Global Systems and Governance (1.1-1.10)

Question 1

what is globalisation

Answer 1

• Globalisation is the process whereby the world has become more economically, politically and socially interconnected, leading to flows of people, information, money, goods and services between countries

Question 2

what causes globalisation

Answer 2

globalisation is caused by:
* Advancements in technology - modes of transport and communication. This allows people to move between and communicate between different countries
* Liberal government policies which allow for globalisation - good relations with other countries (opposite of protectionism), open borders, etc.

Question 3

what are examples of flows for labour, information, money, goods and services

Answer 3

• Flows of labour could include skilled workers moving to more developed nations for greater pay.
• Flows of money could include FDI.
• Flows of goods and services could include flows of products manufactured in LDEs/emerging economies to HDEs.
• Flows of information could include global news channels, or any channels of communication such as email, whatsapp, etc.

List not exhaustive

Question 4

what are the patterns of production, distribution and consumption

Answer 4

• TNCs have moved their production to Emerging Market Economies (EME) in countries like China to take advantage of cheaper labour
• But the largest markets for manufactured good remain in HDEs, so most goods are exported from LDE / EME

Question 5

what are the factors that affect globalisation

Answer 5

• New tech and communication systems
  > new tech like phones and the
  internet allow information to easily
  be shared across the world cheaply
  (important tech for LDE)
• global financial systems
  > The global financial system
  facilitates quicker and easier flows
  of money, goods and services
  between countries
  > the disadvantage of financial crisis
  in one country affecting the global
  financial system (2008 financial
  crisis)
• transport systems
  > innovations in air and rail travel
  has made the world accessible,
  leading to new opportunities as
  well as new threats (disease)
• security
  > a rise in international political and
  military alliances (like NATO) to
  increase security
  > countries also work together in
  international institutions like the
  OECD, which promotes financial
  and cyber security
  > The backlash against globalisation
  can also be associated with a rise in
  nationalist and extremist groups
• trade agreements
  > Trade blocs remove or reduce
  barriers to trade between them such as
  tariffs and quotas
  > This facilitates free trade
  > think EU, or the WTO

Question 6

what are the impacts of the unequal flows of people

Answer 6

Question 7

what are the impacts of the unequal flows of money

Answer 7

Question 8

what are the impacts of the unequal flows of technology

Answer 8

Question 9

what are the impacts of unequal flows of ideas

Answer 9

• HDE countries tend to have more influence on ideas about how the world should be run
• Positive impacts
  > increase in trade and development
• Negative impacts
  > greater inequality, with the
  wealthiest benefitting the most

Question 10

what is an example of China using their power to effect the flow of information

Answer 10

• The internet is utilised to influence and control global information
• China has the ‘Great Firewall’
  > started in the late 1990s
  > which is used to regulate the
  internet and blocks access to
  certain foreign websites
• The launch of the ‘Great Cannon’
  > followed in 2015 which is able to
  adjust and replace internet content
• The ‘Golden Shield’
  > is the use of technology as
  surveillance to monitor any dissent
  and anti government activity
  amongst the population

Question 11

what is international trade

Answer 11

• international trade is the exchange of money, goods and services between countries

Question 12

what are the patterns of international trade and investment

Answer 12

• the pattern is changing with LDE’s / EME playing a larger role
• china is now the largest exporter of goods, while the USA remains the largest importer (2nd china)
• HDEs are still the largest source of FDI (foreign direct investment) but increasing FDI from EMEs / LDE (china)
• the USA still largest recipient of FDI, but now LDEs / EMEs receive more than 50% of FDI

Question 13

what are the trading patterns between HDEs, LDEs and EMEs

Answer 13

• HDEs
  > most trade takes place between
  HDEs
  > they are wealthy so more
  disposable income to spend
  > they are more likely to have trade
  agreements
• LDEs
  > least likely to participate in global
  trade
  > less likely to have the infrastructure
  needed to complete trade
  > they have low GDPs, can’t afford
  infrastructure and have less
  disposable income
• EMEs
  > they have lower labour costs,
  attracts FDI
  > they are experiencing rapid
  economic and population growth,
  creating new consumer markets
  > china is a good example

Question 14

what is the definition of ‘terms of trade’

Answer 14

• ‘terms of trade’ refers to the cost of goods that a country has to import, compared with the price they can sell the goods the export

Question 15

what are trade blocs

Answer 15

• trade blocs are groups of countries that work together to boost trade and grow their economies

Question 16

how do trade blocs facilitate trade and who benefits

Answer 16

• they reduce the barriers to trade like tariffs
• members of trade blocs can develop their economies easier as they can sell large volumes of goods without having to pay the tariffs
• trade blocs are made up mostly of HDEs
• but trade blocs retain their barriers to trade with countries not in the bloc (mostly LDEs) reducing their access to the market

Question 17

what are some example of major Trade blocs

Answer 17

• EU
  > a trade bloc with 27 member states in europe
  > set up in 1950s with 6 members
  > with the goals of greater independence
  > and reduced chance of conflict
• USMCA
  > USA, Canada and Mexico (replaced NAFTA)
• ASEAN
  > Association of Southeast Asian Nations, 10
  members

Question 18

what are TNCs

Answer 18

• Transnational Corporations (TNCs) are companies that operate in multiple countries, locating their headquarters, production and sales in different countries

Question 19

what is the spatial organization of TNCs

Answer 19

• there HQ and R&D functions are often in HDE and are the centre for the top down decisions
• Manufacturing often takes place in EMEs or LDEs where labour costs are lower
• sourcing of materials depends on availability
• Sometimes manufacturing takes place in the country where the product will be sold to reduce transport costs
  > this also allows them to access trade
  blocs

Question 20

how do TNCs grow

Answer 20

• economies scale
  > the cost advantages that a companies
  gain when it increases the size and scale
  of of its operation
• Outsourcing
  > contracting other companies to
  complete work, who compete for your
  bid lowering the cost, maximising profits
• mergers / acquisition
  > increasing a company’s market share by
  merging or buying competitors (leading
  to an eventual monopoly)
• vertical integration
  > when a company owns all or most of the
  parts in its supply chain or production
  - e.g BP, owns the wells and the pumps
• horizontal integration
  > when a company buys out rival
  companies at the same stage of
  production
  - e.g Kraft acquisition of Cadbury and
  then later Heinz

Question 21

what are the impacts of TNCs

Answer 21