation system and stopped rural dwellers from migrating to cities. It is important to mention here that the hokou system and the urban-rural divide began to break down once the economic reforms were undertaken. Although, the hokou system still survives today, it is not the only source PAGE 14 for Chinese rural dwellers to obtain their resources, goods and services and the market economy is an important source for Chinese people for these resources (Guthrie, 2012). Sanders et al (2016) argue that Chinese government has shown a distinct urban biased policy that has forced most rural dwellers to remain in rural areas. They state that the Chinese government has followed a policy of directing resources towards urban centres, depriving rural areas of the benefit of such resources (Sanders et al, 2016, p.107). Park also writes that the Communist regime segregated rural and urban areas and organised rural residents into collectives. Despite improving access to basic health care and education, the government in order to subsidize rapid industrialization, directed investments in a manner that discriminated against agriculture and rural areas, leading to sharp differences in the living standards of urban and rural residents (Park). Moreover, despite the economic reforms initiated in 1978, much of the earlier policies are yet to be reversed. In fact, the rural-urban divide reached its peak in 2005 (Park).

Rural to urban migration

An important indicator of market economy is the migration of people from China’s rural areas to urban areas. Despite the non accessibility of government benefits outside the hokou people are undertaking this migration to urban centres because of easy accessibility of jobs and money in China’s economically thriving urban centres (Guthrie, 2012). Sanders et al (2016) argue that the government has purposefully implemented a differential wage system for urban workers and rural migrants. There are lower wages for migrants and the social security benefits are minimal or non-existent. This acts as a deterrent for migration from rural areas to urban centres of economic activity (Sanders et al, 2016).

Globalisation: Impact on rural population and responses of rural population

Liu and Tao (2012) have written on the linguistic challenges faced by Chinese people in general and those living in rural areas in particular, due to globalisation and the PAGE 14 impact of English. They argue that increasing nationalisation of Mandarin and influence of English is impacting the local dialects and regional languages in China. Zhao (2014) note the dualistic nature of the Chinese economy with reference to the urban and rural areas. The urban centres of China are characterised by better social services and social security, formal employment and higher salaries (Zhao, 2014). The impact of globalisation is also seen as on women in particular. Zhou (2013) writes that globalisation has increased the unemployment rates for women, and women constitute over 60 per cent of the total unemployment rate (p.62). Moreover, women are seen to be discriminated against in recruitment, pay, promotion and termination of employment. Globalisation has seen foreign direct investment in China, with the intention of reduction of costs and maximisation of profits for the foreign companies, if they undertake production in China (Zhou, 2013, p.63). This has led to female workers compromising on pay packages in order to obtain or retain employment. The situation is even worse for the female migrant workers, who are predominantly those, which have migrated from a rural area to an urban centre (Zhou, 2013). Thus, apart from the problems and challenges associated with migrating to a city, a female worker will have to compromise on the quality of work and wages, in order to sustain herself in the city. The problems are compounded by the Hokou system that ensures that the female migrant worker will not get any social security or government benefits in the city. These benefits include crucial benefits such as medical cover and insurance. There is also a significant rural-urban divide in education. The person would have an average of seven years formal schooling, whereas the urban counterpart would have eleven years of schooling (Shengenn et al, 2014). There is a huge disparity here of four years or more. Again, an average 19 per cent of Chinese urban population has had three or more years of college education compared to a dismal .24 per cent seen in the rural population (Shengenn et al, 2014). There are three areas where China’s model of globalisation differs from the Western countries’. These areas are: the control exercised by the Chinese government on economy (the visible hand), the existence of the State Owned Enterprises (SOEs) and the censorship by state and the almost absence of the freedom of speech, expression and press. China proves that globalisation does not have to conform to one idea or rather to the Western perceptions of globalisation and that there are alternative globalisation models. The impacts of globalisation and Chinese PAGE 14 perceptions of globalisation, are felt the most in the rural areas. There is a stark rural-urban divide in China, which the urban areas far outstripping rural areas in provision of better employment rates, wages, social security and welfare benefits, education rate and the general quality of life. One reason for this may be that the Chinese government has employed a somewhat biased policy of globalisation in the urban areas, because the thrust of globalisation is basically seen in the impetus to industrialisation.

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