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Lecture 4

Lecture 4 - Global Economic Map.docx

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Western University
Geography 3422A/B
Milford Green

Global Economic Map 2/5/2013 1:09:00 PM Changing Global Economic Map  A simple geographical division of labour – core and periphery in the global economy o Core – production of manufactured goods o Periphery – source of raw materials and food stuffs, market for manufactured goods Trade Transition  China will overtake America as the worlds biggest importer by 2014  Within 10-15 years emerging markets could produce half of the revenues of several big TNCs  International trade is a principal channel of economic integration o Tends to be more important for countries that are small in terms of geographic size or population and are surrounded by neighbouring countries with open trade regimes than for large, relatively self-sufficient or geographically isolated countries that are penalized by high transport costs  Trade GDP ratio is often called the trade openness ratio o Openness may be somewhat misleading as a low ratio for a country does not necessarily imply high tariffs or non-tariff obstacles to foreign trade (it may be due to other factors)  2007 – global map of manufacturing production o Canada – 11 th  Manufacturing value added: o 1980 – Canada was 10 thwith a share of 1.9 in world percentage o 2003 – Canada had a share of 1.87%  Trade flows in 2009 – most nations’ trading is within itself o Canada has a -2.0% trade balance o 1995 – China’s imports and exports were small o 2009 – China’s imports and exports grew to more than Germany  Canada has the 4 thlargest GDP per person  Changes in trade: o The fall of Japan to become third biggest economy ($5.07 trillion), behind the US ($14.83 trillion) and China ($5.7 trillion), Canada is at $1.34 trillion o Continued dominance of US as largest economy o Uneven economic performance of Western European economies o Emergence of a number of newly industrializing economies in East Asia o Recent and rapid emergence of China as a major player in world economy o Weak performance of most Latin American economies o Appearance of transitional economies in Central Europe Outsourcing  Origin: o Outsourcing can be said to have started in the early 1980s with European airlines setting up back-office operations in New Delhi o In the second half of the 1980s, American Express consolidated its JAPAC (Japan and Asia Pacific) back office operations into New Delhi o In the 1990s Jack Welch set up GECIS (GE Capital International Services) with call center operations in India  Features of high probability of outsourcing: o No face to face contact required o High information content o The work process is telecommunicable and internet enabled o High wage differentials with similar occupations in destination count
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