Blog4:What is the relation between economy and globalization? HUANG QIHAO

 1. Interdependence and mutual promotion between economy and globalization

Economic development and globalization are mutually dependent and mutually promoting processes. Globalization promotes economic growth in various countries by opening up markets, liberalizing trade, and facilitating capital flows. At the same time, the deepening mutual dependence among countries accelerates the process of globalization. 

Korean Perspective: Korea is one of the beneficiaries of globalization, especially in the 1980s and 1990s, when Korea rapidly rose to prominence through global trade, technology importation, and capital flow, becoming an important player in the global economy. Large Korean corporations such as Samsung, LG, and Hyundai expanded their markets and optimized their supply chains through globalization, driving rapid economic growth for the country. As a foreign student, I can mention how Korea aligned itself with globalization through export-oriented economic policies, thereby creating the "Han River Miracle" economic miracle.

2. Globalization of the Industrial Chain

The economic development under globalization is reflected in the global distribution of industrial chains. Different countries or regions specialize in different links of the industrial chain based on their comparative advantages. For example, East Asian countries (including Korea and China) have a clear advantage in manufacturing, while Western countries are more focused on research and development of technology and financial services. 

The Korean Perspective: The success of the Korean economy has been partly due to the industrial division of labor under globalization. Korean companies have played dual roles in globalization, such as manufacturing and R&D, for example, Samsung not only sells electronic products globally but also has factories and R&D centers overseas, participating in various links of the global supply chain. At the same time, Korea also relies on the global market to import raw materials and technologies, fully utilizing the resource complementarity brought about by globalization. As a foreign student, I can combine this point to explore how Korea has enhanced its competitiveness through participation in the global supply chain in the context of globalization.

3. Free Trade and Economic Growth

Globalization has promoted international free trade, and trade barriers between countries have gradually decreased, making the flow of goods, capital, information, and labor globally more free. This has provided huge opportunities for economic development, especially for those countries that participate in global trade. 

Korean Perspective: Korea has strengthened its economic ties with countries around the world through its participation in multiple free trade agreements (FTAs). For example, Korea has signed free trade agreements with countries such as China, the United States, and the European Union, which not only boosted Korean exports but also attracted foreign investment and promoted further economic development in the country. As a student, I can analyze how Korea has used active participation in free trade agreements to drive economic growth in the context of globalization.

4. Impact of Globalization on Small and Medium-sized Enterprises and Labor Market

Globalization not only affects large enterprises but also has profound impacts on small and medium-sized enterprises and the labor market. The competitive pressure and technological changes brought by globalization have driven small and medium-sized enterprises to continuously innovate to meet the needs of the global market. At the same time, globalization has also brought about changes in the labor market, requiring workers to have higher skill levels. 

The Korean Perspective: In Korea, as the process of globalization deepens, the government has also implemented numerous policies to support small and medium-sized enterprises (SMEs) "going out" and help them gain competitiveness in the international market. Additionally, the labor market in Korea has become increasingly in need of highly skilled talent with a global perspective and international experience as a result of globalization. As a Chinese student, I can discuss the policies and market changes I encountered during my time in Korea, such as how to view the impact of Korea's foreign trade policies on local SMEs, and the demand for internationally-minded talent in the labor market under the backdrop of globalization.

5. The Integration of Global Financial Markets

Economic globalization is also reflected in the integration of global financial markets. With the globalization of capital flows, the financial markets of various countries are interconnected, and the economic crisis or financial fluctuations of one country often have a chain reaction on the global scale. 

The Korean Perspective: South Korea's experience during the 1997 Asian Financial Crisis is a typical case under the globalized financial system. At that time, the tight liquidity in the global capital market caused a severe blow to the Korean economy, forcing South Korea to carry out economic structural adjustment and reform. However, by attracting foreign investment and strengthening cooperation with international financial institutions, South Korea quickly recovered after the crisis. As a foreign student, I can combine this historical event to discuss how global financial markets affect the Korean economy and further analyze how South Korea stabilized its financial system through international cooperation.

6. Economic Challenges of Globalization

While globalization brings opportunities for economic development, it also brings challenges. Globalization intensifies competition among countries, especially in the low-end manufacturing sector, where the wage gap between developing and developed countries leads to outsourcing of industries and job loss. Furthermore, globalization also leads to the widening of income inequality, making it difficult for some countries and regions' disadvantaged groups to benefit from globalization. 

The Korean Perspective: In Korea, globalization has brought about some social and economic inequalities. While large corporations have benefited greatly from globalization, small and medium-sized enterprises and low-income groups face greater pressure to survive. Meanwhile, young people in Korea are facing an increasingly competitive job market, especially in the context of the industrial structure adjustment caused by globalization. As a foreign student, I can analyze how the Korean government and enterprises are responding to the economic challenges brought about by globalization and propose solutions.