Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Economic Globalisation > Lecture 5 - China > Flashcards

Lecture 5 - China Flashcards

1
Q

What does China drive

A

Economic globalization (doesn’t just absorb FDI like other developing countries)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

China’s GDP in comparison to USA

A

China has 1/7th GDP of USA – yet is so influential within the economy
Still relatively poor like any other developing country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Who is Milton Friedman

A

Responsible for the ideology of the free market (and that it should be implemented at a global scale) he advised Ronald Raegan and Margaret Thatcher

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Who did Freidman try to influence

A

The leader of China when they were in social chaos + tried to enroll China into free market capitalism

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Who tried to influence the leader of China

A

Freidman

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What happened during the golden age of Fordism

A

China under Mao Zedong was insulated from global capitalist system

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

During the golden age of Fordism what did Mao aim to do

A

Emulate the Soviet Union.

Attempted industrialisation through ‘self reliance’ but generated serious domestic socioeconomic crises

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Employment during the golden age of Fordism

A
  • Close to a billion workers were kept out of the global labour market
  • Fordism-­‐Keynesianism thus developed parallel to the insulation of Soviet-­‐styled ‘socialist’ economies
  • Incidentally, both economic types encountered crises in the same period
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

When was the golden age of Fordism

A

1950s-60s (after WW2)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Communist leader of China

A

Zedong

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What did Zedong want

A

Wanted to organize the country around the soviet union – didn’t want other larger brands or countries influencing them and their economy (= self reliance)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Who was Zedong

A

(Communist leader) – powerful in driving communist movement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What used to be looted from China during the golden age of Fordism

A

Workers kept out – even by 1980s apple computers still produced in USA because China didn’t accept their production – didn’t want people working for TNCs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

How the two crises of Fordism-Keynesoanism and communism

A

Both Fordism-Keynesianism (profits began to drop in countries + they wanted more, needed to expand globally + not just keep production in certain countries) and communism encountered crisis together (social crisis – people are starving) – 2 crises are linked and they began to join with each other (soviet system and ex soviet system joined) – late 70s and 80s the global economy became more open, people looked for more places to progress to

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Deng quote on after 1978

A

“There is capitalism in socialism too”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What happened after 1978

A

Triggered the emergence of market-­‐based reforms and enhancement of international trade

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Who stated: “There is capitalism in socialism too”

A

Deng 1978

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What did Deng do

A

He enhanced international trade – China was once isolated from the global economy but this was changing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

5 main features of reform

A
  • Fiscal autonomy
  • Financial decentralisation
  • Marketisation
  • Spatial selectivity
  • Relaxation of population control
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What happened in 1984

A

Fiscal system detached from banking

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

When did the fiscal system detach from banking

A

1984

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What did decentralisation do

A
  • Offered more autonomy to local governments in revenue collection and spending
  • Offered significant potential to expand the extra-­‐budgetary fund (i.e. revenue not subject to control by the central government)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What did local banking institutions do

A

Replaced the central bank in many functions, primary of which is credit creation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What marked the beginning of state controlled financialisation

A

Central bank no longer monitoring firm activities ‘from above’

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What was marked by central banks no longer monitoring firm activities ‘from above’

A

The beginning of state controlled financialisation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Banking under the soviet system

A

Under the soviet system there was no financial banks – people didn’t use banks
There was only the fiscal system - government revenue collection system

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What kind of markets are banks required for

A

Market economies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

What do market economies need

A

Banks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

What is the basis of market economies

A

Credit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

When did banks start opening

A

1984

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Decentralisation of financial reforms

A

Governments given more incentives in revenue collection from taxes (local governments are allowed to operate like businesses – to stimulate enthusiasm)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

What is extra budgetary fund

A

Extra money on the side that doesn’t need to be reported (governments now feel empowered and want to drive growth further – incentivized to generate money)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Who is more willing in a trickle up method

A

More enthusiasm from government then the public will be more enthusiastic and willing to generate funds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

What exchange rate does China have today

A

Fixed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

What happened in the 80s in China

A
  • Local banking institutions were created, not just one central bank (peoples bank of china – used to be only bank)
  • They introduced credit creation – ability to generate credit, lending money (the economy has more money, an injection)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

What does a bank run mean

A

All try to get money out of banks due to lack of confidence in financial institutions yet banks do not hold enough hard money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

What is state controlled financialising

A

Introduction of financial tools to regulate everyday life (e.g. ATM cuts)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

What is marketisation

A

Introduction of ‘market-­‐like regulations’ in many realms of the economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

What launched in Shanghai

A

Stock markets launched in Shanghai and Shenzhen; banks encouraged to compete for loans; state-­‐owned companies restructured (e.g. CNOOC)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

When did China join the WTO

A

2001

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

What happened in 2001

A

China joined the WTO

42
Q

What happened after China joined the WTO

A

Marketisation gained speed

43
Q

Spatial selectivity of China - what were set up

A

Reforms first implemented along five Special Economic Zones in southeastern China in the 1980s

44
Q

FDI in China

A

Foreign capital inflows expanded northwards in the 1990s, then nationwide

45
Q

What happened until 1978

A

Private buying and selling (done by individuals) was not allowed – extremity of Chinese socialism

46
Q

Until when was private buying and selling now allowed in China

A

Until 1978 private buying and selling (done by individuals) was not allowed – extremity of Chinese socialism

47
Q

What happened after 1978

A

Small scale private transactions were allowed (no private demand or supply)

48
Q

When were stock markets in China launched

A

1987

49
Q

What happened in 1987

A

Stock markets in China were launched

50
Q

How many stock markets are there in China

A

2 - which banks compete over

51
Q

What happens if banks are in crisis

A

They just ask for money from Beijing

52
Q

When did GDP in China dramatically grow

A

After 2001

53
Q

What happened after 2001

A

GDP grew in China dramatically

54
Q

What companies are allowed into the SEZs

A

Only state approved ones

55
Q

Were the pattern of SEZ development logical

A

Not an even geographical process – was gradual: along the coast and then northwards

56
Q

Development even or not in China

A

Still very uneven development (therefore still considered a developing country)

57
Q

China and production today

A

Today key cities in China are powerhouses of production and encourage people to migrate

58
Q

Area of development within China - example

A

Shenzhen 1982-2012

59
Q

Area of development within China - how has Shenzhen changes

A

1982 - was flat, under construction, not developed

2012 - developed due to the opening up to the global market

60
Q

Area of development within China - how many people live in Shenzhen

A

14 million

61
Q

Area of development - what was Shenzhen the capital of

A

The IT capital of China

62
Q

What happened before 1978 in China to population movement

A

Living in China and you are a rural citizen, you aren’t allowed to leave your own village (rural migration didn’t occur)

63
Q

When weren’t you allowed to leave your own village (China)

A

1978

64
Q

Slums China 1978

A

No slums in China because not allowed to enter cities – geography was destiny
A form of internal colonialism?

65
Q

What happened after 1978 to population movement

A
  • From central provinces to the coastal provinces
  • Relaxation of migration
  • Today still many restrictions
  • Rural migrants have no right to be in the cities – today – but they can move
66
Q

China as the ‘world’s factory’

A

Massive relocation of low value-­‐ added industries into interior China

67
Q

Issue with coastal areas being developed

A

Internal areas weren’t

68
Q

Nation-states involvement in manufacturing

A

Encourages firms to move around internally

69
Q

How firms reacted to the development of coastal areas

A

-Countries competed for the low cost, intensive labor production
-Firms had to be willing to move
Item production within
-China increased

70
Q

How did China create value in manufacturing

A

Country started making higher value added products e.g. mobile screens

71
Q

What did the state do to make China more competitive

A

The government created a time space compression project (reduce the sense of distance between countries) through a railway (used to have to go through coastal areas) - things are taken to Europe via rail in order to compete with other states

72
Q

What kind of growth does China have

A

Export led growth

73
Q

Is the railway in China profitable

A

Railway wont make money, it will lose money as no people want to get on the train for 2 weeks when they can fly – had to be subsidised

74
Q

What policies were created to help competitiveness and uneven development

A

Massive state-led infrastructural investments in interior provinces to attract & retain cost-sensitive investors

75
Q

What do coastal provinces now aim to attract

A

Investments in higher-order manufacturing and services

76
Q

FDI in China - when did it decrease

A

Decreases due to 2008 financial crisis in US but made it into a global crisis

77
Q

When was there a surplus of investment

A

2007/2008

78
Q

What happened in 2007/2008

A

There was a surplus of investment into China

79
Q

Inflows and outflows of China

A

Today outflows > inflows (net exporter of capital)

80
Q

Places in a similar situation to China

A

Vietnam + India in a similar situation but they are not able to do the same as China - why does China have the money to do this?

81
Q

China’s currency

A

RMB or yuan (also used outside of China)

82
Q

How are dollars converted to RMB

A

At fixed rate set by Chinese central bank

83
Q

Why is there a growing demand for RMB

A

More trade and FDI, there is growing demand for RMB, which should increase value of RMB versus the dollar

84
Q

Naturally what should the Chinese XR be

A

Lower

85
Q

Impact of increased value of RMB versus the dollar

A

China as a result is more expensive – don’t want to buy Chinese goods (therefore the currency isn’t widely used outside of China)

86
Q

Inflation history of China

A

Hyperinflation

87
Q

Why is there hyperinflation in China

A

Chinese businesses would rather be payed in dollars

88
Q

Where do dollars go in China

A

Chinese central bank is very powerful – all the US dollars go to here and then are exchanged into RMB/yuan (they hold many US dollars in the bank + are used as reserves)

89
Q

Importance of the dollar in China

A
  • China is heavily dependent on the US dollar in order for their daily lives to function (also as their currency isn’t accepted in other places)
  • They wanted to increase the value of the US dollars they were holding
90
Q

How much money going into China is dollars

A

2/3rds

91
Q

Chinese people access to dollars

A

Low amount of access that the individual person is allowed access to

92
Q

US government fiscal status

A

Deficit - they need to borrow dollars from overseas e.g. China but after the 2008 crisis they thought the US was too risky to lend to

93
Q

Rather than lend their money to other countries what does the Chinese state do with the money

A

Rather than lend their money to other countries they decided to lend it to the state owned corporations (why Chinese state owned corporations spend a lot) – can obtain loans in Chinese currencies easily as the other countries need dollars

94
Q

Dollars currently in China

A

The more China is integrated in the global economy, the more firms want to locate their and put their money into China
Yet China itself has absolute poverty in some places
Almost contradictory

95
Q

What happened after the 2007-8 financial crisis

A

The Chinese central state sprung into life

96
Q

How did the Chinese central state spring into life following the 2007-8 financial crisis

A

Launched a massive ‘Go Abroad’ investment campaign, with a view to maximize the current value of its dollar holdings

97
Q

What does the ‘Go Abroad’ campaign explain

A

Why China, which still has a large poor population, is now (paradoxically) the largest global exporter of (dollar-­denominated) capital

98
Q

Issues with state-driven global investments

A
  • Foreign reserves cannot be targeted at solving (multiplying) domestic problems without causing inflation
  • Chinese state taking immense risks (& hence contributing to instability in the global economy) through re-investing dollar reserves globally – what if the investments fail?
99
Q

What does China now want to do with their foreign reserves

A

Spend them

100
Q

What are Chinese firms encouraged to do

A

Take risks (they often lose money)

101
Q

Implications of China’s ‘centrally-managed capitalism’

A
  • A unique blend of organized and disorganized capitalism
  • The Chinese central state has not disappeared
  • Its role has been re-­‐ emphasized as a result of globalizing tendencies
  • A new ‘variety of capitalism’?
102
Q

What is hyper-globalisation

A

Exponential increase in the international trade

Economic Globalisation (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions