The dawn of the 21st century signalled the rise of China’s economic and sociopolitical power. One of the most important developments in the world’s economy is the advancement to prominence of China, earning it a powerful reputation in the trade.
Their economic strength is best displayed by how much investments they’ve poured over developing countries. It is not a secret that China is currently dominating the global market in terms of foreign investments, beating Western powers such as the United Kingdom, and the United States.
South African countries are where China’s involvement in its trade industry is quite huge. Chinese firms have set up shop in many African countries, dominating the manufacturing and resources industry. In fact, reports have found that China’s foreign investments in the continent far exceeds that of France, Britain and the US.
According to a McKinsey & Company report, Chinese companies could, in theory, earn a combined revenue of US $ 440 billion by the year 2025, a considerably huge amount, almost double, compared to what they generated in 2015. The report goes on to note that “Neither Western partners such as France, the UK and the US, nor major developing countries such as India and Brazil match China in the depth and breadth of involvement in Africa.” This just proves that China is Africa’s biggest economic partner.
Before discussing the benefits of globalization through the lens of Chinese-African relations, it is best to discuss first, what exactly is the status quo of the relationship between China and Africa.
Chinese African Relations
The year 2015 solidified the relationship between China and the continent of Africa. The African Union and China signed a memorandum of understanding where China agreed to build a base in Djibouti and signed a number of bilateral agreements with African countries. If that wasn’t enough, Johannesburg hosted the Forum on China-Africa Cooperation or FOCAC where delegates from 50 African countries, the African Union and China convened for future planning.
Aside from the diplomatic relations, China also offered a US $ 60 billion loan for countries to use in their development. Over the years, China has casually injected an influx of Chinese-owned firms and Chinese workers into the continent. While some consider this as a distasteful thing, believing that it is merely stealing business away from local companies, there are still benefits to this.
The migration of people from one place to another is a normal human tradition. When one finds a better opportunity elsewhere, it is just natural for him/her to move to the new place. Because of the recent strengthening of ties between China and Africa, it can’t be helped that some sort of migration occurs over the years.
Chinese businessmen are opening up shop in Africa due to it being rich in natural resources. On the other hand, Africans are also being lured to China because of the many opportunities it presents. Some are merely going to China to study in the universities while some already fall in love with the country and its culture, deciding to stay inside. Today, it is not uncommon to see African investors with a Wholly Foreign-Owned Enterprise in China.
This is one of the effects of globalization. Below, I have listed some of the best benefits of globalization.
Globalization Drives Innovation
A monopoly over a certain product and/or service is bad and could lead to stagnancy. Without any competition, brands are left complacent leading them to not make an effort in improving their product.
With international brands appearing in the local landscape, local brands are then challenged to compete with international brands, forcing them to improve their products. Competition, especially international, encourages brands to be more creative with improving their products.
This results in a vast improvement of the product and/or service that local companies offer greatly benefitting the market. The costs for these local products are also kept at a decently low amount as they have to compete with the low prices of foreign products.
Globalization Introduces Cultures To Each Other
Globalization has guaranteed that countries are closely connected with each other.connected countries with each other. Foreign and local culture are now intermixing with each other shattering boundaries. For instance, it is now possible to eat Chinese food for dinner, listen to a German band, and then catch a late-night Hollywood film even if you are in Africa.
Globalization Improves The Living Standards Of Locals
Perhaps the main benefit of globalization is that it improves the living standards of the people in developing nations. Since the 1990s, the World Bank has reported that extreme poverty has been reduced to 35%.
The Millenium Development Goal reported that their goal of cutting down the poverty rate by half was completed five years ahead of schedule. Almost 1.1 Billion have been removed from extreme poverty.
With foreign countries establishing companies inside developing nations come the need for local workers. As employment rates skyrocket, the number of people living under the poverty line decreases. This means that globalization operates in a mutually benefitting relationship. Rich countries benefit from setting up businesses in foreign, usually still developing, countries. On the other hand, the developing nations benefit by having their citizens employed and earning.
Globalization Updates Local Technology
Can you imagine if globalization never happened? Any technological advancement that happens in a country will not spread around the world leaving some parts of the world living in the 21st century while some are still left in the Stone age. Mobile phones, for instance, are perhaps one of the best examples of how globalization benefits society. The mobile industry is filled with brands from different companies: Apple, Samsung, Huawei, Blackberry, etc. These brands come from various countries and yet by competing with each other, they have brought the mobile phone industry into an unimaginable level.