ABSTRACT
In this chapter you will gain understanding of the following;
What is meant by International Political Economy
How the global economy has evolved over time
Rival theoretical approaches to understanding International Political Economy
How trade is regulated in the contemporary
The political significance of increased transnational flows of money
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Introductory box: Bra wars
In 2005 a trade dispute between China and the European Union occurred when the Europeans began to block the import of certain forms of Chinese clothing after seeing their domestic industries undermined by a sudden influx of much cheaper-produced garments from the Orient. The Chinese cried foul play at such politicised interference in commerce while European textile industries and Trades Unions defended the action, pointing out that they could hardly be expected to compete in price with clothes produced in the ‘sweatshop’ conditions of China.
A compromise solution ended the dispute but the incident highlighted how politics and economics are increasingly entwined in the contemporary world. That the world's leading Communist power could lecture the world's leading trading actor and epitome of Liberalism on free trade served to illustrate how economic globalisation has produced political contradictions, uncertainties and dilemmas for governments in their dealings with the international economy and for students in understanding IPE.
