Causes & Consequences of Globalisation (Cambridge (CIE) A Level Economics): Revision Note

China's Integration into the Global Economy

The context

Before 1978, China was largely closed to the global economy. Mao-era central planning had isolated the country from international trade and investment.

The reform and opening up programme launched by Deng Xiaoping in 1978 began China's transformation into the world's largest manufacturing economy — and the single most significant case of globalisation in modern economic history.

Actions taken

• Creation of Special Economic Zones (starting with Shenzhen in 1980) offering foreign investors tax incentives and flexible regulation

• Progressive trade liberalisation, culminating in WTO accession in 2001

• Massive investment in ports, transport and energy infrastructure to support export-led growth

• Integration into global supply chains, particularly in electronics, textiles and machinery

Outcomes

• China became the world's largest exporter by the 2010s

• Over 800 million people lifted out of extreme poverty between 1978 and 2020 — the largest poverty reduction in human history

• GDP per capita rose from under US$200 in 1978 to over US$12,000 by 2022

• Rapid development also brought severe air and water pollution, rising inequality between coastal and inland regions, and growing trade tensions with major partners including the US and EU

The Chinese case illustrates both the scale of benefits globalisation can deliver and the tensions it creates — rapid development alongside environmental costs, inequality and trade disputes.

The strongest analytical point on globalisation is that consequences are unevenly distributed — both between countries and within countries. Strong responses identify specific winners and losers rather than treating globalisation as uniformly good or bad.

CIE mark schemes for globalisation essays reward the definition as flows of goods, services, capital and people between countries, with production processes increasingly subdivided across multiple countries. This precise wording is worth learning.

For evaluation, the two strongest critical points are uneven distribution of benefits (some countries and groups gain far more than others) and vulnerability to global shocks (interconnected economies transmit crises rapidly, as shown in 2008 and 2020).

Use country-specific examples: China and Vietnam for successful integration; commodity-dependent African economies and Latin American economies facing volatile capital flows for the risks. Avoid vague references to "developing countries".

For synoptic depth, link globalisation to MNCs, FDI and international trade theory. Globalisation is the overarching process; these are its main mechanisms.