Nike CS

Question 1

Why did Nike choose to locate factories in SE Asia?

Answer 1

Labour is cheap
Governments offered incentives to locate there
Raw materially produced locally, so cheap to obtain
Countries close together to reduce transport costs
Free trade with no import or export duties
Expanding market as countries developed economically

Question 2

Positive impacts in China

Answer 2

Nike has shops in more than 300 cities in China (positive multiplier effect, increase in affluence) and 2nd largest market after USA.
In 2013, employed 260,000 workers in 206 factories (created jobs)

Question 3

Negative impacts in China

Answer 3

Due to one child policy, ageing population, factories having trouble finding workers and having to raise salaries
Some factories are being relocated where wages are cheaper. Monthly salaries in China are $500, $300 in Indonesia and $250 in Vietnam