D&G Patterns and Processes Flashcards
What are NICs
Countries who’s economies have not yet reached developed status but outpaced countries in terms of economic growth. Growth export orientated
Characteristics of NICs
- Success originally based on export based industries
- openness to globalisation
- recent switch from agriculture to industrial economy
- large TNCs based there
- well developed infrastructure
- education systems strong enough to produce core of well educated people.
Which countries were known as the 4 Asian tigers
Hong Kong
Singapore
South Korea
Taiwan
Why did TNCs set up manufacturing parts of their business in the 4 Asian tigers countries ?
- cheap workforce
- low cost and availability of raw materials and land
- reasonable standard of infrastructure
- favourable government policies
- reduced trade tariffs
Case study for furthur growth of NICs
China
Background to China as a NIC
- Worlds second largest economy after US in terms of GDP
- Worlds fastest growing major economy average rate of 10% for last 30yrs
- Personal incomes increased for many, production of consumer goods increasing
Reasons for China’s growth
- Due to massive investment in manufacturing based industry and global trade expansion
- FDI encouraged in special economic zones along coast
- China’s entry to world trade organisation allowing better access to global markets (in 2001)
- More investment in infrastructure
- Greater investment in education - workforce more attractive to TNCs
- TNCs use country as export platform so major competitor to other Asian NICs eg South Korea
Other preconditions to growth for China’s NICs
Cheap labour
Stable political system
Increasingly skilled and educated workforce
Low production costs car companies strong eg GM,ford ,VW,Honda
Investments in high technology
Key industries in China NICs growth case study
Energy industry
Manufacturing industry
Service sector
Describe the energy industry in China’s NIC growth
Since 1980 grown dramatically
80% is from fossil fuels
Rich energy potential but developed sources are inefficient and cause pollution.
Describe the manufacturing industry for China NIC growth
- Since 2000 petrochemical and car industries have grown more rapidly
- Machinery and electronic products are China’s main exports
- China worlds leading manufacturer of chemical fetalizers,cement and steel.
- Steel industry important as basis on which many other sectors depend for their raw materials.
- Motor industry shown how China’s economy changed
Describe Service sector in China growth NIC
- Ranks 7th in world and continues to expand
- Retail trade expanded quickly p, urban areas have shopping malls, retail shops, restaurant chains and hotels
- Tourism significant source of employment and of foreign exchange
- China’s hosting of 2008 olympics boosted industry.
- Future growth depends on other attractions throughout country
Evaluation of degree of success for China’s NIC case study
Rapid economic growth caused major problems
- Increase in income gap of rich and poor
- Unemployment grown in some areas leading to out migration
- Environment is deteriorating
- Soil erosion resulting in large losses of Arable land
- Air pollution
- Economy driven by exports and investment rather than by consumption
Issues which concern observers in China
- Internet censorship
- Suppression of religions that are not officially sanctioned
- Lack of minority rights
- Strict limits on freedom of speech and freedom to publish dissenting views
Case study for globalisation of services- can be used for growth of industries instead of China’s?
India
