Ancient China was a self-contained and inward-looking economy with mostly domestic-driven prosperity, and it saw the world as a hierarchy of states with China at the centre. But today, China’s prosperity is linked to the globalisation of its economy, making such a hierarchical order difficult.
Posts tagged as “globalization”
In this age of de-globalisation and aggressive nationalism, many people have begun to believe that cultural diversity is a hindrance to growth. However, history has shown that diverse societies tend to be more innovative, efficient and prosperous in the long run than homogenous ones.
Across the world, countries have been forced to sacrifice economic activity to contain the spread of coronavirus. In India, lockdowns and restrictions will have an adverse impact across a range of issues, from NPAs in the banking sector, to trade in the chemical sector.
The working middle class in the West faced difficulties due to globalisation. But unlike in the West, the rise of right-wing populism in India does not have an economic rationale. Instead, it actively sabotages the economic openness which has worked well for India in the past.
The basic principle of trade is that a country exports in sectors where it has a comparative advantage while importing in sectors where it does not. But in the Indian economy, only a minority of the workforce is engaged in activities where India is competitive.