Nike in China

  • Created by: cconnor09
  • Created on: 09-03-17 13:11
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  • With reference to one case study from an MEDC or NIC, describe how globalisation both helps and hinders development
    • Facts
      • NIike- China- NIC
        • 2012 new 60000ft HQ in Shanghai
          • Near ecological park and close to two airports
      • Nike- based in Oregon USA. Founded 1964; 700 shops worldwide; offices in 45 countries oustide USA; 600 factories; 800000employees
      • 1980s- design and marketing in USA, manufacturing in LEDCs (Asia)-in China-170 factories and 272000 employees
        • 1980-90s allegations of poor conditions for workers. Nike could move the business to keep costs low so sub-contractors were competing against each other- Unions in South Korea were arguing for more pay so Nike moved to China- could make products for a tenth of the price
    • Advantages to Nike of locating in China
      • Cheap Labour. 50p/hour
      • Cheap land and services
      • Lower taxes- government have made deals to attract MNCs so charge less in taxes
      • Fewer workers rights
        • Less protection for workers, no unions, no paid holidays or sick pay
      • Fewer Environmental Laws- less money needs spent on meeting government standards
      • Access to global market- China located away from majority market. Nike can transport in bulk to save costs. Helps new markets develop
    • How globalisation has helped development in China
      • Investment from Nike brings jobs and better standard of employment than local jobs
      • Nike will help to attract other investments into China- helps economy
      • Improves standard of living
      • Global companies like NIke improve services, infrastructure-roads railway within China
      • improves working conditions. Spends $10million/yr on its code of conduct in factories. Has rules for working hours, air quality, fire safety , wage and over time. Employees inspectors to check
      • Multiplier effect- more MNCs will be attracted because Nike is there so creates more jobs and money
      • Locals learn new skills- may be able to work overseas
    • How globalisation has hindered development in China
      • Wages still low
      • Low skilled jobs- don't need education so difficult for people to improve themselves
      • Working conditions- improving but still much worse than global norm
      • Similar to economic slavery- child labour still an issue in some MNCs
      • Profits generated by the products manufactured in China don't go to Chinese economy
      • Nike could pull out of China anytime


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