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  How Economic Globalization and Internet Economy Support Each Other
  
29th December 2014
  
  In modern society, economic globalization and the Internet economy are the strong support for each other and more methods to promote both are waiting to be found. Suppose 10 years later, after you finish the work and go home, you sit in the front of a computer, and go through all kinds of websites to pick up the products you want. Half an hour later, you pay the deposit and wait the products from German, England and Australia to be sent to your house. This story is very likely to happen in the near future. Internet develops very quickly in recent decades, and due to the development, trades in Internet are no longer unusual things, but gradually becomes normal. With these changes in the international environment, the relations between the Internet economy and economic globalization also change, and need to be reconsidered now.


  Firstly, the Internet economy needs economic globalization to develop itself. When economic globalization develops, it can help Internet economy develop in a large degree. To have a better understanding of economic globalization, we firstly see the definition given by Ezcurra, Roberto and Rodríguez-Pose, Andrés in 2003. “Economic globalization, representing the main unavoidable trend in today’s world, refers to the world economic activities beyond the borders, and makes globe form a whole through foreign trades and mutual connections.” Since the fast development of global communications nowadays, new approaches to international business are urged for the new situations. Among all of the various methods, Internet is the most important one. Reasons for such positive effects contain three points, which are beneficial environment, development of IT industry and implications of economic theories. Globalization provides a better environment for Internet economy, with numerous big markets overseas and more connections between different areas. Trades involved in different countries cannot all be done face-to-face with the long distance. Therefore, interregional communication ways are greatly needed. As a result, electronic transactions become more and more popular, and the popularity, which means more and more businessmen recognizes the Internet, in turn develops Internet economy. It is really a positive cycle. Also, economic globalization benefits Internet economy by providing advanced technology in computers and theories in economies. Since the resources and workers flow more quickly with globalization, a country’s advanced technology is not limited in this nation any more. For example, America have developed quickly in software and computer programming since the 20th century, and other countries, such as China, Japan and so on, could learn from America and develop their own technology by buying American products or hiring American employees. Then, the whole world could develop more quickly in this industry over time, and Internet makes great progress in an unexpected high speed, which will certainly promotes Internet economy. And also, communications between nations can speed up the raise of new economic theories in the background of globalization. And Internet economy is very likely to be involved in these theories because it’s great effects on world’s current economy, and this means more people will then recognize the importance of it.


  Secondly, economic globalization needs the support of the Internet economy. The reasons are involved all kinds of aspects in societies, among which the following three are the most important: the improvement of global communications, competitions and balances between developing and developed countries. The same idea is represented by the news given by Weijia Dong in this November, Hucheng Gao: The minister of Chinese Ministry of Commerce, said at a press conference that having experienced the financial crisis, economic globalization was still in the rapid development in these days and now it also had a new strong support, which referred to the Internet economy. Internet economy is an advanced form based on the traditional economy, promoting by modern information technology through computers. Just like Hucheng Gao said, it provides more efficient methods for the world to connect each other to do business and trades between countries. And meanwhile, it shows more companies in one industry for customers, causing competitions clearer and fiercer. Competitions will pick up companies who have good performances and inspire other companies to make larger progress, which improves the average quality level of the whole industry in the end. To some degree, competitions develop economic globalization and promote international products at the same time. As Kogut said in the paper, “The Global Internet Economy”, such effects are mostly reflected in the multinational corporations. Various aspects in the daily operations, such as capital and flows of goods, all rely on the Internet. For its convenience and fast speed, nowadays, money transactions are largely through Internet accounts in the international business field. Thanks to the convenience, foreigner customers are more willing to consume overseas rather than local, if the prices in other countries are lower. And at the same time, Internet provides a new platform to expand trades for those companies, and this means transactions between different countries are more and more popular, which is the most important feature of economic globalization. We can clearly see from it that with the development of the Internet economy, globalization also develops quickly. And also, for developed countries such as China, Internet economy helps them revolutionize the original products and enter new industries. It helps balance the developing countries and developed countries. Take China for example, with the rapid spread of Internet economy, China can shorten the gap in the technology applications as well as some other areas, and enter the new industries with lower costs and risks. As for the traditional industries in China, such as electricity and steel in heavy industry, finance and insurance in service, bikes and cars in manufacturing, the implication of Internet provides larger space for them to develop. Overseas market has great potential, and it is a very good opportunity for all these industries with such markets. Through the new industries and old industries developed, countries like China can have a deeper participation in economic globalization. As Potrafke, Niklas said in “The Evidence on Globalization”, “It’s obvious that Internet economy largely promotes the economic globalization.”


  Thirdly, there are many methods to make better use of economic globalization and Internet economy to benefit each other. Relations between the two things are closer and closer, considering the changes in environment, effective approaches should be discovered to promote both. For the aspect of Internet economy, improving the environment of network business is the most essential thing. Up to now, electronic trades are still based on individual behaviors, showing higher risks and lower credit. To ensure the safety of such kinds of trades, government can involve more and set up more legislation to regulate the whole Internet economic environment, especially in countries like China, where government plays a bigger part in the market. And a good social credit system is needed, recording the credits of all of enterprises, institutions, families and individual persons. Besides, improving the opening degree of the Internet markets is also very beneficial. A good example is set by China Telecom. China Telecom is busy in deepening the reform, to accelerate the combination of computer network, telephone network and cable TV network. Improving the opening level also means increasing the variety of the Internet economy, and helping economic globalization develop more quickly. What’s more, more investments on the Internet economy are encouraged. At present, although the Internet economy is recognized highly by most people, it still has a large space to be improved. More investments are needed, since it is still very young and greatly needs more support to grow stronger. As for the aspect of economic globalization, improvement of economic globalization mainly relies on the whole trend of globalization and the development of the whole economy. Promoting the reform of international rating system is one of the good ways to improve economic globalization. In 2012, according to the news given by Xichuan Wang, China, the USA, and Russia made a common agreement on the establishment of the world credit system, through the three companies, Chinese Dagong Global Credit Rating Co., Ltd, American Egan Jones Rating, and Russian credit Rating Firm. But in spite of the efforts, the system is not perfect up to now, and still needs to be improved. Besides, establishing or improving established institutions like WTO for more efficient cooperation between different countries is also a good way. In other aspects, balancing the resources and helping poor countries to catch the economic level of rich countries are also urged. Good balance in the world’s economy is not only beneficial to promote the cooperation with various countries, but also helpful to keep the long-run development of economic globalization and the Internet economy.
  Economic globalization and the Internet economy relate each other more and more in recent years. Making good use of one can certainly promote another, and the support they provide for each other is very essential for the world. In conclusion, economic globalization and the Internet economy needs each other to develop itself. And because of the importance of both economic globalization and Internet economy, more effective methods to improve both are waiting to be developed.
  (words:1521)
  
  
  
  
  
  Work Cited:
  “Economic Globalization and Industrial Pollution.” Chinese Journal of Population,Resources and Environment. March 2008.
  <http://www.cnki.com.cn/Article/CJFDTotal-CPRE200803007.htm>
  Ezcurra, Roberto & Rodríguez-Pose, Andrés. "Does Economic Globalization affect Regional Inequality? A Cross-country Analysis." World Development, Elsevier, vol. 52(C), pages 92-103. 2013. Print.
  Kogut, Bruce. “The Global Internet Economy.” Ideas. MIT Press Books. Volume 1. Edition 1. Print.
  Koske, Isabell, Rosamaria, Bitetti, Isabelle. Wanner & Sutherland, Ewan. “The Internet Economy - Regulatory Challenges and Practices.” OECD Economics Department Working Papers. Number 1171. 12 Nov 2014. Print.
  Potrafke, Niklas. “The Evidence on Globalization.” CESifo Working Paper Series. Number 4708. 2014. Print.
  Wang, Xinchuan. “China, USA and Russia Promoting the Reform of International Rating System.” Economy Daily. 25 October 2012. Print.
  Dong, Weijia. “Gao Hucheng: the Internet Economy Is The Strong Support of Economic Globalization.” International Online. 8 November 2014.
  < http://gb.cri.cn/45731/2014/11/08/3785s4759063.htm>
  “Speed Up the Development Strategy and Countermeasure of Economic Network.” South IT Network. 1 December 2003.
  < http://www.southcn.com/it/itzt/taojin/yanjiu/200312021179.htm>
  
 
 
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