4.6 The global Shift: winners and losers

Question 1

In 2022, what was the GDP of:
China
the US
the UK?

Answer 1

China: $19.9 trillion
US: 25.3 trillion
UK: $3.4 trillion

Question 2

What is the global shift?

Answer 2

The international relocation of different types of industrial activity, especially manufacturing. Many have moved from Europe and North America to Asia and South America

Question 3

How has trade between Europe and America compared between that of America and Asia

Answer 3

By 2013, the value of two way trade between the Americas and Asia was nearly double that of the Americas and Europe

Question 4

Why has there been a global shift?

Answer 4

-Asian nations allowed foreign TNCs in (open door policy)
-been relocated to Asia by TNCs, due to cheaper labour, land and natural resources
-TNCs can exploit tax regulations
-High populations have made Asia an attractive emerging market for TNCs to invest in
-With TNC investment and trade these large markets have also started to become more prosperous through technology transfer, FDI and the multiplier effect

Question 5

When did FDI increase significantly in China and India?
What about Eastern Europe?

Answer 5

Although restrictions on FDI were relaxed in 1978 and 1991 respectively, these flows did not increase significantly for another 10-20 years.
In Eastern Europe, it wasn’t until a decade after the collapse of communism that FDI took off, after many former communist countries joined the EU in 2004

Question 6

Why is China known as the workshop of the world?

Answer 6

The world’s largest recipient of FDI since 2000
Its share of global trade by value rose from 3% in 2001 to 10% by 2013.
Rapid industrialization has been accompanied by urbanization.
By 2015, China had 150 cities with populations of over 1 million- up from 30 in 2000

Question 7

What are the four benefits of the global shift in China?

Answer 7

Investment in infrastructure
Reduction in poverty
Better education and training
Increases in urban incomes

Question 8

Discuss the benefit of investment in infrastructure in China

Answer 8

By 2016:
-China has the world’s longest highway network
-its rail system has reached 100,000km in length
-Shanghai’s manglev had become the world’s fastest commercial train service - the 30km journey between Shanghai’s airport and the CBD takes just 8 minutes and reaches 431 km/h
-82 airports have been built since 2000, so they now have 250, with eight of the world’s top 12 airports by freight tonnage

Question 9

Discuss the benefit of reduction in poverty in China

Answer 9

By 2022, an estimated 45% of the Chinese population will be classed as urban middle class- this is higher than the entire population of USA. Sales of consumer items have now rocketed e.g. the Chinese bought more TVs and laptops in 2013 than Americans

Between 1981 and 2010, China reduced the number of people living in poverty by 680 million. It has also reduced its extreme poverty rate from 84% in 1980 to just 10% in 2016. Although 20% still live on less than $2 a day, many cope thanks to remittance payments from families

Question 10

Discuss the benefit of increases in urban income in China

Answer 10

As a result of China’s one-child policy, employers have had to pay higher wages to recruit staff. Urban incomes have risen by 10% a year since 2005. By 2014, they averaged US$9000 a year. While there are still large variations within this, they are still paid much higher than what they would of earnt in the countryside- plus their terms and conditions include a 40 hour week, with higher overtime rate and holiday pay.

Question 11

Discuss the benefit of better education and training in China

Answer 11

Education is free and compulsory between the ages of 6 and 15. 94% of Chinese over the age of 15 are now literate compared to just 20% in 1950
In 2015,15 times the number of students graduated from university than that of 2000.
Created a skilled workforce for Chinese’s expanding knowledge economy

However, there is a big rural-urban divide with per capita spending education varying widely from £2200 in Beijing to £300 in Guizhou

Question 12

What are the six costs of the global shift within China?

Answer 12

-The loss of productive farmland
-An increase in unplanned settlements
-Pollution and health problems
-Land degradation
-Over exploitation of resources and resource pressure
-Loss of biodiversity

Question 13

Discuss the cost of the loss of productive farmland in China

Answer 13

Over 3 million hectares of arable farmland (the size of Belgium) has been polluted with heavy metal
12 million tonnes of grain were polluted in 2014
The increased use of fertilisers and pesticides has led to farmland near rivers being taken out of production

Question 14

Discuss the cost of an increase in unplanned settlements in China

Answer 14

Need for rapid increase in urban housing has resulted in the increase of building informal homes. Land prices have rocketed and made decent housing unaffordable. Two types of illegal housing have emerged
-Expanded housing in villages located on the edge of cities. Villagers add stories to their house and then rent out the extra space to migrant workers
-Farmland (owned collectively under communism) is privately developed for housing without permission

Question 15

Discuss the cost of pollution and health problems in China

Answer 15

-China’s air pollution is so bad that the capital, Beijing, has frequent pollution alerts
-70% of China’s rivers and lakes are now polluted. The water in 207 of the Yangtze’s tributaries is not even fit for irrigating farmland
-100 cities suffer from extreme weather shortages and 360 million Chinese don’t have access to safe drinking water. Tap water in Chongqing contains 80 out of 101 forbidden toxins under Chinese law
-Chinese air pollution kills an average of 4400 a day

Question 16

Discuss the cost of land degradation in China

Answer 16

Despite having 22% of the world’s population, China only has 7.2% of its farmland. Over 40% of its farmland is now suffering from degradation. The rich black soils in the north are eroding, while in the south the soils are suffering from acidification caused by industrial emissions. Land clearance has also led to deforestation and over-grazing

Question 17

Discuss the cost of over-exploitation of resources and resource pressure in China

Answer 17

Its resources cannot keep up with its demand, so the Chinese government has sought additional resources in Africa and Latin America. Amazonian rainforest has been cleared in Ecuador, the Cerrado savannah has been converted to soy fields in Brazil, and oil fields are in development in Venezuela’s Orinoco belt- all for China’s consumption

Question 18

Discuss the cost of loss of biodiversity in China

Answer 18

In 2015, the WWF found that China’s terrestrial vertebrates had declined by 50% since 1970. The main cause was habitat loss and the degradation of the natural environment by economic development

Question 19

Why have US and UK businesses outsourced so much work to India, and the city of Bangalore in particular?

Answer 19

Many Indian citizens are fluent English speakers. This is a legacy of British rule, which ended in 1947
Broadband capacity is unusually high in Bangalore. This city is a long established technology hub, thanks to early investment in the 1980s by domestic companies such as Infosys and foreign TNCs such as Texas instruments

Question 20

What are 3 examples of companies who have set up call centres in Bangalore

Answer 20

Dell
Intel
Yahoo

Question 21

What are the benefits of outsourcing call centres to India?

Answer 21

-India’s call centre workers earn good middle-class wages by Indian standards. Nightclubs and 24 hour shopping malls in Bangalore testify to the relatively high purchasing power of the new ‘techno-elite’ typically earning 3500 rupees (£40) a week
-Indian outsourcing companies have become extremely profitable. Founded in 1981, Infosys had revenues of US$9billion in 2015.

Question 22

What are the costs of outsourcing call centres to India?

Answer 22

-some call centre workers complain they are exploited
-Their work can be highly repetitive. Business is often conducted at night- due to time zone differences between India and customers in the UK and US- sometimes in ten hour shifts, six days a week
-The gap between the rich and poor has widened sharply. India has more billionaires than the UK, yet it also has more people living in absolute poverty than all of Africa. In 2015, half a billion Indians lived in homes that lacked a toilet

Question 23

What are the four factors which have been critical in Bangalore’s growth?

Answer 23

-historic role of the university in providing well-qualified graduates
-the growth in outsourcing from western economies: British airways led an early movement to India by moving its accounting jobs to India in 1996, where are the time, wages were 10% of those in London
-The establishment of Bangalore as a special economic zone
-the caste system

Question 24

What have been the affects of making Bangalore a SEZ

Answer 24

In theory, these zones should create a mass of high-earning, high-spending people. The benefits should therefore be increased tax income for the development of infrastructure. However, in reality, the income for Bangalore’s authorities has been outpaced by its rapid growth; attracted by low taxes, company growth has been greater than the speed at which new roads, water or energy networks can be provided

Question 25

What is deindustrialisation?

Answer 25

a process of social and economic change caused by the removal or reduction of industrial capacity, especially of the manufacturing industry

Question 26

What is the process of the spiral of decline?

Answer 26

-old factories close
-land becomes derelict
-jobs lost
-people leave the inner city
-fewer services needed so shops close
-more jobs lost
-more people leave
-people who stay are elderly or low income groups
-little money put into the area so it becomes more run down
-More crime and vandalism

Question 27

How has Leicester become deindustralised?

Answer 27

-In the 1920s, over 30,000 people worked in Leicester’s textile mills
-By the 1960s, one factory supplying knitwear to M&S employed 6,500 workers on its own
-The demand for extra factory workers brought Indian, Pakistani families to Leicester
-However, by the 1970s, overseas competition meant that cheaper clothes were available from Asia, and many manufacturing jobs were lost in Leicester. Industries closed causing deindustrialization.

Question 28

What is Leicester’s textile industry like today?

Answer 28

It still has a small textile industry using local designers, but most items are now made in Asia. Examples of companies still there is Internet businesses BooHoo and ASOS. However, there is continual decline as by 2015, just 12% of M&S clothing was made in the UK

Question 29

What are the two impacts of the global shift on the UK’s industrial cities?

Answer 29

Dereliction and contamination
Unemployment, depopulation and deprivation

Question 30

Discuss dereliction and contamination as a cost of the global shift in the UK

Answer 30

A lot of industrial land has been left abandoned or derelict. Much of the derelict land was contaminated from previous dumping of chemical waste
Sheffield suffered when its steelworks closed, while most of Glasgow’s shipyards fell into disrepair as work shifted to the Far East

Question 31

Discuss unemployment, depopulation and deprivation as a cost of the global shift in the UK

Answer 31

In the 1970s and 80s there was a major decline in populations living in inner cities. The population of Newcastle-upon-Tyne fell by 12% in the 1970s and another 6% in the 1990s as a result of industrial decline. Many inner city areas became run down and the housing was low cost. As a result, many people on low incomes or unemployment benefits moved to these areas, which became pockets of deprivation. Many such areas have gained reputations of crime

Question 32

What is deprivation like in the inner city Leicester ward of Belgrave?

Answer 32

More than 49% here are British Indian and 6.7% are unemployed (in the top 20% of England’s most deprived wards)

Question 33

What are some of the impacts in Detroit due to the industrial decline?

Answer 33

high unemployment
crime
depopulation
dereliction

Question 34

Discuss crime in Detroit

Answer 34

Drug related crime is now the basis of an informal economy and rising gun crime means that life expectancy in low income urban districts is 30 years lower than in affluent districts

Question 35

Discuss depopulation in Detroit

Answer 35

Detroit has lost 1 million residents since 1950, causing a catastrophic collapse in house pricing. Homes here have been sold for just 1 dollar. Those who stay here become trapped in a state of negative equity (their home is worth much less than they paid for it).
Depopulation has been increasingly linked to race- ‘white flight’ has reignited racial tensions

Question 36

What’s the issue with the rural-urban divide in China?

Answer 36

There is a growing rural-urban divide with the poorest 20% getting a disposable income of £412, while the richest 20% in cities earned over £9000