[MUSIC] China's embrace of globalization has been a key driver for its rapid economic growth. The port of Hong Kong, which you see behind me, is the fourth busiest port in the entire world. Following Shanghai, Singapore, and Shenzhen, the special economic zone located just across the border with mainland China. Also near the border in Guangdong Province is Dongguan City. The heart of the factory of the world, which produces many of the goods found in the containers you see here. 15% of all of China's exports pass through this port. And Hong Kong along with Taiwan and Macao account for nearly two-thirds of all of the foreign direct investment into mainland China. So it really is a gateway into China for trade and investment. In this module, we will study how globalization has impacted the Chinese economy, and helped catalyze economic growth. China is now the world's largest trading nation. It exports more goods than any other country in the world, and it imports more goods than all countries except for the United States. From the very outset of economic reform, Deng Xiaoping embraced globalization as providing valuable opportunities to support the development of the Chinese economy. Like its east Asian predecessors in Japan, Korea, and Taiwan. China took advantage of export opportunities to help support industrialization. However, unlike those other countries, China has also been remarkably open to allowing foreign firms to export their products into China. To import goods at relatively low tariff rates, and also to allow foreign firms to make direct investments into China. To set up joint ventures or fully owned foreign companies. Now if we think about the opportunities of globalization, there are a number of dimensions. The first is that at the outset of reform, Deng encouraged millions of Chinese students to go abroad to study. And thus provide a human capital resource that could help develop linkages between China and the rest of the world. And contribute the expertise learned abroad to China's economic development. As I just noted, globalization also provided a very important market for Chinese goods that allowed China to become the factory of the world. In addition, because at the outside of reform China's technological capability was very far from the global frontier. There were many opportunities to transfer technologies from other countries to China and immediately raise productivity and thus contribute to growth. China entered the global system at just the right time when logistics costs were falling. Information, innovations as well were occurring that made it much easier to establish global production chains with many steps. In other words, China could specialize in assembling goods by importing components from other countries, assembling them and then exporting them out to the next stage of the global production chain. In this module we will cover five topics. The first is international trade, focusing on understanding the performance of China in this area. And the policies and institutions that have affected trade outcomes. Next we will talk about how trade has contributed to China's economic development. The third topic is foreign direct investment. We will talk about the benefits and cause of allowing large amounts of FDI into China. And in this part of the module we will also allow you to visit an actual firm in China. In fact two foreign invested firms in Guangdong Province. The last two topics in this module are outbound foreign direct investment from China which has increased rapidly in recent years. And internalization of the Renminbi. These are two very important recent issues that have become quite prominent. And because there is still relatively little research on these topics, we will have interviews and discussions with leading experts to provide greater insight into what is happening in these areas.