Business, International Relations and the Political Economy
Assignment Brief
Business, International Relations and the Political Economy
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Module 1: The evolution of globalisation
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Module 2: Business, production, and investment in the global economy
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Module 3: Governing the global system
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Module 4: Global power shifts
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Module 5: Contesting globalisation
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Module 6: Conflict and instability
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Module 7: Responding to disruptive forces
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Module 8: Corporate responses to a changing global environment
Sample Answer
The Evolution of Globalisation and Global Power Shifts
Introduction
Globalisation has transformed how nations, businesses, and individuals interact across borders. It refers to the growing interconnection of economies, cultures, and political systems through trade, technology, and communication. Over the past century, this process has not only reshaped global commerce but also shifted power among nations. What began as an economic trend has evolved into a complex system influencing politics, security, and international relations. This essay examines the evolution of globalisation and how it has contributed to significant global power shifts, particularly between Western powers and emerging economies such as China and India. It also considers the role of multinational corporations and global institutions in shaping the balance of power in the modern world.
The Evolution of Globalisation
Globalisation has deep historical roots, but its modern form began during the 19th century when industrialisation and colonialism expanded international trade. According to O’Rourke and Williamson (2002), the first wave of globalisation (1870–1914) was driven by advances in transportation, such as steamships and railways, which reduced costs and connected markets across continents. The British Empire dominated this period, acting as the main hub of trade and finance. However, the outbreak of World War I and the Great Depression disrupted this early integration.
The second wave began after World War II with the creation of international institutions like the International Monetary Fund (IMF), the World Bank, and the General Agreement on Tariffs and Trade (GATT), later replaced by the World Trade Organization (WTO). These institutions aimed to rebuild war-torn economies and promote free trade. Helleiner (2019) notes that the United States became the central power in this era, establishing the dollar as the global reserve currency and promoting a liberal world order based on open markets.
The late 20th and early 21st centuries marked the third wave of globalisation, powered by technology, communication, and global supply chains. The digital revolution, the fall of the Soviet Union, and China’s economic reforms under Deng Xiaoping in the late 1970s created a new era of global integration. Companies could now outsource production across borders, leading to the rise of global value chains. According to Baldwin (2016), this period was defined by the “great convergence,” where developing countries began catching up with advanced economies by integrating into global trade networks.
However, globalisation has also faced growing resistance. The 2008 financial crisis, rising inequality, and nationalist movements have challenged the idea that open markets always benefit everyone. As Rodrik (2011) argues, globalisation without adequate domestic safeguards can lead to social tensions, economic insecurity, and political backlash. The COVID-19 pandemic further exposed vulnerabilities in global supply chains and highlighted the dependence of nations on each other for essential goods.
Global Power Shifts in the Modern Era
One of the most visible consequences of globalisation has been the shift of economic power from the West to the East. In the decades after World War II, the United States and Western Europe dominated the global economy, accounting for most of the world’s industrial output and financial power. However, the rapid growth of emerging economies, particularly China and India, has rebalanced this dominance.
China’s transformation is perhaps the most striking example of a power shift. Since joining the WTO in 2001, China has become the world’s largest exporter and the second-largest economy. Its Belt and Road Initiative (BRI), launched in 2013, demonstrates its ambitions to extend economic influence across Asia, Africa, and Europe through infrastructure investments. According to Callahan (2016), the BRI represents not only an economic project but also a strategic attempt to reshape global governance and reduce dependence on Western-led institutions.
Similarly, India has emerged as a key player in the digital economy and service industries. With its large population and technological capacity, it has become an essential partner for both Western and Asian powers. Together, China and India represent a fundamental reordering of global power structures, shifting influence away from traditional Western centres such as London, New York, and Brussels.
The power shift is not purely economic. Institutions like the G7, once the core of global decision-making, now share influence with the G20, which includes emerging economies. The rise of regional organisations, such as the Association of Southeast Asian Nations (ASEAN) and the African Union (AU), reflects a more multipolar world where power is distributed among multiple actors rather than concentrated in the West.
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