Chapters 5 & 7

Chapters 5 & 7

1. The rising powers have been both receiving FDI's & increasingly investing in other developing countries.

   • Also, increasingly give more aid - but it is self-serving in exchange for aid & investment, China secures access to resources.
     • DRC 'infrastructure for resources' deal. To build cobalt & copper mines.
     • Meaning an increased interest in naturally rich countries with aid and investment enticing them to co-operate.
       • China=commodity-led economic growth - as its demand for natural resources grow, commodity prices will remain high. Demand means China can't sustain itself, so African & Latin American countries who export commodities will continue to benefit.

2. TNC's

   • TNC's work by mass production - assembly line, managerial hierarchy & a technical division of labour - although this is changing to be more flexible.
     • Global Production Networks=work process is split between locations (design & production).
       • Production increasingly moving to developing countries=SWEATSHOPS. Using cheap labour.
         • Nike, GAP & Adidas.
       • NIDL
       • Social & environment problems=TNC's align with authoritarian regimes & disregard the environment.
         • Shell in Niger Delta - funding military ops & not being responsible for oil spills.
   • Major investors in research & development.
     • Can spend more than some developing countries.
   • TNC's promote technological development
     • Generate employment, raise productivity, enhance exports & assist in economic development.
       • Economist, Krugman=TNC's are good for developing countries.
   • Able to influence developing countries (and own governments) because of their size & power.
   • Seeing a rise of TNC's from the Rising Powers (Toyota) and a decline in US TNC's (GM).

3. In the 70's, India & China were low income developing countries.

   • Over the next four decades, their growth has more than doubled and continues to grow 'RISING POWERS'.
     • Although their 'per capita' incomes will remain well below other advanced economies.
   • As developing countries income levels improve, they will produce more consumers= more production in the global economy.
     • Meaning better infrastructure=rail, road & train links - communications etc.
       • Raw materials increase - energy consumption is increased (OIL).
   • India=in 1990's, economy was opened and was market-led - becoming one of the fastest growing developing countries.
     • Services sector is dominant.
   • China= in 1990's saw industrialisation & integration into world economy, export & imports=risen as an economic power.
     • Industrial sector is dominant (infrastructure, manufaturing).