INTERNATIONAL PATTERNS OF INDUSTRY AND FINANCE

Group members:1. Ngô Lê Quỳnh Tiên2. Nguyễn Thị Thu Thảo3. Chung Minh Tâm4. Huỳnh Thúy An5. Phan Thị Thường Linh

OUTLINE

1) Generalisation a. Overall Frameworkb. Important Trends

2) Patterns of International Trade

3) Patterns of International Aid

Overall Framework

Core economics: 70% of manufacturing value added

(MVA)

21.1

19

87.54.2

40.2

Share of World Total MVA

U.S

Japan

China

Germany

France

Others

Overall Framework

Productivity Highly capitalized manufacturing

industries high levels of worker productivity high share of manufacturing in GDP

The first trend of shifting dominant position in the world economy

JapanChina

U.S’s dominanceUnited Kingdom

TREND

The second trend of international industrial production and employment

The second trend

Trend

Reason TNCs

About TNCs

Effect

Production effect

Government effect

TREND

TREND

The rapid growth of manufacturing employment and productivity in China and the newly industrializing economies of East Asia

Eg: China and the four Asian “Tigers” – HongKong, Singapore, South Korea and Taiwan

Reason

Corporate strategiesParticularly ones of

large transnatio

nal corporations (TNCs)

Globalization of

economic activity

(the overarching

component of the world’s economic

geography)

The second

trend

About TNCs

The importance of TNCs in the world

economy- compare their annual

turnover with the Gross National Income (GNI)

All top 50 global TNCs > many of the

world’s smaller LDCs ( Less Developed Countries)The very biggest TNCs are

comparable in size with countries: Greece, Ireland,

Portugal and New Zealand

Production Effect

5oo largest US & Japanese corporations employ overseas labour force in LDCs, particular, the NICs ( New Industrializing Countries)

2/3 of the radios made by Japanese manufacturing companies are produced abroad- mostly in South Korea & other nearby East Asian locations

Over 90% of South Korean exports of electronic equipment are produced by affiliates of Japanese companies

Government Effect

Government of LDCs have sought to take advantage of TNCs needs for cheap labour

Setting up Export Processing Zones (EPZs)Adaptions of free trade zone => favourable investment and

trade conditions are created

EX: the resourcce- poor island of Mauritius had more than 500 companies operating within its EPZ, over 90,000 workers, many of

firms are foreign owned/ owned jointly with foreigners.In 2000, exports from these firms exceeded $1.2bil => 75% of

country’s exports

Government Effect

At more general level, government everywhere have responded to the “global reach” of TNCs

=> intensifying their involvement with supranational economic and political organizations

=> European Union (EU) Association of South East Asian Nations

(ASEAN) North American Free Trade Agreement

(NAFTA)

PATTERNS of International Trade

Fundamental structure: trading blocs

Membership: + distance, +legacy of colonial

relationship + geopolitical alliances - Ex : western Europe, together with some

former European colonies in Africa, South Asia, the Caribbean and Australasia

PATTERNS of International Trade

Other cases: Autarky

Many countries don’t contribute significantly to the flows of imports & exports constitute the geography of trade.EX: Central African Republic

Changes in Geography of Trade

Due to : Innovations in transport,

communications and manufacturing technology

Shifts in global politics The increasing internationalization and

flexibility of production processes.

The most striking aspect of commodity flows and the regionalization of trade is the persistence of the dependence of LDCs on trade with developed countries that are geographically or geopolitically close.

Ex : Algeria – Cambodia – Côte d’Ivoire

France

Patterns of International Aid

Debt issue

AID

Viewed as useful weapon to establish and preserve political influence

Its geography has a strong political flavor, which means• Localized

political aspirations

• Colonial ties

‘tied’ to donor countries’ exports, specific military, educational/cultural projects

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