Ch 3.5 What is the impact of changes in industrial location and modes of production?

Question 1

What are the economic impact of changes in areas where factories move in?

Answer 1

Jobs are created -> Income increases -> More money can be spent in local good and services -> GDP increase ( increase the tax revenue ) ->more money to improve the social services and infrastructure > attract more people to come -> More new industries will be set up ( Multiplier effect )

Question 2

What are the social impacts of changes in areas where factories move in?

Answer 2

1. Living standard increase with the increasing income.
2. Labour learn the skills and technology from MDC.
3. Serious pollution decrease the quality of life.
4. Exploitation of local resources ( raw materials and labour ) such as long working hours, low wages, low fringe benefits like Foxconn, which called as sweatshops.

Question 3

What are the environmental impacts of changes in areas where factories move in?

Answer 3

1. Air pollution like reduced visibility, smog and acid rain. Emission of air pollutants like sulphur dioxide and nitrous oxide emitted by the burning of coal during steel production.
2. Water pollution. Discharge of industrial sewage with toxic chemicals into rivers and sea like mercury from the production of circuit boards.
3. Land pollution. Disposal of industrial waste by landfill.
4. Noise pollution. Sound produced by machinery operations.
5. Damage to wildlife habitats.
6. Threat to ecosystems.

Question 4

What are the economic impacts of changes in areas where factories move out?

Answer 4

1. Low skilled labour and working class may lost their jobs (lead to employment)
2. Lower or no income -> Less money spent in local shops and services -> Local economy declines -> Less tax revenue for the local government -> Less money spent in providing social services and improving infrastructure. -> New investment shrinks. -> Factories closed.
3. More subsidies and retraining programmes to upgrade working skills -> Increase the burden of the government.

Question 5

What are the social impacts of changes in areas where factories move out?

Answer 5

1. Job losses -> lower or no income -> social problem like drug addiction, drunkeness, family abuse -> Crime rate rises.
2. Widen income gap between the wealthy and working class. -> Income disparity -> Social unrest.

Question 6

What are the other effects of industrial relocation and new modes of production? (Case of moving factories to ZDR)

Answer 6

1. Closing business ties between Hong Kong and ZDR as the firms kept their headquarters in HK.
2. Industrial restructuring like finance, banking and logistics -> Restructuring of economy (Secondary -> Tertiary)
3. Employment restructuring (Secondary -> Tertiary)
4. More land for other land uses like industrial land converted to storage office or commercial land use.
5. Urban decay (Old manufacturing buildings are abandoned)

Question 7

What are the measures to ease the problems caused by industrial relocation and new modes or production?

Answer 7

1. Diversifying the economy.
2. Attracting investment.
3. Improving production efficiency.
4. Upgrading workers’ skills and competencies.
5. Providing a safety net/ social security system.

Question 8

Elaborate on the measure of diversifying the economy.

Answer 8

Develop alternative industries to sustain economic development like HK has focused on developing the tertiary industry like banking and financial services, tourism. Financial centre supporting the businesses headquarters in Hong Kong.

Question 9

Elaborate on the measure of attracting investment.

Answer 9

1. Improve infrastructure.
2. Provide tax/financial incentives.
3. Impose high tariffs on imported industrial goods to raise the competitiveness of the locally produced goods.

Question 10

What are the advantages of diversifying the economy and attracting investment?

Answer 10

1. Create job opportunities.
2. Expand the economic base and stabilise the economy.
3. Increase government tax revenue.

Question 11

What are the disadvantages of diversifying the economy and attracting investment?

Answer 11

1. Diversify the economy takes long time to achieve and may end up in failure.
2. Require large financial inputs.
3. Difficult for a declining economy to finance the development of other sectors.
4. Imposing high tariffs may lead to sanctions from other countries.

Question 12

Elaborate more on improving production effciency.

Answer 12

1. Adopt new technology.
2. Train workers to use new technology.
3. Improve firm management.
4. Close down the inefficient plants or merge them with the efficient ones. For example, Ansteel Group merged with PanZhiHua Iron and steel group. The enterprise was restructured to enhance production efficiency as it had become outdated and inefficient, so as to maintain competitiveness by merging.

Question 13

What are the advantages of improving production efficiency?

Answer 13

1. Reduce production costs in the long run.
2. Enhance competitivness.
3. Reduce environmental pollution.

Question 14

What are the disadvantages of improving production efficiency?

Answer 14

1. Manufacturing firms may not have adequate capital and know-how to adopt the new technologies.
2. Difficult to train all workers to be able to use new technologies.
3. Restructuring of the firms may lead to lay-offs.

Question 15

Elaborate on upgrading workers’ skills and competencies?

Answer 15

1. Provide retraining programmes to strengthen workers’ skills for re-employment.
2. Expand tertiary education to equip people with adequate skills to adapt to economic restructuring.
3. Provide tax incentives to support employers and employees to expand continuous professional training.

Question 16

What are the examples of upgrading workers’ skills and competencies?

Answer 16

1. Tertiary education was expanded in Hong Kong in the 1990s. At present, about 32% of the population aged 15 or above has received post-secondary education.
2. HKSAR government has launched the Employee Retraining Scheme to strengthen the skills of the unemployed workers to maintain competitiveness of the workers to enhance chances.

Question 17

What are the advantages of upgrading workers’ skills and competencies?

Answer 17

1. Help workers transfer to other industries and adapt to economic restructuring.
2. Enhance productivity and competitiveness.

Question 18

What are the disadvantages of upgrading workers’ skills and competencies?

Answer 18

1. Providing training is costly.
2. Difficult for workers to learn new skills.
3. Inadequate job vacancies to absorb retrained workers.

Question 19

Elaborate more on providing a safety net/ social security system.

Answer 19

Improve the social security system to help the unemployed.

Question 20

Name the examples of providing a safety net.

Answer 20

1. Comprehensive Social Security Assistance Scheme (CSSA)
2. Support for self-reliance (SFS) Scheme.
3. Portable CSSA scheme (PCSSA)
4. Social Security Allowance (SSA) Scheme.

Question 21

What are the advantages of providing a safety net/ social security system?

Answer 21

1. Ease the social problems caused by unemployment.
2. Enhance social stability and security.

Question 22

What are the disadvantages of providing a safety net/ social security system?

Answer 22

1. Heavy financial burden on the governments.
2. Some may think it is unfair to have measures favouring the ‘needy’.