global winners and losers

• global shift 


  since 1990s, asia played a larger role in economy, total GDP generated from the region is increasing

  majority of industrial activity has shifted from west to east, in 2020 east asian and pacific countries recieved 51% of global FDI(high levels of investment)
• global shift in manufacturing


  TNCs looking to cut production costs so moved operations to areas with cheaper labour, further investment in 1980s NICs started to manufacture consumer electronics
• outsourcing of services 


  businesss needed 24 hour a day business services w/o increasing labour costs- IT support or customer services became widely distributed around the world
• Open door policy in China

  1978
• China's large population


  • Offered an abundant supply of cheaper, well-educated labour
  • Lowering production costs for businesses previously using labour in USA or UK
• Initially, working conditions in Chinese factories was poor and dangerous
• Regular and attractive wages in factories caused large scale rural-urban migration- migrants sought manufacturing jobs
• In the 1980s, Chinese goods were cheap to produce and highly competitive in the global market
• More FDI flowed into China


  • Invested in industrial infrastructure and higher-level training for workers
  • Made China more attractive for higher-order goods e.g., electronics (Apple set up manufacturing factories in China)
• Increased FDI


  Increased working conditions
• The global shift created a growing middle class in China (the number of people living in poverty in China declined by 800 million between the 1980s and 2022)
• india-attractive outsourcing hub

  -       Attracted large companies e.g., Barclays outsourcing labour to run their back-office operations and call centres 

  -       In 1990, series of technological parks set up on the edge of the city of Bangalore

  -       India has large, youthful population and growing number of graduates- IT or engineering 

  -       Second largest English-speaking population- enables communication with English speaking countries

  -       Call centre work leads to 3x average income.
• 3 benefits of global shift

  • infrastructure investment
  • waged work and poverty reductions
  • education,training and health