GLOBALISATION/SUPERPOWERS Flashcards
Explain one reason why many people in the developed world support the global shift of industry (3 marks)
For example:
Cost of goods to developed world customers is becoming cheaper
(1) due to lower cost overseas (1) as cost of living in developing
world is lower(1) e.g. average price of smart phones in 2019 is
less than in 2011 (1).
Factories move overseas so less air/water pollution (1) and
reduced threats to health (1) so reduced costs for health
treatments(1) so government can spend on other priorities (1).
Business owners outsource to Asia as it is economically
worthwhile(1) as wage costs are lower(1) so profits increase (1)
and the business can invest in new infrastructure/designs (1).
Explain one reason for the emergence of a multi-polar world (4 marks)
For example:
Growing military power of China/India (1) means there is
more investment in weapons/SMART technology (1) to
protect access to resources for growing populations and
wealth(1) so there is competition with USA/EU for power as
countries seek to protect their own interests(1).
Growth of China’s/BRICs’ economy (1) linked to FDI has
enabled investment in infrastructure /factories/
manufacturing (1) and) has enabled investment in military
hardware (1) and projection of hard power(1).
Declining influence of former powers (1) as emerging powers
become more successful economically (1) and can afford to
spend more on military power and challenge for global
influence (1) for example, China has one aircraft carrier and
is building two more (1).
Assess the role of TNCs in developing the economic importance of superpowers (12 marks)
Relevant points may include:
AO1
* Economic influence has become more important since the Cold War Era, resulting
in the rising importance of certain Asian countries (China or India) on the global
stage. This increases the geopolitical influence of the region but also creates
economic and political tensions, such as China becoming a threat to the USA.
* TNCs (public and state-led) are dominant economic forces in the global economy
and economic and cultural globalisation in terms of technology (patents) and trade
patterns.
* TNC decisions may contribute to economic problems, e.g. unemployment,
economic restructuring which present ongoing challenges to USA and EU.
AO2
* TNCs dominate economic production and incomes for their host states and
employees as well as their states of origin, however in western economies, their
decisions and actions are largely independent of government.
* State-led TNCs (Gazprom, Aramco) act as an arm of their governments and can be
used to exert power. Huawei employees are accused of spying for Chinese
government.
* To maintain global influence, high incomes are required (e.g. military dominance,
for USA in underwriting NATO, also aid).
* Resource needs for economic development are high leading to imports of food,
energy, goods and therefore terms of trade issues and influence given to states and
their TNCs that hold the resources (e.g. Russian energy).
* Challenges of economic change from USA as industrial powerhouse to dependence
on imports and Rustbelt decline has had lasting political fallout.
* Counterfeiting has become an increasing problem facing TNCs resulting in profits
decline and therefore less taxes are being paid to nations. TNCs have looked to
increase their profits through the use of tax havens to reduce corporation tax
payments, meaning countries receive less taxes as a result.
* However, superpowers often have cultural power through brands so earnings are
high e.g. via Disney, Coca Cola, Microsoft, Amazon.
* Enormous influence of spending power of Chinese middle class provides growth for
TNC market for decades to come, and potentially for India in future.
* TNCs can help develop infrastructure e.g. airports, port systems and import/export
frameworks which can facilitate trade which may benefit other TNCs or the country
as a whole through tourism for example.
Assessment
* Likely to argue that TNCs are a key factor but IGOs also are used by superpowers,
and also control of raw materials needed elsewhere (Russia), and sanctions to block
trade (China/USA).
* Candidates may argue that the relationship between TNCs and superpowers is a
symbiotic arrangement, in the fact that they mutually reinforce each other.
* Government decisions play a key role in developing their economic importance e.g.
the UK leaving the EU has resulted in TNCs choosing to relocate their European
headquarters from London due to concerns over leaving the Single EU market and
customs union. In addition, decisions to join trade blocs can allow TNCs to extend a
superpower’s economic importance into new areas with limited restrictions.
