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The End of Cheap China

The End of Cheap China | Global education = global understanding | Scoop.it
TRAVEL by ferry from Hong Kong to Shenzhen, in one of the regions that makes China the workshop of the world, and an enormous billboard greets you: “Time is Money, Efficiency is Life”.

 

China’s economic growth has been explosive. Many people predicting the economic future have used current growth percentages and trajectories to extrapolate into the future. The question that we should ask is: how long can China continue to grow at this current pace? Many signs are pointing to the difficulty that China will have in sustaining these levels of growth. The era of China being the world’s go-to source for cheap manufacturing is dependent on current geographic variables, variables that the economic growth is altering.

 

Manufacturing prices are rising, especially in the coastal provinces where factories have usually been agglomerated (also known as Special Economic Zones --SEZs). The more success that China has in manufacturing, land prices will go up, environmental and safety standards will increase. Collectively, this will mean that labor costs for the factories will also be increasing as Chinese workers are not only producing but also becoming consumers of manufactured goods with an increased standard of living. This is changing the spatial patterns of employment in China and will impact Chinese manufacturing’s global influence. Sarah Bednarz recommends this article as “a needed update on the new international division of labor (NIDL).”  For more on the topic, see Shaun Rein's book, "The End of Cheap China: Economic and Cultural Trends that will Disrupt the World."


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Roland Trudeau Jr.'s comment, July 29, 2012 10:48 AM
As these laws increase and so does the economy it would seem more work will be pushed out of China. Perhaps in the future China will not be the go-to place for cheep labor. That is excellent news for all those effected by these horrible conditions, but given the loss of jobs with the rise of standards, they may not be so happy.
Jacob Crowell's curator insight, December 15, 2014 1:30 PM

I think this is a very important article. All our estimates on China's growth assume that they will continue to operate the same as they grow more and more. We can see that when economies grow, the standards of living rise,, wages rise, the middle class grows and the cost of production will rise. In the late 19th and early 20th century the United States had cheap labor and was one of the worlds leading producer of goods, but as workers clamored for more money, better working conditions and social programs our cost of producing rose to a point where it was cheaper to outsource labor. With China growing, other countries are more attractive to business looking to protect their bottom line.

Jason Schneider's curator insight, April 2, 9:43 PM

The most popular nations of China and the strongest economies of China appears to be on the edge of the east side of China such as Shanghai, Fujian, Guangzhou and Liaoning. I believe that their economic growth has something to do with the fact that these counties are off the coast of East China sea so when you have tourists of immigrants from the east side of China, most likely, they will visit these counties that are in the far east of China. Overall, China is a powerful country but they focus more urbanization on the far east of China because it's closer to the water and that's where you'll find tourists and immigrants. Also, manufacturing factories, especially in the far east are extremely wealthy which allows higher wages to workers and it lures more people to work in China which strengthens peoples desires to go to or live in China.

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The new geography of trade: Globalization’s decline may stimulate local recovery

The new geography of trade: Globalization’s decline may stimulate local recovery | Global education = global understanding | Scoop.it

Many hold it as an article of faith that global trade will be an ever-growing presence in the world. Yet this belief rests on shaky foundations. Global trade depends on cheap, long-distance freight transportation. Freight costs will rise with climate change, the end of cheap oil, and policies to mitigate these two challenges.

At first, the increase in freight costs will be bad news for developed and developing nations alike but, as adjustments in the patterns of trade occur, the result is likely to be decreased outsourcing with more manufacturing and food production jobs in North America and the European Union. The pattern of trade will change as increasing transportation costs outweigh traditional sources of comparative advantage, such as lower wages.


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Apple, America and a Squeezed Middle Class

Apple, America and a Squeezed Middle Class | Global education = global understanding | Scoop.it
Apple once bragged that its products were made in America. But it has since shifted its immense manufacturing work overseas, posing questions about what corporate America owes Americans.

 

The economics of globalization are at the core of this article, Apple just happens to be the case-study.  Why are iPhones not produced in the United States?  While it would be easy to simply cite cheap labor, it is more complicated than that.  Unfortunately for those hoping to rekindle American industry, the problems run deeper than that.  The ability to recruit sufficient highly-trained engineers, flexibility and speed in production are all factors that are decisively in China's corner at the moment.  Big picture, how are these economic factors reshaping the world we live in? 


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What America Manufactures

What America Manufactures | Global education = global understanding | Scoop.it

"It's a myth that the U.S. doesn't make anything anymore."  The U.S. economy still produces more through manufacturing tangible goods ($1.5 trillion) than it does in providing services ($600 billion) for the international market.  The maps and graphs in this article are great teaching materials.  The impact of NAFTA is shown powerfully in the regionalization of U.S. trade partners, making this salient material for a discussion on supranationalism as well.   


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Kenny Dominguez's curator insight, December 11, 2013 7:09 PM


This is great because now we can witness the creation of jobs in the country which can help the country get out of the depression that it is in. it also can help people get jobs and not have to worry about if there unemployment check is going enough to cover there expenses. Also people that are working are less likely to get depressed because they are not trapped in there homes because now they have something that is distracting them. But the United States is seeing a great improvement because of all the things being manufactured here. One good example is the Honda accord power plant and the ford motor company plant and even general motors in Detroit. all of these companies is helping the Americans get back into the workforce.

Nicholas Patrie's curator insight, September 10, 2014 3:05 PM

i was surprised to see that our country still exports so many products. What i find even more surprising is that the top countries that are buying our good are our bordering countries, Canada and Mexico. As much Petroleum we receive from the middle east we still are exporting so much of it to Canada and Mexico. It seems that foreign cars such as ones from Japan are taking over the industry yet our top export to Canada is car parts. it is good to see that America still exports.

Amanda Morgan's curator insight, September 18, 2014 12:03 PM

I was surprised and reassured to see how much the U.S. exports to other parts of the world.  I was unaware that the U.S exported to China because we physically surrounded by items made in China. Although our imports exceed exports, we are still producing,

 

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Globalization: Intertwined Economies & Environments

Globalization: Intertwined Economies & Environments | Global education = global understanding | Scoop.it
The technology in smartphones and laptops includes minerals mined in areas of Africa riven by warfare. But fighting back does not mean giving up technology, reports Kate Dailey.

 

This article, titled, "How to offset your 'conflict mineral' guilt," drives home the interconnectedness of the modern globalized world.  While no one would be in favor of slave labor in mines that support African warlords, the production process to make cell phones, laptops and just about any portable electronic device are dependent of the raw material coming out of mines in Eastern Congo under these conditions.  

 

So what is a consumer to do?  This article outlines some ideas for people to be social advocates to change the geographies of their commodities without completely separating themselves from the modern world.  For more on the U.S. law for corporate disclosure of 'conflict minerals' in their products, see: http://www.treehugger.com/corporate-responsibility/new-us-law-requires-electronics-makers-to-disclose-conflict-mineral-use.html


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