Globalization 3.0 and Beyond: What’s Next for China’s Economy?
Feb 05, 2013 By Trey Archer, eChinacities.com Comments (3) Add your comment
Thomas Friedman argues in “The World is Flat” that there have been three major stages of globalization. While globalization 1.0 (1492-1800) saw countries/militaries pave the way to a new global system and globalization 2.0 (1800-2000) witnessed the rise in big business interconnect peoples from all over, globalization 3.0, which is occurring right now, is primarily lead by the “flattening” of the world, a metaphor Friedman uses for the leveling of the commercial playing field wherein all competitors have an equal opportunity. Even though China struggled greatly during globalization 2.0, the country was able to carve a niche in the early stages of globalization 3.0, having prospered enormously from it. But what will China’s economy look like further in to globalization 3.0? Will it become the next world super power as some predict or will it fall into the doldrums of stagnation like neighboring Japan? While it’s nearly impossible to predict the future, we can look at contemporary trends and facts to help make an insightful projection.
The world is flat. Photo: newretailblog.com
Decline of foreign companies outsourcing to China
Thus far, a major theme of globalization 3.0 has been outsourcing—something that very quickly turned China into the manufacturing capital of the world. However, due to an increase in the Yuan’s value, drastic increases in domestic salaries and issues concerning product quality control, many prominent corporations like Apple and New Balance are starting to pull out of China, according to an article on chiefexecutive.net. In the case of New Balance and other apparel stores, it’s now much cheaper to manufacture in Bangladesh, Vietnam, Indonesia or Cambodia. And in the case of Apple, the company recently discovered that “total worldwide labor costs for the iPad was $33 of which only $8 represented...