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Impact of Neoliberal Markets on China

3259 words (13 pages) Essay in Economics

08/02/20 Economics Reference this

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Introduction

The globalization process has promoted economic cooperation, political communication and cultural exchanges and integration on a global scale, including developed countries, developing countries and underdeveloped countries and regions (Steger, 2013). However, while globalization brings many opportunities, it also brings challenges to various countries. While promoting the economic development of all countries, it has also brought many negative effects to them (Harris, & Seid, 2000). With the integration of neoliberalism, this influence has become apprarently. When referring to neoliberalism, Martinez and Garcia mentioned that in 1976, Adam Smith first proposed free trade in the “World of the United Nations” as the best way to facilitate the country’s economic development. The government’s interference and participation is likely to slow down or even hinder the development of the national economy. Over the past 20 years, with the influence and spread of the capitalist economy on globalization, neoliberalism has also been involved in the development of countries around the world (Martinez & Garcia, 1997). According to Martinez and Garcia in 1997, the core feature of neoliberalism is economic driving, which supports complete market liberalization, including commodities, capital and services; at the same time weakens the role of the government, reduces or even eradicates the government’s original public services. Investment includes medical, educational, social welfare, etc., emphasizing the importance of personal obiligation in public service; in addition, privatization is one of the most striking features of neoliberalism. The government’s retreat and the strengthening of personal responsibilities have accelerated the privatization process. In fact, the development of neoliberalism under the globalization model has indeed achieved economic growth and income for all countries. However, it has also brought some negative effects to some countries, especially the third world countries. Just as Chomsky (1999) mentions that the gap between the first world countries and the third world countries in the 18th century is not as obvious today. This article will focus on the impact of neoliberalism on third world countries, with Syria and China as the main targets of analysis. At the same time, this article will also pay special attention to the impact of neoliberalism on the education of these two countries which is a category of public services.

The idea of neoliberalism is to support the free movement of the market economy. It insists that the market is unconstrained, and even the government departments should reduce their influence and intervention on the market (Martinez & Garcia, 1997). However, china has different condition. On the one hand, the Chinese market has gradually emerged as a neoliberal feature: liberalization and marketization, and incorporates elements of the International Monetary Fund’s prevention and World Bank market model (Liew, 2005). On the other hand, state intervention still plays an important role in market development. The government is still the researcher and issuer of policies and rules, limiting the development of the market to a state-controlled ideology, so that while achieving economic goals, the government can achieve its political goals, maintain and stabilize its monopoly on political rights in the country (Liew, 2005). This is also known as “neoliberalism with Chinese characteristics” (Schmalz & Ebenau, 2012). While neoliberalism promotes economic growth for China, it also has a negative impact on the development of China’s economy, society, and education.

In fact, in China, neoliberalism is imperative in the late 1970s. On one hand, when Deng Xiaoping first proposed reform and opening up, his concept was marketization (Wu, 2008). Wu (2008) also mentioned that he encouraged economic development as the central task to shift national development from class struggle to economic development and promotion, thus driving other aspects of the country, including political, cultural and social development. On the other hand, in the process of socialist development, the state-led crude industrialization has made the effective accumulation of capital reach a critical point. At the same time, the country cannot find a larger and alternative accumulation space. Therefore, economic reform is imperative, because both privatization and internationalization will expand the space for capital accumulation, thus satisfying the need of country’s active and stable development at that time (Wu, 2008).

 Impact on economy

Marchetti (2009) mentioned that before the reform and opening up, China’s economic system was mainly a planned economy. With the beginning and acceleration of the reform and opening up process, China has begun to shift from a planned economy to a market economy. Under this circumstance, Chinese economy has achieved significant growth (Liew, 2005). Liew (2005) mentioned that the Chinese economy grew at an annual rate of 9.7% during the 20-year period from 1979 to 1998; while in the four years after 1998, the annual economic growth remained at 7.7%. In 2009, China’s GDP was 12 times that of 1980 (Baeten, Van Ourti & van, 2013). On the other hand, he added that in 1978, 60% of Chinese people did not reach the international poverty line. However, by 1996, the population living in the world poverty line only accounted for 6% of the Chinese population (Liew, 2005). In addition, Schmalz and Ebenau (2012) mentioned that after China joined the WTO in 2001, import and export tariffs were further reduced, and China began to become the world’s largest exporter, and its export revenue accounted for more than 30% of GDP.

Although the economic reform has brought China a lot of improvement, it has also cause negative impact on Chinese people. Firstly, the enactment and implementation of economic reform has caused the “iron rice bowl” under the traditional planned economy of some countries to be broken, and some traditional state-owned enterprises and factories have been forced to close or to be replaced (Marchetti, 2009). Lin (1999) also mentioned that under the market economy system, 80% of state-owned enterprises have been unable to make ends meet; therefore, they must be reformed, adjusted and even restructured. As a result, the income of employees is directly reduced and the unemployment rate is rising (Lin, 1999). A large number of workers were fired and pushed to a competitive labor market. They can no longer enjoy the iron bowl-style social security (Zhao, 2008). Secondly, the economic reform leads to the inequality of development. One aspect, it embodies in the imbalance of geographically development (Chen & Fleisher, 1996). Chen and Fleisher (1996) indicated that unbalanced economic growth in coastal and inland areas has led to an increase in income levels in these two regions, income levels in urban areas are much higher than that in rural areas. Also, Baeten, Van Ourti and van (2013) stated that the CDP of the provinces in the eastern coastal areas is higher than that of the inland provinces, and there are differences and inequalities between urban and rural incomes. According to the World Bank’s statistics in 2005, the proportion of people in rural areas has dropped by 68%, and the number of urban poor has only dropped from 44% to 2% (Baeten, Van Ourti & van, 2013).

Impact on social justice

On the basis of uneven economic development, the fairness of society is also affected (Postiglione, 2015). From a geographical perspective, many people living in rural or underdeveloped areas are still unable to escape the effects of poverty due to low incomes. With the acceleration of the privatization process, public service projects such as medical care and education have gradually been privatized. As a result, it is difficult for the poor to pay high fees, so they are gradually excluded from public services (Postiglione, 2015). Moreover, Baeten, Van Ourti and van (2013) reveal that unlike children in cities, children in remote areas still suffer from malnutrition. While from the perspective of gender equity Marchetti (2009) insists that most of the countries in the world that implement neoliberal policies have contributed greatly to gender inequality, especially to women. “Martin Hart-Landsberg and Paul Burkett observe: ‘Not surprisingly, the effects of the destruction of the social safety net have not been gender neutral. Women have generally been called upon to carry a heavier domestic load, which then hampers their ability to find acceptable employment in China’s increasingly deregulated labor market’” (Marchetti, 2009). Women are often asked to take on a heavier family burden, which prevents them from finding acceptable jobs in China’s increasingly deregulated labor market. In addition, influenced by Chinese traditional culture, women are generally considered to bear the main daily living responsibilities in the family (Marchetti, 2009). However, Marchetti (2009) indicated that after the market is opened up, social welfare programs such as medical care, education, and pensions are no longer just government responsibilities. The privatization of these social security methods has forced women to take care of their families and careers and increase their household income to bear the corresponding expenses. This is a challenge for women, especially for women with low academic qualifications and little work experience in rural areas, working in a privatized company is almost impossible. Therefore, most of them can only choose to engage in low-level or low-skilled work to barely maintain family expenses (Marchetti, 2009).

Impact on education

Zhang and Bray (2017) demonstrated that the neoliberal elements have also had some impact on Chinese education. With the opening of the economic market, China’s education has also shown a trend of standardization, privatization and marketization.

Privatization:

First, the market economy has facilitated the privatization of education (Tiehua, 1996). Lin (1999) illustrates that in the 1980s, private schools in China primarily concentrate on short-term tutoring and some technical training. Since China began economic reforms, private schools in China have emerged on a large scale, showing a rapid development trend. These private schools are not only limited to professional and technical training, and the number of private primary schools, secondary schools, high schools and even private universities has also increased significantly. According to a group of statistics, by 1993, China had a total of 20,000 private schools nationwide; by 1994, there were about 60,000 private schools and related educational institutions nationwide (Lin, 1999). The emergence of shadow education is a manifestation of the privatization of Chinese education, which has aroused widespread public concern (Zhang & Bray, 2017). Although private schools provide more education opportunities for students, provide working opportunities for teachers and meet the different needs of different people for education, it still accelerates the development of educational market because the competition is fundamentally based on the fact that private schools are for profit (Lin, 1999). Additionally, its high cost has accelerated the inequality of education because only families with good economic conditions are qualified to let their own education in private schools (Lin, 1999). Wealthy people have the possibility to pay for higher-quality tutoring than low-income families (Zhang & Bray, 2017).

 Standardization

Zhang and Bray (2017) mentioned that with the development of neo-liberalism, the education system in China has shown a trend of standardization. Unlike the situation in which graduate students are eligible to be assigned to work during the planned economy, in the market economy environment, the academic qualifications gradually show their leading role, and advocate high academic qualifications. They also proposed that talents are eligible to apply for high-ranking, high-paying jobs. At the same time, the diploma is also regarded as one of the measures of social status (Zhang & Bray, 2017), it is considered “a ticket to the elite” (Professor emphasizes weight of china’s standardized tests, 2016). From the school perspective, almost all pre-university education assessment indicators are the rate of enrollment, including junior high school entrance examination and university entrance examination (GAOKAO). At the same time, the proportion of students admitted to key universities is also listed as one of the criteria for measuring the excellence of this high school (Wang & Jang, 2016). In addition, the teacher’s performance and bonuses are directly linked to the student’s academic performance, so it is important for the teacher to be too eager to pursue the test results because the test scores are regarded as a key indicator of income. In fact, DeSaxe (2015) states that standardized test can extend the gap between students by using the scores, and leads to further inequalities in education. In addition, test-driven education allows teachers to focus more on exam content and methods, ignoring the process of imparting knowledge in the classroom, which in turn limits the critical and creative thinking of students (DeSaxe, 2015).

Marketization

Under the influence of the market economy, education development is becoming more and more market-oriented. On the one hand, the expansion of the education market has intensified competition not only between students but also between schools and families. According to one statistic, the proportion of Chinese students receiving higher education after high school graduates rose from 28.7% in 1991 to 87.6% in 2013 (Zhang and Bray, 2017). However, although the enrollment rate of higher education is rising, the competition among students has intensified. They not only have to win the opportunity to enter a prestigious university, but also to seek the opportunity to enter the prestigious elementary school and junior high school to gain access to key high schools so that prepare for admission to a prestigious university (Zhang and Bray, 2017). Wang and Jang (2016) insist the same attitude which is that some elementary school students have been planned by parents to the top secondary schools two years before their primary school graduation. Even parents have to register their children in a primary school with a good academic record in order to prepare their children for entering a competitive secondary school, even if the families who have the normal economic environment usually do the same thing as well.

On the other hand, under the influence of the market economy, education has been summarized into the ranks of the commodity economy (Tiehua, 1996) and it facilitates the inequality (Wang & Jang, 2016). Generally, education is regarded as a tool for finding a job and is often associated with individual’s social status and income (DeSaxe, 2015). The inequality mainly reflects two aspects: the unequal opportunities of registering schools caused by regional differences. One aspect, Wang and Jang (2016) state that although China’s education system stipulates that students must enter the school according to the place of residence and residence during the 9 years of basic education (6 years of primary school and 3 years of junior high school), they are not equal in primary school infrastructure construction and teacher allocation. This has led to a rapid increase in housing prices in the communities where these primary schools are located. Even so, many parents are still willing to pay for housing at a high price in order to allow their children to receive quality education. On the contrary, children in ordinary families can only passively attend primary schools in their communities (Wang & Jang, 2016). At the same time, as far as rural students are concerned, they are less likely to receive education than urban children (Postiglione, 2015). For some children in economically underdeveloped areas or ethnic minority children in remote mountainous areas, their education often shows a low enrollment rate and a high dropout rate (Postiglione, 2015). In addition, the government advocates different levels of investment in education for different schools. Usually, key schools will win more government investment (Postiglione, 2015). And the government enacts policies that allow parents to send their children to key schools where the residence is located and where they live, but the entry requirements are set by the schools themselves (Wang & Jang, 2016). These conditions are usually associated with “money, social relations, and talent.” Through the introduction of the introducer, the school selected the students who considered them to be “talent” through the entrance examination, and then issued high enrollment bills to the parents. The parents paid the expenses very comfortably because their children could have a positive academic Grade reading. For key schools, students become the main source of school income, and they reinvest their income into cultivating teachers and strengthening school hardware facilities to achieve a healthy business. In comparison, ordinary schools have a lower probability of obtaining additional income, thus losing some economically affluent students and possibly losing some talent (Wang & Jang, 2016).

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