What is the relation between economy and globalization? ---LImengchen

 Economic globalization is one of the most significant trends in the world today. It has profoundly changed the economic development models of countries and brought extensive and far-reaching impacts. While globalization drives economic growth and transformation, it also leads to unequal wealth distribution and the spread of economic risks. By analyzing the relationship between globalization and the economy, we can gain a more comprehensive understanding of this phenomenon and the opportunities and challenges it presents.

Globalization provides a powerful impetus for economic growth. The expansion of international trade allows countries to focus on industries where they hold comparative advantages, thereby enhancing production efficiency and maximizing economic benefits. At the same time, cross-border capital flows facilitate globalized investment. Multinational corporations can seek low-cost, high-efficiency production bases worldwide, bringing funds, technology, and employment opportunities to host countries. The transfer of technology is another highlight of globalization. Many nations have accelerated their economic development by introducing advanced technologies to achieve industrial upgrades. For example, East Asian countries have rapidly grown into manufacturing powerhouses by integrating into globalization, establishing significant positions in the global economic system.

At the same time, globalization has triggered profound economic structural transformations. The formation of global supply chains has assigned different roles to countries in the value chain. Developed countries often focus on high-value-added research and development, while developing countries take on important roles in production and assembly. This global division of labor has not only improved the overall efficiency of the global economy but also promoted industrialization and modernization in many developing countries. Furthermore, with the deepening of globalization, the proportion of service-based economies continues to rise. The internationalization of industries such as finance, logistics, and information technology has made services a new engine of economic growth for many nations.

However, while globalization promotes economic development, it also exacerbates wealth inequality. Between nations, some developing countries have achieved economic takeoff through globalization, such as the rise of East Asia. Yet, countries lacking resources or infrastructure have not benefited equally. Within nations, globalization has had a significant impact on low-skilled workers in developed countries. Many traditional industries have declined due to insufficient competitiveness, leading to job losses or income reductions for a large number of workers. In contrast, those with capital and technical expertise have reaped greater benefits from globalization. This unequal distribution of wealth has become a prominent issue in the globalization process.

In addition, globalization has made economic risks more likely to spread across borders. Financial crises and supply chain disruptions are two prominent examples. The 2008 global financial crisis, which originated from the U.S. subprime mortgage crisis, quickly spread to Europe and Asia, plunging the global economy into recession. In recent years, unexpected events such as the pandemic have further exposed the vulnerabilities of the global economic system through supply chain disruptions. While globalization enhances efficiency, it also increases interdependence among national economies, heightening the risks within the economic system.

Globalization is not just an economic phenomenon; it is also an integration of culture, society, and values. In the realm of consumption, globalization has led to the convergence of consumer patterns. Consumers can easily purchase goods from around the world, enabling the rapid rise of many global brands. At the same time, cultural products have achieved wide dissemination through globalization. Industries such as film and music not only enrich cultural experiences but also become new drivers of economic growth.

The deepening of economic globalization demands higher levels of global governance. To address the complex challenges brought by globalization, nations need to strengthen cooperation, establish rules, and resolve cross-border issues. International organizations like the World Trade Organization (WTO) have promoted fair competition by developing trade rules. Meanwhile, the resource consumption and environmental problems associated with globalization require countries to work together, especially in areas such as climate change and sustainable development, where international collaboration is essential.

The relationship between the economy and globalization is both complex and interconnected. Globalization offers unprecedented opportunities for economic development but also brings challenges such as inequality, the spread of risks, and environmental concerns. In the future, countries need to enjoy the benefits of globalization while addressing its negative impacts through enhanced international cooperation, promoting more inclusive and sustainable development. This is not only a response to current globalization trends but also a key to ensuring the future prosperity and stability of the global economy.