Economics Assignment: Globalization on Consumption Practices in China & Mexico
Task: Prepare an economics assignment discussing the impact of globalization upon consumption practices in China and Mexico.
The present economics assignment is critically discussing about “Globalization” which refers to the process based on which the world that was previously isolated due to technological and physical distancing has become significantly interconnected (IGI Global, 2019). The concept of globalization has been manifested by the increasing communication between various people around the world based on the involvement of sharing ideas, goods, services, products, investment and cultures. Overall, based on globalization, the entire world has become interdependent on various populations, economies and cultures that have been brought by trades involved across borders in services, goods, investment, technology and information (Surugiu & Surugiu, 2015). Consumption practices, on the other hand, refer to ways in which consumers consume the various services and products (Saltik et al., 2014). This report will reflect on the impact of globalization on the consumption practices for two chosen countries of China and Mexico. In the context of economics, consumption practices mean the direct and final use of services and products based on the satisfaction level of human beings. This type of practices is also known as productive consumption as they help in the production of services and goods. The factor of globalization has tremendously influenced consumption practices around the world. This report will discuss the impact of globalization upon the consumption practices for two chosen countries of China and Mexico.
The impact of globalization on the consumption practices in China
About globalization in China
China has demonstrated a remarkable transformation in terms of being the biggest opposition of globalization to becoming a committed member and advocate of globalization (Lattemann et al., 2014). The present economy of China is more open than what it is in Japan, and China has been emphasizing globalizing its institutions to such a massive degree that several big economies have not seen in quite a long time. Commitment to global competition, adoption of the law rule, use of English and foreign education have truly transformed the Chinese civilization. Hence, the entire economic success of China is associated with the factor globalization and liberalization, as each aspect of globalization has brought China tremendous success. In the history of this world, no other country apart from China has improved the standards of their workers rapidly. In addition to that, China has become an important ally of the United States and South-East Asian promotion of free investment and trade that is acceptable in Brazil, India and Japan (Roache, 2020). Overall, the success of China's globalization has also influenced its neighbouring countries, such as India, which has learned from the advantages of China's open economy.
Consumption practices and globalization in China
According to Asia Society (2018), the per capita GDP of China in 1986 was $282, and in 2016, it rose to $8100, which indicates the substantial rise of consumers' living standards in China. Globalization has significantly shaped the way the consumers in China perceive the required services and products. Technology has been an integral factor of globalization and based on the rapid development in technology, the consumers in China has gained access to a wide range of options and started understanding the global standards that are required in the services and products designed for consumers. Globalization in China has been driven by worldwide media flow along with technology, and migration has shaped the consumers' lives and modified their behaviours. With the passage of time, more Chinese Consumers has started living a global acumen that described the synchronization process of culture and resulted in the global consumer culture’s emergence. In China, the factor of globalization has promoted efficiency and competition that has become a centre of competition law and economic principle along with becoming a mechanism of core regulation. The consumer practices experienced the invasion of a market-oriented system that brought about fair policies based on the best interest of the consumers. China emphasizes tremendously on technological advancement, as this impacted the consumer practices as the preference of the consumers shifted towards a more technological want that can make human lives easier (Achille, 2020). As a result of the rapid globalization in China, the consumers of the country started desiring better technologies at lower prices, and this led to the companies competing in manufacturing better technological devices at lower prices. One of the most prominent impacts of globalization in the Chinese consumer practices has been the transformation in the marketplace that was based on the replacement of the consumer goods society by services society, and this was linked to the production changes, finance and information collection, which has also led to significant proportional growth in services based on consumption practices.
In China, the market-led globalization intensified the exchange of commodities that helped in capturing global economies by promoting consumerism based on lucrative promises such as efficient and fair use of resources required for meeting the basic needs of human beings along with enhanced access to adequate goods and reduced prices caused by competition with local monopolies. The impact of globalization in China’s consumption practices caused changes in the trends that are visible in the sphere of consumption because the impact intended to produce new forms of consumption behaviours, creation of new products, new selling prices and increasing activities of consumers. The companies in China have found ways to lower the cost of producing their goods as a result of the global competition, which has significantly driven the prices down and created a wide variety of choices for the consumers in terms of shaping the modern-day consumption practices (Haley, 2015). Lowering the costs caused by globalization has helped the Chinese consumers to develop their lives on better money, and this massively influenced their consumption practices of wanting better services and products for lower prices. Overall, for the Chinese consumer's globalization ensured they had access to greater market ranges, which allowed them to compare the products with a larger market reach. Therefore, the development of the market economy as a result of the globalization process that was accompanied by technological progress in China that significantly raised the living standards of its population and created a consumer culture based on which the consumption practices thrive to satisfy the best of their needs.
The impact of globalization on the consumption practices in Mexico
About globalization in Mexico
In Mexico, globalization has had undisputed encouraging effects on the country’s economy as the Mexican government has tremendously supported the trade development and expansion within the country. As a result of the economic growth caused by globalization, Mexico's industries and business have immensely benefitted. During the 1980s and 1990s, Mexico began to loosen its restrictions in trade, and it significantly reduced tariff along with signing the NAFTA (North American Free Trade Agreement) with Canada and the United States. Such actions immensely Helped in tripling of the country’s GDP between the years 1980 and 1992 (Henrichs, 2013). However, it has always been argued that globalization in Mexico did not benefit the country’s citizens. It was supported by the fact that in the 1990s, Mexico's average labour earnings reduced by almost 10 per cent in the states that had lesser exposure to globalization as compared to the states that had more exposure to globalization (Henrichs, 2013). On the other hand, globalization was successful in terms of eliminating the discrepancy that existed in the income levels in the southern states and northern states of Mexico. Despite such efforts of globalization, in Mexico, the northern states have become wealthier as compared to the southern states that became poorer.
Consumption practices and globalization in Mexico
Mexico’s participation in global markets has been massively influenced by strategic ties with various other regions and countries of higher economic growth. The consumers in Mexico were provided with a better range of services and products based on improved R&D (research and development) that led to innovation and output capitalization. The new companies in Mexico, due to globalization, found it easier to start competing with the old incumbents and the trade sector of the company increased the total number of employees on both the aspects of imports and exports. In Mexico, the consumption practices became inclined towards products from Canada, and the United States as the people in the country had better access to compare the products along with pricing. In addition to that, the impact of globalization caused the firms based in Mexico to specialize and invest in R&D so that they can compete with the standards of the products and services manufactured in Canada or the United States (Cuadra-Montiel, 2014). There was a reduction in the rates of high inflation that helped the consumers in Mexico to gain more value for money in terms of consumption practices. The real wages of the people in Mexico were significantly increased along with lowering of consumption costs. Previously, many goods were affordable to only a few households in Mexico, but globalization caused a radical shift in the consumption practices where the majority of the households began affording goods such as mobile phones (Jiménez-Jiménez et al., 2015). The spread of globalization in Mexico has made the country’s economy greener and more productive, which in turn ensured an upward shift in the consumption practice, and this has led the local companies to start implementing technologies that were used by the globally recognized companies as failing to implement the relevant standards would result in foreign companies gain significant market share in their own country.
The emergence of globalization allowed industrialists and farmers in Mexico to bring about radical changes in their approach to production based on the changing trends in consumer behaviour. The consumption practices of the people in Mexico, as a result of globalization, started preferring industrialized products that can facilitate their usage along with offering safety and security. In addition to that, industrialized products also allowed the consumers to achive their prospect of social status. It was also observed that based on globalization, reputed commercial enterprises such as Commercial Mexicana, Wal-Mart, etc. that previously participated only in urban areas of the country started targeting small centres in rural areas as well because the changing trends in consumption practices opened tremendous opportunities for such companies to capitalize on it. The consumers from rural areas in Mexico started desiring urban features as with the economic development brought by globalization; the people had better access to a large base of services and products. The features that constituted rural areas were framed by polarized aspects as the lives of rural people in the northern states of Mexico started becoming wealthier as their consumption practices started desiring for efficient services and products at lower prices (Murià Tuñón, 2016). The consumption practices of the people in the southern states of Mexico did not change much as the economic development caused by globalization did not spread to their areas significantly. In the southern states of Mexico, there was a scarcity of formal jobs as compared to the northern states, and in the southern parts, several sections of the population did not receive any income. Overall, the consumption practices were tremendously influenced by the impact of globalization in Mexico, which is proven by the difference between northern states and southern states.
In the end, it can be concluded that globalization has tremendously shaped the world economy, and this is proven by its impact on the improvement in consumption practices of consumers around the world. This report has analyzed the consumption behaviour of people that have been changed by considering the scenarios of two countries China and Mexico, where the impact has massively shifted the consumption practices. The analysis of this report has made it clear that in China, the impact of globalization has generated tremendous positives for the consumers by enhancing the income level of the population along with allowing the people to have greater access to a wide variety of services and products, which ultimately a crucial role in terms of determining the consumption practices of the country. On the other hand, in Mexico, the impact of globalization has been uneven as the northern states of the country became wealthier and the southern states became poorer. This discrepancy created massive confusion for business enterprises to determine the consumption practices of the consumers in Mexico. Overall, the impact of globalization on consumption practices is significant, and this cannot be denied because of the results obtained from various analyses.
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