Essay Sample on The Concept of Globalization

International business entails all the commercial activities occurring to enhance the transfer of products, ideas, resources, technology, and human capital across national boundaries. It encompasses the aspects of globalization and finance. Kempe, in the article "Investors need to wake up and face the warning signs in the global economy," tries to sensitize investors to consider the changes in the global economy (Kempe, 2020). The articles outline how major economies are recording slow growth and other recession. There are changes in both economic and political contexts, and this affects how international business is conducted. Zhang & Lee, in the article "China Regulator, says an Epidemic's impact on Industry 'Major' in February," seeks to examine how organizations are re-evaluating the function assumed by China in global supply chains. The re-evaluation is due to the outbreak of coronavirus, which has implications in how international business is conducted (Zhang & Lee, 2020). The authors postulate that businesses are thinking of relocating production activities to other parts of the world. Business operations are hampered due to increased scrutiny and monitoring. Regulators have reported that enterprises are struggling to make payments and even supply their products due to the outbreak. State-owned companies are also required to scrutinize their staff, especially those going abroad for projects to limit the spread of the virus. The article, therefore, supports a theory towards the acceleration of the concept of de-globalization.

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Analysis of the Articles

The two articles featured in this analysis revolve around the concept of globalization which is a critical aspect in international trade. The year 2020 has witnessed the scare of the outbreak of coronavirus which has led to the closure of borders affecting international business. The result is a negative implication on the concept of globalization. There are been decreased growth in various major economies in recent times. The case of coronavirus initiates a process where organizations have to rethink the overreliance of global distribution chains on China. Globalization as an international trade concept entails interactions across national borders and cultures which means interdependence in the production and supply chains. The containment measures that have been implemented due to coronavirus translate to disruption of global production and supply chains.

It is evident that the outbreak of coronavirus has implications for globalization and hence international business. It is therefore important to examine the specific implications. First, China's growth and development might reduce due to the closure of industries and limited movement of people due to quarantine measures. Over the years, China has sought to project its power in Asia and beyond and has made substantial steps. Developed economies such as the United States have been reliant on China in the production of goods due to cheap labor. The changes resulting in the destabilization in China might change this balance of power. Second, the possible de-globalization by coronavirus has negative impacts on international trade. For instance, China's economic growth is declining, resulting in a reduction in global oil demand. The closure of factories means the global supply chain is affected, which has affected companies such as Nissan and Apple. Thirdly, China has been able to leverage the concept of a comparative advantage since its manufacturing process is done efficiently and inexpensively compared to other countries due to its lower labor costs. From this perspective, globalization has had positive impacts through comparative advantage. For instance, there is a provision of jobs and capital investment for developing nations. The result has been development in job growth, provision of quality education, and infrastructure improvements. The effects of negative implications of coronavirus might affect the ability of China to benefit from the comparative advantage it possesses.

It can be summarized that the changes being experienced in China might reduce globalization. The result is de-globalization in which there is reduced relationship and integration between various entities in the international business context. It is evidenced by a reduction in the use of global supply chains where organizations seek alternative means of producing goods and services.

The Reaction to the Articles

The outbreak of coronavirus may potentially become a global pandemic after confirmed cases are reported in more than 50 countries. The most affected country is China, which means there are great global implications and especially in the international business context. My opinion is that the unfolding implications might be accelerating factors toward a de-globalized world. There are increased quarantine measures, which means restrictions of movement across borders. Industries in China are being closed down, which means the slow movement of products for organizations that outsource manufacturing activities in China. After from coronavirus outbreak, other issues are pushing for de-globalization, such as the US-China tensions, nationalism agendas in Europe, and the recent case of Brexit. I, however, do not think organizations are prepared for de-globalization. Global corporations would have to restructure to accommodate decreased interdependence and integration. I would foresee some risks that come with de-globalization. First, there would be increased exposure to emerging markets to de-globalization policies. Second, large global corporations involved in the complex global value chain would be harshly impacted. Thirdly, there would be increased volatility in international growth. The end of the globalized system would mean an increase in complicated corporate finance and regulatory systems, making it harder to do business across borders.

References

Kempe, F. (2020, February 22). Investors need to wake up and face the warning signs in the global economy. https://www.cnbc.com/2020/02/21/investors-need-to-face-the-warning-signs-in-the-global-economy.html?&qsearchterm=globalization

Zhang, L., & Lee, S. Y. (2020, February 18). China regulator says an epidemic's impact on industry 'major' in February. https://www.reuters.com/article/us-china-health-sasac-newser/china-regulator-says-epidemics-impact-on-industry-major-in-february-idUSKBN20C076