?Globalization refers to the increased integration of economies and countries due to the increased impacts of international influences on all aspects of life, including economic activity. It is the process by which individual countries and economies are converging into a larger global economy. The rate of globalization rapidly increased in the 1980s, resulting in a number of beneficial and detrimental effects for both the global economy and China’s economy. In recent years, globalization has had a major impact on China’s economy, especially since its entry into the World Trade Organization (WTO) in 2001. China has benefited greatly from the onset of globalization and without it, their economy would not be the size it is today. However globalization has also had some strong detrimental effects on the Chinese economy. Its economy has been impacted by globalization through international convergence, economic growth and the quality of life, trade investment and TNC’s, distribution of income and wealth, environmental consequences, financial markets, international business cycle and the implementation of government policies. International convergence refers to the increasing similarity of economic conditions in different countries. China as a transition economy, transitioning from a socialist economy to a market economy, has made many changes to converge with ‘western economies’. Changes include the joining of the WTO in 2001, the establishment of the stock exchange in 1995. FDI flows have also increased rapidly in recent years. These have all benefited China greatly and have allowed continual record growth levels. Some economists believe that globalization is actually causing a divergence in economies rather than a convergence. This can be seen within China itself. In rural areas there is obvious income disparity in contrast to the industrialized area’s of China where all the benefits of globalization have been flowing to. As International convergence occurs, so does the convergence of economies business cycles. The International Business Cycle refers to the fluctuations in the levels of economic activity in the global economy over time. During the globalization era as international convergence increases, so does the impact of the international business cycle on the world. China, since the civil war of 1949, has been ruled by a communist government. China was closed to all trade, essentially isolated from the world. China had a recession in the 1990’s as the Asian Crash occurred due to countries borrowing and spending beyond their capacities. In the last twenty years China has ridden on the back of globalization, prospering well as the business cycle is in it’s boom and now as we are entering the down-swing of the cycle, China will need to accept all the negative effects of being a large economy.. As China shifted to ‘opening the door’ to the world and changing economic structures it has allowed for a stronger impact on China in recent years in different market areas. The most recent severe impact on China was the crash in the financial markets. Financial markets are a mechanism that allows people to easily buy and sell financial securities, commodities and other fungible items of value. China established its stock market in 1990 and its stock exchange in 1995. This along with other factors has allowed China to rapidly increase the FDI Flow’s into the country. In the middle of 2007 the GFC hit the world as a result of the deregulation of the financial markets in America. This has had a major effect on China as this crisis has threatened many banks and they are n