The Division of Labor Amid Economic Globalization
The global division of labor is the natural result of industrial development in an open world economy. This outcome leads to industrial transfers-- or shifts and greater efficiency，though this process accompanied by painful economic restructuring. Economic reorganization allows multinational corporations to allocate resources on a global scale，maximize their profits and keep investment and operational risks at the lowest possible level.
The speed and extent of globalization has been hastened by a combination of factors including trade liberalization，investment facilitation，financial internationalization and even information technology. New corporate heavyweights have emerged and joined the ranks of older multinationals. These companies have been able to take advantage of their dominant position in value chains，supply chains and technological innovation. They play a crucial role in determining the pattern of the global division of labor of the future.
New Features of Globalization
Since the financial crisis，the joint efforts of scientific and technological innovation as well as industrial and structural reform have brought new features to economic globalization. New patterns in the global industrial division of labor and industrial transfer have emerged as a result.
Asia has become the most active region for international industrial transfers. Since the financial crisis，economic dynamism has shifted from developed economies to a joint effort between developed and developing economies.
The drawbacks of globalization – job losses，stagnant wages and other economic dislocations -- have jolted some segments of the advanced economies such as the United States，Europe and Japan，and this has affected the political landscape. In the US，the Trump administration has loudly proclaimed its policy of “America first” – even at the expense of Washington’s closest allies. This has provoked trade frictions and inflicted serious damage to the framework of global economic governance. The UK has similarly turned to populism as the answer to its economic and social ills. Today，it is still grappling with the complex reality of its Brexit vote – an electoral choice that has dealt a stinging blow to European integration.
Meanwhile，Japan continues to see friction in its trade and political relations with South Korea. By contrast，China，India and ASEAN，have become positive forces for globalization，and they continue to improve their business environment through internal reforms.
According to the World Bank’s Business Environment Report 2020 released in October 2019，Asian economies - Singapore，China’s Hong Kong，South Korea and China’s Taiwan -- ranked second，third，fifth and 15th，respectively，in terms of providing a conducive place for business development. New Zealand led the pack but Australia and Japan were 14th and 29th，respectively. China ranked 31st though it had the most significant improvement in its business environment.
A new round of division of labor for global industry and international industrial transfer is also concentrated in East Asia，Southeast Asia and South Asia. The World Investment Report 2019，released by the United Nations Conference on Trade and Development in June，shows that despite a sharp contraction in global cross-border investment over the past three years，developing Asian economies have continued to attract foreign investment at record levels，accounting for 39.5% of global foreign investment in 2018.
There also is considerable room for Asian economies to benefit from further industrial transfers. Currently，opposition to globalization from developed economies reflects dissatisfaction with the distribution of globalization’s benefits. In fact，these economies have been the leaders of globalization in the past，with the highest levels of openness. These economies also hope that dynamic developing economies in Asia will open their markets further.
According to World Trade Organization statistics，the US，Japan and Europe had commitments to attain average tariffs of 3.45%，4.74% and 5.1%，respectively，in 2018. Their actual tariff levels were close to the targets at 3.45%，4.36% and 5.23%. For Switzerland and Singapore，their committed tariff levels in 2018 were 8.21% and 9.54%，and their actual tariff levels were 6.61% and 0.02%.
In contrast，China，Vietnam，South Korea，Indonesia and India committed to meeting tariff levels of 10%，11.9%，16.48%，37.13% and 50.8%，respectively. Their actual tariff levels came in lower than their target at 7.5%，9.51%，13.73%，8.06% and 17.14%，respectively. Nonetheless，compared with developed economies，Asia’s developing economies still lagged far behind in terms of the degree of openness. Their potential for utilizing foreign capital and undertaking international industrial transfers remains huge.
Although growth has been particularly noticeable in China，the average profit margin of the nation’s Fortune 500 companies in 2019 was only 5.3%，which was significantly lower than the 7.7% for US corporations and the global average of 6.6%. China’s 9.9% average return on equity was markedly lower than the 15% in the US and the global average of 12.1%.
China's Changing Global Position
Since joining the WTO nearly two decades ago，China has changed from a passive receiver of industrial trends to an important force in the international division of labor and industrial transfers. It has been constantly bringing new vitality to the global economy and has become a foundation for economic prosperity and stability in Asia.
China has long been a popular destination for cross-border investment and industrial transfers. As the largest developing economy，China has stable institutional policies，a huge market，high levels of consumer demand，and reliable infrastructure. These advantages，coupled with continuous economic vitality unleashed by the reform and opening program，have made China a hot destination for cross-border investment.
As a result of the US Federal Reserve’s monetary policy adjustments and the Trump administration’s tax cuts，global cross-border investment contracted sharply for the third year in a row in 2018. Investment fell from US$2.0 trillion in 2015 to US$1.3 trillion in 2018. The decline in 2018 from the previous year was 13%.
Despite the global contraction in investment，China’s actual foreign direct investment rose 3% to US$139 billion in 2018. Statistics from the Ministry of Commerce show that in the first three quarters of 2019，China actually absorbed US$100.87 billion in foreign investment，阅读全部文章，请登录数字版阅读账户。 没有账户？ 立即购买数字版杂志