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Controversies of economic globalization (characteristics of econ…
Controversies of economic globalization
characteristics of econ globalization
the increase in cross-border economic activities and organization
trade, investment, global production network and multinational corporations
National boundaries were overcome by multinational corporation and investors
aka trend of global market integration
NIKE, Coca Cola, Apple
promote free trade
almost all countries are involved in international trade with increasingly close trade relations
by WTO and other global organization
to enjoy the products of different companies around the world
Integration of labor market
distribute different production processes to the world.
flow of capital is faster than the speed of trade
International investors can invest in different places at any time
Stocks, bonds, futures and other financial products
MNC
characteristics
nike
products are sold with global franchised distributors
cooperates with global suppliers
divisions are all over the world
iphone
component produced in diff countries & assembled in china
how do they operate under the global econ integration
aspects
product design
reflect cultural diff and local features
cater for local consumer's preference
facilitate their entry into local markets
burger without meat and McCurry in McDonald to enter India market
Disneyland adopted Chinese model of construction and special events in lunar new year holidays
production
labour-intensive/low-skilled operations=> LDC
specialized and sophisticated production processes are carried out in their home countries
reduce cost & maintain quality
waste disposal, LDC have loose regulations
foxconn in china
factories in Bangladesh and Vietnam
recruitment
diverse range of professionals around the world are hired to conduct specialized production
incease effectiveness of manpower
resources utilization
indian information Technology companies and also customer services hotline companies are the subsidiaries from developed countries, supporting
salary in LDC are cheaper
low labour cost
find talent in LDC and let them migrate to MDC, let them prospect in there
sales
fit in their cultures, local features
carried around the globe and sales strategies geared to local characteristics to
promote products
Apple iphone--the sale of Gold color which is poplular in Asian countries
financing process
investors are free to invest and trade in global markets
MNCs easy to obtain fiance form diff part of the world
Lehman Brothers stock
Global fund
found in saving plans
how do they benifit the LDC
++technology & experience in operation and management
McDonaldization
dimensions
calculability
predictability
control
efficiency
advantage
fast
no skill needed
easy to manage
disadvantage
ppl recuited to MDC
promote brain gain
brain gain vs brain drain
brain gain
they can earn money and knowledge/skills, then go back to LDC to help them dev
may even hire LDC ppl
and transfer knowledge and skill to ppl
transfer capital and knowledge to their home countries
brain drain(emigration)
less highly qualified employees can contribute to the society
loss for the econ and societies of the developing countries
mitigation of innovation and development in LDC
dev of IT sector
indians left to US
build successful companies in the Silicon Valley in India
low labour force
make in India, sold them in US market
India is leading in the IT sector worldwide
most founded by Indians in USA or managed by them
establish factories or subsidiaries to hire local ppl
job opportunity
global production (outsourcing)
smile theory
MDC have most profit; LDC have least profit
iPhone
rural-urban migrant workers (foxconn)
low education level
poorworking env
poor health
high pollution
long working hour
low income
cannot afford education, medical,.daily necessities
iPhone4 us$187
$80+45 raw materials
&6.54 assemble
sweatshop
Turkish refugee(Marks & Spencer)
as young as 10
lower than minimum wage
co-production chain of diff companies from diff countries
national borders and company boundary are overcome
fair trade vs sweatshop
sweatshop
stakeholders
CEO, dev-ed country
opportunities
expand business to the world
foster the revenue
challenges
workers welfare being concerned
more demands for environmental protection
higher cost in production
request and resonse
request managers to improve the welfare of workers
with no prominent
increase of cost
decrease of efficiency
training managers
frequent supervision
withdraw contracts for factories with no improvment
allow external supervision
minister of the department of commerce, dev-ed country
opportunities
products and services can be sold glogally
enhance the influence to the world
importing money
exporting advance technology, management and culture to LDCs
enjoy higher tax from the MNCs
challenges
criticism from dev-ing countries and NGOs
dumping agricultural products
exploitation to the workers
demand from local people on kob apportunity
response
requset brands to monitor more on factories in dev-ing countries
setting tariff and quota of the export of cheap products
train the low skilled to fulfill more skilled jobs
in dev-ing country, low-skilled worker
oppportunities
more salaries than agricultural production
social mobility
promote to higher position
challenges
poor health high stress
long working hours
poor environment
request and response
improvement on working environment and shortening working hours
form workers group
more barganing power
negotiate with manager
ask international labour organization for help
minister of the department of commerce, dev-ing country
opportunities
enhance soft-power
aka. influence on the world
MDC rely on them
attract more foreign investment
capital& tecnology
foster socio-economic development
challenges
demands from both dev-ed countries and public in welfare and environmental protection
difficult to satisfy both parties
loose foreign investment
more wages, better env
response
megotiate more with the dev-ed countries and improve
improve the walfare of workers step by step
provide more tax benefit for the MNCs
lower skilled, dev-ed country
opportunities
enjoy cheaper products manufactured by developing countries
challenges
losing jobs
closure of factories
hard to fingd another one
request and response
more opportunities
more trainings
more subsidies for unemployment
working in other countries, study and improve competitiveness
relocation of factories
push(china)
can it last long
yes
free of tariff from western countries
econ setbak in US and western countries
continuously increasing cost in china
labour cost remain low
no
unreliable power supply
religous or cultural habits lower the efficiency
worker quality is unstable
frequent traffic congestion reducing working hours
port control measures delaying transportation of parts
lncrease labour costs
hard to employ workers(for low skilled jobs)
young ppl want to work in better paid jobs
rasie of RMB value
reduced support from the gov
increased env protection requirement
pull
cheap labour
easier to employ workers
improved quality of workers and infrastrurues
taxes benifit of investment
free tariff and quotas to EU, Australia and Canada
increased demands of cheaper products by the US due to economic setback
conclusion
dev-ing countries
production costs are lower
earn more profits
"sweatshops"
working env and welfare are poor and working hour is long
exploitation
dev-ing countries enjoy economic growth and improved management and technology
workers earn more income than working in primary production
reciprocity
characteristics of sweatshop
low wage
long working hours
no welfare
poor security
poor environmrnt
many child labours
mass suicide in foxconn
...
trade pattern
tradidtional trade pattern
profit-oriented
too many middle business
fair trade pattern
NGO
fewer middle business
farmer join together to form coorporative
advantage fo fair trade
econ(dev-ing)
increase income of farmers
improve infrastructure to
increase yield of products
attract foreign investments
promote reputation of the products
gov subsidies on the welfare can be reduced
social(dev-ing)
no children is required to work to earn money
can go to school
reduce intergenrational poverty
increase social mobility
living standard of ppl increase
access to social security on medical and educational purpose
econ(dev-ed)
MNCs can fulfill social responsibility and reputation
improve quality of the products
attract customers who favor ethical values(like fairness)
social (dev-ed)
enjoy higher quality of product
consume in line with ethical principles
more choices of products
conculsion
it promote long term and self-sufficient
promote dev in economic, social, environmental
make the community get out of poverty
difficulties in promoting fair trade
comsumers lack awarness of fair trade, information is scarce
do not know where to buy them
fair trade is more expensive
less comprtitive
cost a lot to run these shops
poor env conditions
reducing the chance of success
might not be the most appropriate method
poorest farmers not capable of producing products that can achieve the certificates from FairTrade
cannot help the poorest
fair trade vs free trade
free trade
cannot lead to common prosperity through globalization
profit-oriented
LDCs cannot compete with MDCs
unfair
fair trade
aimed at the pursuit of fairer international transactions
ensure the interests of the marginalized workers and producers
protect from being exploited by MNCs
not meant to reject international trade compietely, but to target the unfair way of trade
promote reciprocity
sustainable development
controversies
finance
capital integration =>international investors
Quantum Fund and George Soros
people might suffer from economic instability, financial turmoil
the substantial devaluation of national currencies and collapse of Asian economy
Asian financial crisis
affect trade between countries
the whole world economic development slowdown
Lehman Brothers
financial tsunami
bankruptcy of Lehman Brothers
plobal stocks vapourized
industrial
LDC
sweatshops
MDC
unemployed workers
environment
LDC
reduce the environmental protection requirements
to attact foreign investment,
MDC
output pollution to poor counties
reduce cost
coca cola (S.67)
Adidas Nike in China(S69)
harm to the environment
air pollution
among 600 cities in China, less than 1% contains air quallity up to the level 1 standard
accounted for eight cities of the world top ten environmental polluted cities
water pollution
among 600 cities in China, 70% did not set up a sewage treatment plant
70% of China's urban river gets contaminated
desertification
area increases by more than 2600 sqKM annually
world's factory
using their own resourses and own body to withstand pollution
gain few profits
Trade
MDC
manipulte the WTO
set up favourable provisions in the international trade organization
set up textile quotas
non-free trade
to restrict entrance
provide agricultural subsidies
force the poor countries to cancel the import restriction
because of free trade
impot of some agricultural productions also rose
impact on local farmers
fertilizer and seed in China are expensive
high subsidies provided in rich countries
LDC
unfair regulation
forced to accept the trade provisions and become losers
economic dumping
export at a price that is lower in the foreign market than the price charged in the domestic market (predatory pricing)
involves substaintial export volumes of the product
endangers the financial viability of importing nation's product
dumping is legal under WTO rules unless the foreign country can reliably show the negative effects of the exporting firm on the domestic producers
most nations use tariffs and quotas to protect their domestic industry
measures to deal with the problem of global inequality
stakeholders
gov of MDCs
gov of LDCs
general public
NGOs
international organization
WTO, UN
MNCs
Legislation
International Labour Office
protect the labour
4 guidelines
freedom of organization of trade union and right of collective bargaining
elimination of forced labour
prohibitation of child labour
elination of discrimination in the workplace
UN--Global Compact
human rights
labour rights
environmental protection
voluntary corporate social contract
monitoring of NGOs & voluntary partipation of enterprises in labour protection
social norm
regulate corporate behavior
MNCs set up own Code of Conduct, voluntary corporate monitoring bodies, voluntary accept independent organization monitoring
fufill corporate responsibility
improve the reputation
civic action
fair trade
NGO initiate reforn of the international trading system
fair trade by Oxfam
anti-globalization
requesting
industrial countries to open markets
the World Bank to stop forcing dev-ing countries to open markets
the WTO to stop launcing new negotiation issues
reduction of disadvantaged position of developing countries in international trade
monitoring large enterprises
greenpeace
monitor discharge of sewage from multinational contract factories
global monitoring and the fair labour association
monitor labour rights
see website