China has increasingly globalized and integrated into the world economy since 1978. It is now the world's largest exporter, manufacturer, importer of raw materials, and holder of foreign exchange reserves. China has developed high-tech industries and uses special economic zones, trade agreements, and foreign investment to continue its economic growth and ensure access to resources and markets. However, China's rapid industrialization has also made it the largest emitter of carbon dioxide and present challenges in balancing economic needs with environmental protection.

1. China and Globalization
Nicolas FOUCRAS Phd
University TEC de Monterrey
nicolas.foucras@itesm.mx

2. • 1978: begins the transition to market economy and
started to draw FDI
• 1981: the First Special Economic Zone is opened; it
allows to connect with the global economy and to start
the industrial upgrading
Current panorama
• China has the world’s largest foreign exchange
reserves
• 1st exporter since 2014 followed by USA
• 1st creditor of the USA, Africa, LAC (directly or through
development banks)
• 1st producer of manufactured goods
• 1st exporter of manufactured goods
• 2nd importer of manufactured goods
• 1st importer of natural resources (oil, copper, cotton…)

3. Most important population however a
marked ageing is expected

4. Export Share for China and USA: China
overtook USA in 2014

5. China is importing raw materials from
all over the world

7. In 2006 China became the first responsible of the
world productions of carbon dioxide (CO2) followed
by the USA

9. Exponential growth of CO2 emissions during the last
decade while it is stabilizing in USA and EU or
decreasing

10. • It started to develop a high value-added industry (thanks to
Western and Japanese technological transfer): automobile,
satellites, trains, computers, cells, domestic appliances…
• The iternational weight of chinese MNFs is growing and they
are developing international value-chains (China’s FDI multiplied
by 3 between 2001 and 2013)
• It has started to outsource/subcontract low costs activities and
labor intensive in ASEAN countries => it can maintain its
competitiveness
– It has also transferred activities with important level of
pollution => it may commit itself to respect international
rules
• 5th country to produce FDI
• 600 million people have left “poverty” between 1981-2008
according to the WB (Tello 2010) => huge potential market first
for national firms

11. 1st producer of cars

12. Chinese investments (2005-2010)

13. FDI focused on the commodities

16. • 1st country in terms of savings
• National currency (RMB) is more and more used in
international trade => it gives more stability for the import of
commodities and energy supplies because it can pay in its own
currency
• 1st electricity and coal consumer
• 3rd reserves of coal
• 2nd oil consumer
• 1st buyer of gold => improve the international confidence in the
economy
• Very active for Foreign aid (Africa, Asia and then LAC):
– It appears as one of the biggest contributors
– It allows soft power to improve its political power
– It facilitates investments in natural resources exploitation

17. Important national saving rate

18. Use of currencies in the international economy:
growing participation of the Yuan

19. China is buying gold

20. Reserves of coal in the world:
China is the 3rd

22. Period 2000-2011
1. Ghana
2. Nigeria
3. Sudan
4. Ethiopia
5. Mauritania
6. Angola
7. Equatorial
Gnuinea
8. Zimbabwe
9. Cameroon
10. South Africa

23. • Regional activism and strategic alliances
• BRICS
• Asian Infrastructure Investment Bank (AIIB)
• ASEAN–China Free Trade Area (ACFTA)
• Regional Comprehensive Economic Partnership
Agreement (RCEP)
• Shanghai Cooperation Organization (SCO)
• Numerous FTAs
• China-CELAC summits
• China does not want a G2: It prefers G20 to be
able to be stronger against USA through alliances
with other countries

24. • It seeks to ensure its food security (buying or leasing lands
everywhere but above all in Africa)
• It seeks to develop energy access and to ensure energy
security: Shanghai Cooperation Organization (SCO), FDI in
Africa and LAC, participation in regional banks and using
Foreign Aid
• It seeks to secure commercial routes to ease its
exports/imports (“String of Chinese Pearls”)
• It can count on a strong military force:
– 2.2 M soldiers
– 2nd biggest defense budget
– It is improving its projection capacity in the region

25. String of Pearls refers to
the network of Chinese
military and commercial
facilities with the
purpose to secure:
Exports of goods to EU
and USA and imports of
commodities
This network includes
• Several major maritime Straits
like Mandeb (connecting the Red
Sea with the Gulf of Aden),
Malacca (Mal.), Hormuz (Persian
Gulf and the Gulf of Oman), Suez
and Lombok (Ind.)
• China is investing and building
port infrastructures to ease its
export and imports in different
strategic points in Pakistan, Sri
Lanka, Bangladesh, the Maldives,
Somalia, Nigeria, Togo, Belgium,
Greece, USA and including the
huge project o build a new
channel in Nicaragua