The global economy is increasingly dominated by economic hubs. The largest of these at the moment are New York, London and Tokyo. But cities like Dubai and Shanghai are rapidly emerging as new financial and economic centres.
Shanghai is China’s largest city, with an estimated twenty million people. The metropolis has more skyscrapers than New York, a public transport system exceeding that of London, the biggest harbour in the world and, in Pudong, a brand-new business centre. The region accounts for 30% of China’s foreign export, 20% of its industrial production and attracts 25% of all foreign investments. Over five hundred multinational corporations, such as General Motors and Volkswagen, have their head offices in Shanghai. As a result of the economic growth, the standard of living of a large proportion of the city’s population is rising.
Shanghai and in a broader sense, China, are profiting from economic globalization. Multinational concerns nowadays play an important part in the organization of production and consumption. Flows of goods, capital and information run increasingly within and between these concerns. During the past few decades, multinationals moved their labour-intensive production processes to low-wage countries such as Singapore, Taiwan, South Korea and Hongkong. And when wages rose there, they also moved to China, especially to the Shanghai and Beijing areas. Meanwhile, China has become a major player in the global economy. Chinese companies are expanding their activities in other parts of the world, also in the West. In addition, China has large-scale investments in Africa to safeguard the growing demand for imported raw materials and energy. In view also of the emergence of India, which, like China, is a country that accounts for a significant proportion of the global population, Asia’s economic role is rapidly gaining momentum.
As to the worldwide consequences of economic globalization, views differ. The positive interpretation says that a free global market in the sphere of trade and investment ensures that more and more people share in the proceeds from the growing global economy. The negative interpretation of globalization emphasizes that the free market policy is the agenda of prosperous countries and multinational corporations. In this perspective, economic independence leads to increasing economic inequality.
