The neoliberalism. It can be seen that neoliberalism plays

The
concept of globalisation had been widely explored by academia, especially by
social scientists, from the 1990s onwards after emerging within the financial
and business publications in the 1980s (Ampuja, 2015). The phenomenon of
neoliberalism is often used by many authors especially those who are critical
about the intent and the exploitive outcome of neoliberalism to explore the
nature of globalisation. Harvey (2005) argues that from the 1970s onwards,
neoliberalism started to become the mainstream of political economic practices
and states began to withdraw from social provision. In addition, Litonjua
(2008, p.254) suggests that globalisation is “promoted by the ideology of
neoliberalism, the goal is a wholly deregulated global market society”. They suggest
that the process of globalisation requires a neoliberalised global market and
globalisation is a product of neoliberalism. It can be seen that neoliberalism
plays an important role in creating the phenomenon of globalisation from their
perspectives. However, some other authors suggest that instead of being a
fundamental causation, globalisation should be viewed as a separate phenomenon
from neoliberalism (Wikan, 2015). This essay attempts to critically discuss the
relationship between neoliberalism and globalisation with reference to a case
study of ‘neoliberalism’ in China’s reform and a case study of foreign direct investment.
Firstly, the phenomenon of neoliberalism and globalisation and their possible
relationship will be explained and explored. Case studies of China’s reform and
foreign direct investment will be used to argue that there is no causality
between neoliberalism and globalisation.

Concepts of
neoliberalism and globalisation

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There
are controversies in the elusive meaning and form of neoliberalism and Wu
(2010) summarises that firstly it could be either an ideology and practices; it
involves either “rolling-back” and “rolling-out” of the state; it could be in
the scale of either local and national; it should be also distinguished between
means and ends. Therefore, as a sophisticated concept, neoliberalism should be
re-evaluated in terms of the relation to globalisation. To define neoliberalism
in terms of being an ideology, Marxist geographer David Harvey (2005, p. 2)
suggests that neoliberalism is a theory that proposes that “human well-being
can best be advanced by liberating individual entrepreneurial freedoms and skills
within an institutional framework characterized by strong private property
rights, free markets, and free trade”. Moreover, in practice, neoliberalism
promotes minimising government intervention and deregulation of trade and
finance (Kelly and Prokhovnik, 2004). However, Harvey (2005) critically argues
that neoliberalism can be also interpreted as a political hegemonic project to
reinforce the power of elites through the process of capital accumulation. The
reinforcement of power can be achieved through neoliberal practices because
neoliberalism is a doctrine that favours privatising state-owned enterprises
such as health care, education and public utility (Wills, 2005).

Globalisation
refers to “the economic, political, social and cultural processes whereby:
places across the globe are increasingly interconnected; social relations and
economic transactions increasingly occur at the intercontinental scale; and the
globe itself comes to be a recognisable geographical entity” (Wills, 2005, p.
573). This definition explores the nature of increasing connectedness across different
regions on a global scale under the process of globalisation and multiple
aspects of globalisation. However, it is clear that the ‘phenomenon of
neoliberalism’ should be analysed within the context of globalisation in
political and economic form and so does this essay. Global capital flow, trade
of goods and services as well as the advancement of technologies were
considered as key features of economic globalisation (Gao, 2000). Authors who
suggest a correlation between neoliberalism and globalisation often develop
their arguments alongside with those features. For example, competition and the
free mobility of capital in different aspects and different scales are seen as beneficial
from a neoliberal perspective (Kotz, 2002; Harvey, 2005). Thus, they suggest
that the success of economic globalisation relies on deregulations of the
market by states to attract the inflow of capital and investment globally. However,
Wills (2005) suggests that historically, the process of globalisation has been
happening for hundreds of years and the scale and extent of the outcome in the
contemporary world seems to be qualitatively different compared to the outcome
of the past, which make us think it is a new phenomenon and it might relate to
the phenomenon of neoliberalism.

‘neoliberalism’ in
China’s reform

As a hotspot of foreign
direct investment and exports of commodities, China is undoubtedly a key player
in economic globalisation. As Zheng (2004, p. 2) suggests, “the tide of
globalization became irreversible” after capitalism had been legitimised in
China. China’s reform towards a market-oriented economy took place from 1978
when the Chinese Communist Party started to promote a ‘socialist market economy’
in China (Nonini, 2008). Lee and Zhu (2006) point out that the economic reform
of China can be viewed as a form of neoliberal practice. Moreover, China was
used as an example by Harvey (2005) in his work A Brief History of Neoliberalism to demonstrate the negative impact
of neoliberal practices. It can be seen that both of them suggest the open-up
and globalisation of Chinese market are strongly relative to a neoliberal
transition within the country. For instance, the emergence of small and
medium-sized enterprises, the reduction of tariffs, the opening-up for foreign
direct investment and the establishment of an exports focus economy could be
considered as an evidence of neoliberal transition (Breslin, 2007). This is similar
to the neoliberal policies introduced by Margaret Thatcher attempt to attract
an influx of foreign investment (Harvey, 2005). In order to attract foreign
direct investment, a good infrastructure is considered to be necessary (Asiedu,
2006). As a consequence, China has been investing in building infrastructure
for decades and the state is applying its power for trying to stimulate the
economy, by providing a decent environment for investment.