Globalaffairs

Issue 3/June-July 2007
By Eva Díez Ajenjo

First of all, in order to analyse the impacts of the global division of labour it is essential to define the term division of labour. This term refers to ‘how people fit into the production process’ (O’Brien, p.198) and therefore how tasks are allocated to particular individuals or groups. Going further, there is an international division of labour which refers to a process whereby different countries specialize in particular things for export. But when globalization influences the division of labour, it appears the concept global division of labour which describes a form of organization present around the world, where the work is not confined by particular countries.

As for theories that tackle the division of labour in GPE, it is important to mention classical liberalism and Adam Smith. The Adam Smith’s argument is ‘the development of a division of labour within society generates a natural harmony of interests when the ‘invisible hand’ of market competition turns self-seeking individual behaviour into socially beneficial outcomes’ (Ravenhill, p.20). For Smith this division of labour increases productivity and it is implicit in human nature because humans are prone to trade. Moreover, liberals believed that the most advanced societies have the greatest division of labour therefore states have to support this division because it increases its productivity and thus its wealth.

A central idea of liberalism is that ‘the benefits of division of labour and liberal policies flowed down to the lowest members of society’ (O’Brien, p.201). However, this idea is arguable because as this paper argues below, currently the global division of labour has increased the gap in wage rates and it has displaced unskilled workers therefore its benefits are not equal and they do not flow down.

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Issue 2/ April-May 2007
By Javier Guerra

The present article aims to be a brief introduction to the Chinese financial system, structure and the features of a system that has experienced substantial changes in the last years; being the most radical change the total opening of the banking market in December 2006 in accordance with the agreements of China with the WTO.

History of the Chinese Bank

The banking sector in China began in 1948 when the People’s Bank of China was created. In 1949 the Bank of China was created, born from the People’s Bank of China that acts such as Central Bank of China. The Chinese banking system was a copy of the system of the old Soviet Union, a system of planned central economy, where private property does not exist. Following this premise, the Chinese government was reconstructing for three years private banks and other institutions left by the previous government (non-communist) led by Jiang Kai-shek. During the first five-year plan (1955-1959), the People’s Bank of China was gradually taking the control of private banks and private participations therefore they were gradually vanishing until disappearing absolutely.

Before 1978 the banking system was isolated from the world, international and financial markets. In 1978 a series of important structural reforms in China began resulting in substantial changes in the structure of the Chinese banking system.

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Issue 2 /April-May 2007
Manuel Silva Martinez

China´s real GDP growth reached 10.5% in 2006. China grows, China accumulates foreign reserves, China is the trading partner supplying large department stores in developed countries while leading its commercial diplomacy with the developing world. All these remark fall within common sense in today’s economic debate – and are exactly what Beijing wants to show the world. But, a few kilometres away from the airports, the skyscrapers and the neon lights stands a countryside that is hardly leaving behind decades of collectivization, and that observes the rise of the Kingdom of the Middle from behind the window-shopping, without feeling concerned.

150 million Chinese live on less than a dollar a day; but most poor people concentrate in the countryside. Peasants, two thirds of the 1.3 billion Chinese population, have an average disposable income of around 360 euros per year, three times less than their fellow urban residents. As for qualitative aspects, rural areas also lack of sufficient health and education facilities.

No one can however say that the Chinese economic policy has not paid attention to the countryside. Mao Zedong found himself faced to a mainly rural country, and the very first regulations after the People’s Republic was founded in 1949 were focused on increasing agricultural output and nurturing an industrial network allowing for a better life quality and the fixation of the population in order to reduce rural exodus in a context of booming birth rates. His successors, Deng Xiaoping, Jiang Zemin and now Hu Jintao, prolonged this reforming spirit. Between 1981 and 2000, these reforms helped around 400 million people nationwide come out of the state of poverty.

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Issue 1/February-March 2007
By Carolina Ferreiro Fajardo

Nowadays, the Fair Trade is the most viable initiative for the achievement of more equal commercial relations between producer and consumer. This activity is an alternative to international trade at global level and it has become an effective cooperation tool for eliminating poverty and exploitation in undeveloped countries.

We can state that the Fair Trade is a growing activity in Spain because it had a 17% increase in the last five years. Despite these data, Spain has long way to go because it is bottom of the league when it comes to fair products market.

According to the last statistics (2006) of the Fair Trade Yearbook in Spain carried out by the SETEM organization, the average spending in fair products is less than 350 euros per thousand inhabitants. This figure shows that the Fair Trade is a social accepted activity but not enough known especially if we compare it with the EU average where the average spending is 2,318 euros per thousand inhabitants. The Spanish regions with the highest rates of fair products sales are: Catalonia 35,5%, Madrid 20,3%, Galicia 15,5% and Andalucia 9,3%.

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