As a result, our group chose the topic "The impact of globalization on countries today and the competitiveness of Vietnam's market economy in the process of globalization" as an essay to
Trang 2UEH UNIVERSITY CELG
SCHOOL OF Economics INTRODUCTION TO MICROECONOMICS
1.Lé Dao Trung Hau Part I 90%
3 Nguyễn Hữu Khang Part III 80%
4 Dang Tuong Vi Part IV 100%
your group has any problem, please discuss with the course lecturer Signatures:
Date Submitted: 11/03/2023
Trang 3INTRODUCTION
Globalization is an objective process that has, is, and will continue to have a considerable influence
and impact on the domains through which it travels in our globe, including governments Globalization is not a new phenomena; in fact, it began in the 15th century and accelerated in the late 19th century There are still differing perspectives on the origins and characteristics of the globalization process Others claim that when the Turks acquired control of the Silk Road, globalization started Others believe that the process began with the crossing of the oceans around the Cape of Good Hope and the discovery of the Americas, which widened the world and transported riches from other continents to Europe Current globalization is referred to as capitalist globalization by certain experts Since that process is heavily influenced by capitalist countries, particularly large capitalist ones
Globalization now has a profound influence on nationalities, the social life of the entire human
society, and the lives of individuals As a result, despite differing viewpoints, globalization is an unavoidable and increasing trend that every nation and nation-state must confront As a result, our group chose the topic "The impact of globalization on countries today and the competitiveness of Vietnam's market economy in the process of globalization" as an essay topic
Theme: The impact of globalization on countries today and the competitiveness of vietnam's market economy in the process of globalization
Trang 41) Lower Costs for Products
2) Access to New Markets
3) Higher Standards of Living Across the Globe
4) The spread of innovation
IV The Negative Effect of Globalization 1 Intense competition in markets
3 Disproportionate Growth: Exploitation of underdeveloped countrÏes ‹+- 4 Currency fluctuation
V Globalization and competitiveness of the Vietnamese economy today
1 Impact of economic globalization on international competition .<<<<5s2
2 About some issues related to Vietnam
3 Vietnam's obstacles in the process of globalization
a Practical problems
b Regarding the macro environment
c Increasing cultural challenges
d Challenges of independence and self-control, especially in the economic field
4 To enhance the competitiveness of the Vietnamese economy
a Awareness
b Quickly establish preconditions for competition policy
c Promote research and implementation of internationalization of competition polïcy 10
Trang 5I The definition of globalization:
Globalization can be understood as the strongly increasing of the linking in relationship between countries around the world create changes in society and economy
The reasons are the impact of trade in general and free trade in particular; development of technology; influence of large multinational companies and improved communication, 1 Characteristic of globalization:
On economic side: The increasing of international commerce is at a rate higher than the world economic growth, increasing the world market share of multinational corporations, motivating free trade and develop financial systems.-On cultural side: Increasing the interaction between cultures around the world like publishing, books and movies to others countries, Increasing international
travel and tourism
On technology side: The increasing of information and data cross border by using technologies such as the Internet, satellites and phones, development of global telecommunication
On political side: increasing the role of international organizations such as WTO, WIPO, IMF, On juridical side: stricter the intellectual property and copyright issue, changing and creating new law
2 How is it important?
Globalization removes the barrier between countries (geography, language, .) help them easier to communicate and coroporate
Globalization creates chances to expand and develop because it increases the international
competition Countries will become more creative, more innovative to beat other rivals.III
Advantages and disadvantages of globalization: 3 Advantages of globalization:
Alteration of Technology: Technology have developed and change in a huge extent and open the way for general development The strong relationship between countries make countries can share or borrow their technology with others
Better Services and GDP Growth Rate: Globalization always provides better services to everyone As a result of developed technology, services such as water supply, networking, electricity supply, internet, and other services have become easier to approach
Trang 6Improvement of Infrastructure: The economic growth motivates the develop of infrastructure so that governments can deliver their services to the people more efficiently owing to the advancement of
infrastructure
Affordable Commodities: Thanks to the technology, people can produce goods easier and faster so that they can provide products at affordable prices Globalization also create the competition between sellers and make them lower the prices or follow a pricing strategy
Extensions of Market: Globalization extend the markets to motivate free trade This will create a beneficial chance for corporations to move out and work in international environment 4, Disadvantages of globalization:
Rising Inequality: Because it increases specialization and trade The trade boost of the per-capita income which lead to poverty
Growing Unemployment rate: Because it requires the employees with expert skill so the the unemployment will dramatically increase in the countries that unable to provide high quality employees
Imbalanced Trades: Free trade causes the imbalance in the ratio between export and import of commodities and services Over the years, imbalance trades have increased in developed countries because of competition in the market
Environmental Harm: Globalization support the growth of industrialization which is one of reasons for the pollution
5 The definition of competitive factors:
Competitive factors are the skills and abilities that make you different from other competitors These are the essential conditions to any strategy, competitive factors need to be identified and evaluated about their relative importance to achieve the company’s goal
II Competitive factors in globalization Firstly, questions about cognitive
There are still many debates on integration, particularly at the strategic level of research and policy development The fact that particular difficulties with coherence remain unanswered is connected to one overarching question: How rapidly should globalization take place? Do we distinguish between the process of developing the laws needed for a modern market economy and globalization? Which integration strategy should be used: participation in regional, bilateral, and multilateral agreements; unilateral globalization; or a mix of these factors? What policies should be put in place to foster international trade and investment while maximizing gains and minimizing risks? etc
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Trang 7Second, the actual questions can appear in a series of competitiveness comparisons Considering export and tourist competitiveness (including total service export turnover, export turnover per capita, increase in export turnover per capita, and revenue from tourism per capita): As of the middle of 2003, Vietnam's metal exports only represented around 45% of its GDP, a weak Asian average level Thailand is represented by 55% of the ratio, Singapore by 152%, Malaysia by 114%, and China by 22% Vietnam imported US $ 1.2 billion in 2001, which was 8% of exports, 3 billion in 2002, which was equivalent to 18% of exports, and up to 4.5 billion in 2003 (according to fantastic data, the biggest year ever), which was equal to 23% of export and 11% of GDP Regarding the competitiveness of investment (as measured by the indicators of completed
investment, total private fixed investment, total increase in domestic investment, and pure foreign
investment as measured by the total number of investments): Although Vietnam's total domestic investment is higher than the ASEAN average of 23-24%, foreign direct investment (FDI) is
substantially lower than in several water print areas, such as AS China, Thai-Lan, Malaysia, and
Singapore Vietnam's investment rate for growth (ICOR) increased quickly and at a high level; in 1995, a growth of VND 3.4 was needed; in 2001, more than 5 dong were required; and in 2002— 2003, there was no change
Regarding the macro environment (including the numbers: Month, the budget, the total trade, the import tax, the revenue from privatization): Most of the macro indicators of Vietnam are evaluated At the average, the import tax 1s still 26% - too high compared to the WTO requirements (from 13 to 15%)
In terms of science and technology competitiveness (encompassing metrics such as the number of applied technological advancements, the proportion of engineers and scientists to the total population, and the overall spending on research and development): Vietnam scored very poorly in the World Economic Forum's assessment of technological advancement Until the end of 2003, there were still no practical mechanisms to link science - technology with production and business; science - technology market has not yet formed Scientific and technological research activities still rely mainly on the state budget It is not clear to distinguish basic research activities that need to be funded by the State with applied research activities in which research products must become commodities and are funded by users of those products The business environment and development have little regard for quality and still have many subsidized factors, so they have not created the motivation and pressure to force all businesses to take care of technological innovation, to seek scientific and technological facilities technology
Trang 8Information and communication technology (containing metrics such as the ratio of personal computers to people per 1,000, the number of internet subscribers, the cost of domestic and international calls, and the level of readiness for the demise of the electrical industry ): Vietnam's information technology has grown relatively quickly in recent years compared to earlier years; Vietnam, however, continues to be ranked poorly by the World Economic Forum in terms of information and communication technology since it is not prepared for e-business in comparison to ASEAN nations and particularly wealthy countries The average cost of domestic and international
calls is still expensive, as well as email usage
In terms of human resources (including brain drain abroad, the illiteracy rate, the female labor rate, the illiteracy rate in the age group, and the rate of not entering high school): Vietnam Men only have a weak average level of human resources in 2003, ranking 3.79/10 - the last among 13 countries in the region; more concerningly, English proficiency and access to high technology are
still at the bottom of the chart
III Positive effects of globalization
Since after the Second World War, globalization has been a manifest and irreversible trend of
human civilization The significant achievements in scientific development during and after the war, alongside the decolonization process have allowed globalization to happen not only in the Western world but also in the former colonies and the third world Globalization has many positive effects
on people around the world, in terms of culture, politics and society
1) Lower Costs for Products
No field is more affected by globalization than the economy The most basic display of globalization is the extensive trade and commerce between each nation Each nation has its own advantages over the others, trade and commerce encourages countries to specialize production of what has the lowest opportunity cost, known as comparative advantage The specialized production is the basis for mass production which makes the products become more abundant and cost less to buy We could see the impact of mass production on price from Ford Thanks to mass production, their cars became kind of product the general public could afford, rather than a luxury item that only a limited number of people had access to Since then, Ford’s concept of time- and space- efficient production has been adopted by most industries, lowering the costs of everyday items The consumers benefit, they can access better quality, better price products and have more alternatives to choose from
2) Access to New Markets
Globalization creates a more competitive environment for companies around the world thanks to the expansion of the market This allows companies from developed countries to gain a great deal from
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Trang 9globalization, including new customers and diverse revenue streams, they could invest in constructing factories and researching, and hire staff in developing countries in order to save cost Samsung is a Korean multi-industry company famous for its top quality smartphone and other electronic devices, it expanded to Vietnam in 2005 and has become one of the biggest foreign investors in this country with a total 18 billion dollars investment and 74.2 billion dollars revenue in 2021 Globalization is also an opportunity for upstart companies and corporations from the developing countries to thrive and even compete with long-standing names from the developed countries Tencent used to be a small Chinese technology company founded in 1998, it had taken advantage of Open Door Policy during that time to learn from foreign companies and create its own online services In just 15 years, Tencent didn’t only become the biggest game developer in China but also the world
3) Higher Standards of Living Across the Globe
As mentioned before, foreign companies prefer to recruit workers in less developed countries, this generally adds more job availability to these countries On a larger scale, globalization dramatically boosts the national economy and therefore raises the living standards, especially for people from developing countries Before Doi Moi era, Vietnam was the one of the poorest countries on earth with GDP per capita of just 235.7 USD and life expectancy at birth was around 68 according to The World Bank’s data in 1985 After 36 years of opening the economy, GDP per capita rose to 3756.5
USD and life expectancy also rose to around 75, Vietnam, from a backwater country devastated by
war, has become a low and middle income country with poverty rate of only 6,7% 4) The spread of innovation
As a result of broad commerce and competitive marketplaces, new technology, innovation and ideas were swiftly born and spread around the world The diffusion of innovation is highly influential to emerging market economies, which have made growing use of the accessible foreign knowledge and technology to increase their innovation capacity and labor productivity development For example, knowledge transfers from technology leaders may have provided around 0.7 percentage point of labor productivity increase each year for an average country-sector from 2004 to 2014 This accounts for around 40% of the reported average productivity gain One key driver of emerging market economies' increased innovation capacity has been their growing involvement in global supply chains with multinational corporations, though not all companies have benefited because multinationals sometimes redistribute some innovation activity to other parts of the global
value chain
Trang 10IV The Negative Effect of Globalization 1 Intense competition in markets
Negative effect on local markets: Smaller and more vulnerable businesses in developing countries have less chance to compete with larger corporations; leading to large companies’ monopoly on
market shares
For example, Chuong Duong corp used to be the market leader in the soft drink market in Viet Nam They did well with their products and were the Vietnamese’s favorite until the appearance of multinational businesses like Coca-Cola and Pepsi When Coca-Cola and Pepsi entered Vietnam respectively, many domestic and foreign soft drink brands also appeared and caused fierce competition The market shares, once dominated by Chuong Duong, now belong to other
businesses
The gap between large corporations and small/medium companies is getting bigger Small businesses have a decreasing likelihood of growing to be huge and successful whereas giant organizations are more likely to keep their dominant positions in markets
2 Employment problems
Between big countries’ employees and developing countries’ employees
dropped dramatically since 1999 (source: Labor Department, Haver Analytics)
The drop in U.S manufacturing jobs started
after 2001, the same time China joined WTO, shows
that globalization has greatly impacted domestic jobs in America Manufacturing goods in nations like China is more affordable due to the availability of inexpensive labor and supplies overseas Millions of jobs in the United States have been lost as a result of this change in manufacturing
The administration of President Trump is trying to impose protective tariffs on goods imported into the United States from China in an effort to counteract this economic shift resulting in a trade conflict between China and the United States In intense scenarios, globalization can bring out the aggressive attempt of many countries in order to preserve their economy
Between the more educated and less educated members of a society