Economic globalization and the sustainable use of resources

Economic globalization and the rapid growth of a global value chain have meant that resource allocation issues transcend global boundaries. The sustainable use of resources has become an issue of global concern. The rise of emerging economies as a whole has reshaped the map of the world’s economy, as it moves into an era of ‘modernization of the majority’ as opposed to ‘modernization of a minority.’ This histoiic advance relies, however, on the safeguarding of global resources. It relies on more equitable and inclusive systems of resource allocation and resource governance at the global level. China is the world’s largest developing country and its largest emerging economy. As such, it not only pursues a strategy of resource globalization and participates in global resource allocation and governance, but it also seeks to play an active and positive role. The country will increasingly have a profound impact on the world’s sustainable development.

Global allocation of resources

Global allocation of resources improves the efficiency with which resources are used

The distribution of mineral resources around the world is extremely uneven, and countries with large populations and economies often have trouble getting a sufficient supply from domestic sources. They require the safeguards provided by international markets. In structural terms, the globe is highly irregular when it comes to resource distribution, with the great majoiity of minerals concentrated in a minority of countries. The spatial distribution of global resources, in general, is irregular, while levels of economic development and technological progress are different among various countries so that the phenomenon of extremely unbalanced use of mineral resources across various regions is obvious. The classic resource exporters include Australia. Russia, the Middle East, and Africa. These areas are rich in mineral deposits, their own domestic demand is fairly low, and the degree of difficulty in extracting resources is low. Japan, on the other hand, has an extreme shortage of mineral resources relative to its abundant need for them. It is a classic resource impoxter. Although both China and the United States have substantial mineral resources, they also have large economies and populations and high levels of industrialization. Then resource requirements have increased rapidly to the extent that they must import large quantities of mineral resources every year. The primary areas into which mineral resources flow are the United States, China, Japan, and the European Union. These areas also require a tremendous diversity of resources and in massive quantities.

The trend toward economic globalization has become ever more obvious and has accelerated since the 1990s. The scale of the cross-border trade in products, sendees, and technologies has grown in tandem with the flow of capital and the movement of people. All factors are exhibiting large-scale cross-border movement. At a global level, this has increased the efficiency with which resources are allocated and has contributed to ongoing increases in the world’s prosperity. All countries who participate actively in globalization can alleviate the problems of their own resource endowments as they allocate resources on a global scale. Taking thorough advantage of a country’s own relative advantages helps sustain fast economic growth. The movement of cross-border resources also drives trade and investment in resources - resource-requiring countries participate in the resource production chains of exporting countries through international investment, which provides funding, personnel, and advanced technologies. This improves the overall efficiency with which resources are developed. Global allocation of resources spurs the application of advanced technologies, encourages effective competition, and improves the efficiency with which global resources are used (see Figure 5.1).

The global allocation of resources has meant that the issue of sustainable use of resources has also transcended national boundaries. It no longer is a matter that can be dealt with by a single country. The processes of developing, using, and recycling resources are now embedded in the global value chain of production. The impact all this has on ecosystems is also of a global nature, which is why sustainable development has become such a concern to humankind as a whole. Meanwhile, the benefits brought about by globalization are distributed highly unevenly among countries as well as groups of people that participate in the process. The rights and interests of some gr oups of people are being damaged to the extent that they are firmly opposed to globalization. Voices and forces opposed to globalization have always existed, but they have now become the main risk factors that impact the global allocation of resources and that prevent the smooth functioning of the global production chain of resources. The greatest global challenge that sustainable use of resources faces relates to whether the benefits of resource development can be reasonably distributed among people. The benefits that currently accrue to places that expoxt resources are fairly low in the entire production chain of resource development. This has the effect of making people oppose and resist foreign investment. Benefits that these places receive must not only cover the direct costs of developing the resources but must provide adequate compensation for restoring damage done to ecological environments. Even more important, they must include enough investment in local human capital that local economies can continue to develop once resources are exhausted. If we are to realize the goal of sustainable use of resources, we must make sure that the sources of resource supply also have a path of sustainable development.

Global h ade ill resources

Figure 5.1 Global h ade ill resources

Source: Exploring Interdependencies in global resource hade. Chatham House, the Royal Institute of International Affairs.

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