China Case Study - Globalisation - Geography GCSE

Change in Manufacturing Location and the New Industrial Giant

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  • Created by: Né M
  • Created on: 14-06-12 15:09

China - the 'industrial giant'

In 30 years, China has transformed from being a mainly agricultural economy to being a strong manufacturing economy

  • Now, it has the third largest economy in the world (after the USA and Japan)
  • In 1978, 30% of China's GDP came from agriculture, however by 2004, agriculture only accounted for less than 15%
  • The number of products manufactured in China has rapidly increased
    -4000 colour TVs were manufactured in China in 1978
    -75 million were produced in 2004 
  • China produces 60% of the world's bicycles and 50% of the world's shoes
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Reasons for Growth in Manufacturing (I)

Government Legislation:

  • Foreign investment was encouraged, while the government kept control of the economy, meaning China would gain maximum profit
  • China set up many Special Economic Zones to encourage for foreign investment
    -These offered tax incentives to foreign businesses
  • Open cities were established (e.g. Shanghai) - encouraging further foreign investment

The One Child Policy/The Home Market

  • The One Child Policy which was introduced in 1979 means that the population is much lower than it would have been (400million less) 
  • The policy also meant that people's desires changed 
    -there was an increased demand for electrical equipment and other goods 
  • As the population is becoming increasing wealthy it means that the home market is increasing
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Reasons for Growth in Manufacturing (II)

The Olympics factor:

  • The 2008 Olympic Games were held in China 
    -this gave the country a chance to showcase itself to the rest of the world 
  • It portrayed China as being an open, friendly country
  • This was important in stimulating more foreign investment

The Three Gorges Dam:

  • Industry requires large resources of energy
  • Two-thirds of the electricity is formed at coal power stations
  • The Three Gorges Dam is the largest in the world - generating 22,500mW
    -This accounts for 7% of China's electricity
  • The Dam has led to a lot of development 
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Reasons for Growth in Manufacturing (III)

Cheap Labour:

  • There's no overall minimum wage - it varies in different places
  • In Beijing the minimum wage is £70 a month - which is very cheap
    -in the UK, the minimum wage is £990 a month
  • The wages are around 95% lower than in the USA

Long Working hours:

  • Chinese law state that people can only work 40 hours per week with a maximum of 36 hours of overtime per month
    - these laws are often not enforced

Lax Health and Safety Regulations:

  • Even the health and safety laws in China are similar to other countries, they are not heavily enforced

Prohibition of strikes - strikes are permitted however, the trade union should get people back to work as soon as possible

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