Globalisation in Asia

Acceleration in globalisation:

  • One reason for the acceleration of globalisation in recent decades has been changing government attitudes in regions outside Europe and North America.
  • Asia’s three most populated countries - China, India and Indonesia - have all embraced global markets as a means of meeting economic development goals.
  • In all three cases the establishment of special economic zones (SEZs), government subsidies and changing attitudes to free market globalisation have played important roles.

Indonesia:

  • In the late 1960s, President Suharto turned his back on communism and opened up Indonesia’s markets.
  • American and European TNC’s met with Suharto’s advisors and collectively built an attractive new legal and economic framework for foreign investors.
  • Indonesia immediately became a popular offshoring location for TNCs.
  • World Bank lending funded the speed modernisation of its roads, power supplies and ports.
  • Human rights campaigners expressed concern that capital city Jakarta’s export zone had become a low tax haven for sweat shop manufacturing.

India:

  • In 1991, sweeping financial reforms took place in India.
  • Since then Indian TNCs have grown in size and influence.
  • Until 2013, foreign retailers could only gain a presence on India’s own high streets by agreeing to form a partnership with local Indian businesses.
  • As a result McDonald’s restaurants in North India and East India are a joint venture between Vikram Bakshi and the McDonald’s corporation.
  • India’s high street rules have deterred many other foreign retailers such as IKEA.
  • 90% of India’s shops are still family owned.

China and its 1978 Open Door policy;

  • Before 1978, China was a poor and politically isolated country.
  • Under the communist leadership of Chairman Mao Zedong, millions died from famine. Most people lived in poverty in rural areas.
  • This changed in 1978 when Deng Xiaoping began to embrace globalisation with the radical ‘open door’ policy whilst the country remained under one-party authoritarian rule.
  • Strict rules on the number of children people could have were also introduced.
  • Over the next 30 years around 300 million left rural areas in search of a better life in the city.
  • Soon there will be 200 Chinese cities with more than 1 million inhabitants or more. Many are new, rapidly built instant cities.
  • Initially, urbanisation fuelled the growth of the low wage factories that gave China the nickname ‘workshop of the world’.
  • The worlds largest TNCs were quick to establish branch plants with Chinese owned factories in newly establishes SEZs.