Download Conform to the Globalization Trend, Promote Economic and

Conform to the Globalization Trend,
Promote Economic and Social
Development in Asian Developing
.
Countries
Professor Zhu Zhenming
Institute of Southeast Asian Studies,
Yunnan Academy of Social Sciences, PRC
 presentation will focus on conforming to the
globalization trend, promoting economic and social
development in Asian developing countries. I would like
to touch on three issues. First, globalization brings
opportunities and challenges. Second, expand opening
up promotes economic and social development. Third,
regional cooperation is full of potential and vitality.
Ⅰ.Globalization brings opportunities and
challenges
 Since 1980s, process of economic globalization has speeded up.
Economic globalization leads economic growth, technological
progress, optimization of essential productive factors and speeds
up development of world economy. Globalization brings quite new
opportunity for world development, makes some people sudden
wealth, some people wealth loss. It also leads some developing
countries further lose their
 competitive power so that gap between developed countries and
developing countries ,between the rich and the poor continue to
expand . The multinational enterprises (MNEs), and a new
organization of industries and services that create opportunities for
developing countries, but also challenges and threats. Economic
globalization is a rapier to numerous developing countries. This
has become consensus. Though irrational practices, globalization
has become an unchangeable trend. People have no way to arrest
it, but they can conform to its development and strive for good
goal.
 Indeed, following development of economic globalization, changes
take place in international economic environment. According to
UNCTD’s World Investment Report 2004, developing countries
and South-South cooperation have happened huge changes.
Developing countries in the aggregate were running a large
current account surplus in 2004, equivalent to 2 per cent of their
gross domestic product (GDP). Their foreign reserves grew by
$378 billion in 2004, to an estimated $1.6 trillion, an all-time high.
Developing countries have become important not only as the
destinations of foreign direct investment but also as notable
international investors. They averaged $37 billion in FDI outflows
per year from 2001 to 2003, almost equal to the annual world
totals during the first half of the 1980s; about one third of this
amount went to developing countries. The total stock of FDI of
developing countries rose from $129 billion in 1990 to $859 billion
in 2003, with nearly half of it from South-South. Trade among
developing countries is now growing faster than their trade with
developed countries and accounts for over 40 per cent of the total
trade of the South. The collective strength of developing countries
in international trade has also been growing. Almost half of all
Asian trade is now South-South. That means Asian developing
countries facing globalization challenge have searched a pathway
of development.
 In the last few decades, a number of developing countries,
especially in Asia, have provided the success stories and the
inspiring examples.
 When we talk developing countries success, we have to mention
China. The founding of the People's Republic of China marked the
independence and liberation of the Chinese nation and brought
about profound changes in the country. But in the 1960s and
1970s when waves of dynamic economic growth and scientific and
technological revolution were sweeping across much of the world,
China was in the grip of the decade-long “cultural revolution.” It
thus lost another good opportunity for development. After pursuing
the policy of reform and opening up, China have conformed to
economic globalization trend and seized the new historical
opportunity and achieved fast development for 30 years. Facing
challenges of economic globalization, China’s experience is that
does not blame fate or other people, actively address challenge.
 As a result, China's overall national strength has been greatly
enhanced, the living standards of its people have significantly
improved and the country's international standing has steadily
risen.
 At present ,the acceleration of economic globalization and rapid
progress in technological innovation have presented mankind with a
rare opportunity for development .In Asia-Pacific region the economy
is growing steadily; interactions and interdependence among
countries are increasing and common interest are expanding; and
various mechanisms on dialogue and cooperation are active. It is a
region full of vigor and vitality. As one of the most dynamic regions
with great potentials, the Asia-Pacific region has become an
important driving force propelling global economic growth. On the
other hand ,global economic imbalances are getting more serious,
trade protectionism is resurfacing, pressure on energy resources is
growing, and issues relates to eco-environment are more acute.
These add difficulties in development in Asian developing countries.
As to Asian developing countries, opportunities are more than
challenges. But, challenges are harder to address. Especially new
problems continuously arise and cause serious influence to
economic and social development in developing countries.

For example, China’s snow disaster happened
unexpectedly in South China two months ago. by snow
disaster, more than one hundred persons died , 480
thousand house collapsed，crops disaster area reached
11.8 million hectares, direct economic losses reached
more than 20 billion USD. This caused our more
difficulties, but we also understand how to address this
challenge in South China.
Ⅱ. Expanding Opening-up
and promoting economic and
social development
 Importance of opening up is an understood thing. A nation cannot
be strong without opening up. Here ,I would like to mention
China’s opening up.
 In 1978, China started course of reform and opening up. in the
past three decades, China has made remarkable achievements in
its opening-up endeavor. China’s GDP has increased from 216.5
billion USD in 1978 to 2.6 trillion USD in 2006 with an annual
growth rate of 9.6%, raising China’s global ranking from No. 15 to
No. 4. China’s import and export has gone up from 20.6 billion
USD in 1978 to 1.7 trillion USD in 2006, up from No. 32 to No.3.
China has accumulatively attracted more than 700 billion USD of
FDI, ranking No.1 for 16 consecutive years among developing
countries. Its import and export in goods, only $20.6 billion,
reached $1.76 trillion in 2006, registering an 84-fold increase. This
turned China into the third largest trading nation in the world.
China's foreign exchange reserves, which never exceeded 1
billion USD before 1978, surpassed 1.53 trillion USD at the end of
2007. Foreign trade has become a key pillar underpinning China's
economic development. China joined the World Trade
Organization in 2001, which marked a new stage in its opening-up
 In China’s opening up, attracting FDI is an important
element. Active FDI utilization facilitates the creation of
an open economy in China. Through efficient and active
use of foreign capital, China has brought in a large
amount of advanced technology, talents, investment,
management expertise, marketing models, international
competition mechanisms, as well as international rules
and standards. This has further freed and updated
people’s mindset and accelerated the creation of an
open economy on the back of technological
advancement and industrial restructuring and upgrading.
China have greatly boosted productivity and narrowed
the gap between China and developed countries.
 In addition, with China’s economic growth, “going global”
has been identified as a major national strategy by the
Chinese government. While boosting inward investment,
the Chinese government also encourages competent
Chinese enterprises to invest overseas and actively
explore foreign trade and economic cooperation. By the
end of 2006, nearly 8,000 Chinese-invested enterprises
had been set up in some 160 countries and regions with
direct Chinese investment over 73 billion USD. The
areas of overseas Chinese investment cover
manufacturing, agricultural cooperation, resource
development, project contracting, R&D and others.
Meanwhile, the forms of investment have also diversified
from the simple business establishment to cross-border
mergers and acquisitions, equity swap, overseas listing,
R&D centers and industrial parks.
 Of course , China's opening up is comprehensive in
nature. China is open not only to developed countries,
but also to developing countries, open not only in the
economic field, but also in the scientific, technological,
 The facts prove that developing countries
should not fear opening up and not fear
foreign capital .Problem is how to
efficiently manage foreign capital and
make foreign capital serve local
development and not only make money for
themselves.
Ⅲ. Regional cooperation is full
of potential and vitality.
 Asian experience showed that regional cooperation
could be a powerful means to minimize the risks of
globalization. So, both developed countries and
developing countries attach importance to the regional
economic cooperation. Though regional and
subregional economic cooperation arose in 1960s
between developing countries, it achieved success
truly in 1990s .Today, regional and subregional
cooperation become a trend in world economy, various
regional cooperation mechanism between developing
countries in Asian region have not been adventure. But
its role for facilitate to economic and social
development in developing countries has just come out.
 We can take two successful examples of
regional cooperation between developing
countries .One is China-ASEAN Free Trade Area
(CAFTA), one is the Greater Mekong
Subregional Cooperation (GMS).
 CAFTA was signed between China and the
ASEAN in 2002. It is expected to create a free
market encompassing 1.7 billion people, an
aggregate GDP of almost US$2 trillion and twoway trade worth US$1.2 trillion. It will be the
largest market in the world and the largest one
made by developing countries.
 Since the CAFTA was launched in 2002, bilateral trade
has increased. Up to 2007, China-ASEAN bilateral trade
reached 200 billion USD. It demonstrated CAFTA
effect .ASEAN is now China's fifth largest export market
and fourth largest trading partner. Under a provision of
the "early harvest package" in the framework, ASEAN
countries and China progressively eliminate tariffs on
selected farm products within three years starting early
in 2003 , well ahead of the implementation of FTA plan. It
promotes farm products trade between China and
ASEAN countries.
 Except for mutual tariff cuts, China and ASEAN take
agriculture, IT technology, human resources, investment
promotion and exploration of the Mekong River as
CAFTA’s agenda of economic cooperation between the
two sides. This is a new creation. CAFTA is in interests
of both sides and is helpful to promote economic and
social development between two sides. It will improve
the competitiveness of the whole region and contribute
to a faster progress of East Asian cooperation as a
whole.
 GMS program was initiated by Asian Development Bank
in 1992.The six countries bound together by the Mekong
River - Cambodia, China, Lao PDR, Myanmar, Thailand
and Vietnam - embarked on a cooperation .GMS
cooperation reached tremendous achievements over the
past 15 years. Cooperation in many fields such as
infrastructure, energy ,telecommunication, environment,
tourism, agriculture and human resources development ,
all of which are inherent components for advancing the
GMS program have made remarkable achievements .It
becomes a good example in multilateral cooperation in
the developing countries.
 The achievements of GMS are not only limited hardware
construction. Its achievements worthy of paying more
attention is that it represents a correct direction of
cooperative development in developing countries and it
established some commonly accepted principles
including equal consultation and mutual benefit, mutual
respect, and voluntariness and so on. These principles
have played a catalytic role in maintaining the
momentum of the GMS process.
 Two examples show that strengthening regional
cooperation is effective measures to economic and
social development of developing countries. It not only
will be beneficial to developing countries, but also
promote South -South cooperation.
Ⅳ.Conclusion

1. Though unreasonable international economic order exists, developing countries
gain more bright future of development is possible under the new situation.

2. The world today is an open one. No country can achieve development in isolation
or seclusion. It is important for developing countries that explore correct path for
opening up based on national conditions

3. South-South cooperation, South-South trade is beneficial to development in
developing countries. Developing countries should insist on advancing South-South
cooperation and uphold their profits.

4. To strengthen relations and cooperation with developed countries remain important
aspect for development in developing countries. South-South cooperation is by no
means to exclude developed countries.

5. Regional cooperation between developing countries has received achievements. It
is necessary to introduce and spread successful experience to more developing
countries.

6. To actively exploring new mode of cooperation. Mode of cooperation between
developing countries is unchangeable. Developing countries should keep pace with
times and actively exploring new mode of cooperation. So long as not violate WTO’s
regulations, various tries should be encouraged
 Thank you