3.4 global shift Flashcards
(12 cards)
what is the global shift
is the relocating of the global economic centre of gravity to Asia from Europe and North America,
why did the global shift happen
driven by improvements in transport and communications, plus the lowering of trade barriers and economic liberalisation, opening up to FDI.
Labour-intensive manufacturing was attracted to Asia by the large pool of workers willing to work for low wage rates.
what is economic liberalisation
reducing government involvement in the economy and allowing markets to function more freely
benefits of global shift
-Waged work
Factory work provides a reliable, regular wage, since subsistence farming income is vulnerable to weather and disease.The long 12 hour working day, but subsistence farming required even more. As education levels rise and the supply of rural labour decreases, wages rise and there is a shift to more capital intensive production of higher-technology products
-Poverty reduction
people have been lifted out of extreme poverty.
-Education and training
TNCs invest in training and skills development to improve workforce productivity, some skills are transferable. Economic growth generated by global shift in manufacturing used to finance investment in education and training
Households use higher income to pay for more of children’s schooling.
Increase income tax and corporation tax used by government to fund state education.
-Investment in infrastructure (roads, ports, airports and power infrastructure)
Attracting manufacturing FDI requires initial investment in basic infrastructure, e.g. ports, power, water supply, sewers.
Initially investment in a few coastal locations (SEZs) but this later expands to link up SEZs to cities inland.
costs of the global shift
-Loss of productive land.
construction of factories, infrastructure and housing for workers occupies land previously used to generate agricultural output.
Air and water pollution from industrial activity can render more agricultural land unusable.
-Unplanned settlements.
New manufacturing job opportunities prompts rural-urban migration. Slums or shanty settlements form
- Environmental or resource pressure
Industrial activity can produce serious air and water pollution.
Pressure on natural resources, especially water supply, as new factories and offices demand resources. Rapid industrial expansion can outpace environmental regulation. Manufacturing activity creates demand for addition commodities as raw material inputs.
Created new domestic and global flows of commodities, driving up commodity prices and leading to mineral depletion. Commodity extraction creates environmental pressure elsewhere.
-other..
Rapid loss of tradition such as local food and dress as the pace of urban and industrial change is so rapid.
New developments tend to be unplanned and sometimes poorly built, lacking key public services.
Case study: global shift, manufacturing in china
> China opened up to globalisation in with Deng Xiaoping’s Open Door Policy and Joined WTO.
Special Economic Zones set up
Low wages attract initial FDI.
Waged work lifted 680 million Chinese people out of extreme poverty since 1980.
Wage rates rising - workers in Honda car factory (Japanese TNC) earn $10 per day.
Low wage manufacturing shifting to Vietnam and Bangladesh.
Workers face long hours at repetitive tasks.
Initially health and saftey standards are low.
Education free and compulsory for 5-15 year olds. Literacy rate risen from 20% in the 1950s to 84% in 2015.
Infrastructure expansion, eg. high-speed rail (HSR) link Shenzhen-Shanghai-Beijing.
Technology transfer as local companies adopt TNC techniques. New Chinese TNCs, like Huawei smart phones.
Case study: global shift in outsourcing services in india
> India opened up to globalisation with economic liberalisation.
Much of initial globalisation through outsourcing.
India had a comparative advantage as it is English speaking, a legacy of the British Empire.
Early investment in Indian Institutes of Technology produced a large pool of IT literate workers.
Large TNC FDI in 2000s in call centres and back office functions, eg. British Airways.
Computer software design outsourced by TNCs.
low wages
Inequality increased. India has more billionaires per capita than the UK, and more people in extreme poverty than the whole of Africa.
In 2015 Prime Minister Narendra Modi launched a ‘Make in India’ regime to encourage manufacturing FDI.
However, in 2015 the World Bank ranked India 142nd in ‘ease of doing business’ due to a lack of proper bankruptcy laws, average 4 years to resolve contract disputes and legal restrictions on foreign ownership in some sectors.
Case study: china , developing country experiencing major environmental problems
Since 1980 China has undergone an industrial revolution
-Severe air pollution in cities where air pollution is regularly above the World Health Organisation safe limits.
-Beijing’s six million cars and coal-burning power stations are the source of this pollution, close to 50% of the world’s coal is burnt in China.
-Around 50% of China’s rivers and lakes and 40% of its groundwater is polluted - so much that it is unsafe to drink untreated.
-Over 20% of China is subject to desertification and severe soil erosion, which can create major dust storms.
-Combined with deforestation, desertification has forced many farmers off their land and into cities as the farmland has been over-exposed.
-biodiversity has suffered
-These environmental issues have human consequences as people live in the polluted environment.
-Air pollution in northern China has been estimated to reduce life expectancy by nearly five years.
Case study, Detroit Michigan ,Some deindustrialised regions in developed countries face social and environmental problems as a result of economic restructuring (dereliction, contamination, depopulation, crime and high unemployment
1.what is deindustrialization
2. what was Detroit known for in 1920s
3.what caused deindustrialisation
4.how much did its population decrease from
5.what was it declared as in 2013,why?
6.how much income did 1/3 of family have
7.what was there murder rate
1.the decline of regionally important manufacturing industries
2.4th largest city with thriving car industry
3.industrial reconstructing due to the global shift such as car manufacturing moving to Japan
4.fell from 1.5million(1960) to 0.7million(2012) - 1/4 of its population
5.bankrupt - due to the reduction in tax revenue
6.below us governmental official poverty line
7.45 per 100,000 the highest of an us city (2014)
What are the 10 stages in the spiral of decline?
- Old factories close
- Land becomes derelict
- Jobs are lost
- People leave inner city
- Fewer services are needed/ Shops and schools close
- More jobs lost
- More people leave - People who stay are mainly elderly/low income groups
- Little money is put into the area so it becomes more run down
- More crime and vandalism
- Quality of life gets worse
What is a negative multiplier effect?
The knock on effects caused when investment is removed/changed in an area.
what is economic restructuring
When developed countries shifted from a manufacturing to service based economy.
