Globalisation

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Containerisation, China

  • Containerisation has allowed an increase in globalisation and the increase in consumer markets and trade due to the lowered transportation costs on goods
  • Containerisation accounts for 60% of world seabourne trade - valued at about $US 12 trillion
  • Largest ship currently= APM-Maersk
  • WINNERS:
  • TNC's and the countries that these TNC's benefit such as China- China and other similar countries will have seen an increase in their exports as a result of containerisation- out of such ports like those in SEZ's
  • LOSERS:
  • London Docklands has lost 60,000 jobs as a consequence as workers are no longer needed to unpack the boats when they come in as technology allows for mechanised methods to take place
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Google Headquarters, London

  • Google has proposed a 92,000 sq foot headquarters to be created which will run parallel to King's Cross Station in London
  • Created by Bjarke Ingels Group and Heatherwick Studios who also created the 2012 London Olympic's Cauldron
  • The new campus will accomodate 7,000 employees
  • The area surrounding King's Cross Station was originally a rough area which would have been deemed questionable however due to Google's developments in the area it as allowed the area to gentrify as the Google employees moved into the area
  • Shows the creation of new markets and the power of TNC's
  • “another clear sign that London is open and remains entrepreneurial.” in regard to recent Brexit negotiations
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Global Trade Agreements

  • General Agreement on Tariffs and Trade (GATT)
  • Initially 23 countries agreed to 45,000 tariff concessions affecting $10 billion of trade, by 1973- 102 countries agreed on tariffs worth $300 billion
  • WTO
  • GATT became WTO where 123 countries agreed to major tariffs (of about 40%) as well as agricultural subsidies allowing textile rights for developing countries
  • Doha Dvelopment Round
  • WTO's efforts to further reduce tariffs and trade barriers have been unsuccessful
  • Debate between developed and developing countries over agricultural subsidies (BRICs)
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China's Open Door Policy

  • When leader Xiaoping came to power he chnaged the style of the economy to a mixed economy which would trade more heavily and become more capitalist in nature
  • SEZ's created (4 originally) in 1980's and were set up near major cities to try and attract capital to the areas
  • The SEZ's contribute to 22% of China's GDP, 45% of FDI and 60% of exports
  • No environmental laws
  • Less restrictions
  • Currently, there are about 14 SEZ's in China
  • The government of China gives SEZs special (more free market-oriented) economic policies and flexible governmental measures. ... SEZs offer "tax and business incentives to attract foreign investment and technology".
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Emergence of Internet Shopping

  • As the world has globalised and techonology and the internet have become more prevalent, brands have seen pressures to adapt their websites to facilitate internet shopping
  • Brands such as Nike have spent large sums of money on developing their online shops
  • New styles of brands have emerged such as shops with no actual high street shops but are based only online - such as Boohoo and Asos
  • The founder of Boohoo has been able to develop his market stall into a $2 billion business empire through the use of the media and internet - this shows the globalising world
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Trade Blocks

  • Trade blocs can create bigger markets with no extra taxes e.g. UK companies such as Tesco have benefitted by expanding into other EU countries and sourcing goods at the best price from the member states
  • Vodafone merged with Germany's Mannesmann to become the world's largest telecommnication company
  • Trade blocs can also allow protection, in 2007, the EU blocked £50 million of Chinese clothes entering the UK as the annual quota had already been filled - known as the 'Bra Wars'
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Privatisation and Market Liberalisation

  • Margaret Thatcher
  • After the general election in 1979, British Telecom, Bus Services, British Gas and British Rail were moved to the private sector
  • G4S manage the UK prison system
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China vs USA - Trade War

  • USA announced successive protectionist tariffs - China has therefore taken out counter- meausures
  • The two countries are huge trading partners
  • Last year China sold $506 billion to USA and the USA sold $130 billion to the Chinese
  • Shows the influence of political policy and how it effects the economy due to the interdependence caused by globalisation
  • Trump has threatened $150 billion of Chinese goods and China has responded with the threat of tariffs on $50 billion worth of USA goods
  • Trump has turned against the work of Obama e.g. his work on tyre imports- Trump believes in the policy of protectionism as a desire to reinvigorate the Rust Belts and areas that suffered as a consequence of globalisation
  • One problem is that Trump has no clear desire for what he wants to happen to China which therefore makes implementing his policies difficult
  • Such actions risks a trade war which neither countries would benefit from
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Globalisation and Africa

  • Is globalisation harmful?
  • Ideas of neo-colonialism- globalisation may lead to neo-colonialism in Africa
  • For example, China has invested in Kenya which places TNC's within Kenya which uses Africa's resources whilst building infrastructure within the country- China spent $3.8 billion oin a railway from Nairobi to the port at Mombasa which will transport 22 million tonnes of cargo a year
  • "China has conquered Kenya"
  • Independence of the African countries post-colonialism
  • When the African countries gained independence, those with poor governance e.g. Zimbabwe struggled to build infrastructure
  • Organisations such as the IMF and WB suggested that they grow cash crops however they advised all the countries to follow similar lines which dropped market prices and therefore meant that the countrries coukd not afford to implement infrastructure
  • Farmers Union in Zimbabwe called the situation "dire"
  • Links to Water Cycle as the environment places pressure upon the agricultural industry
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Trump and NAFTA

  • NAFTA is thw world's largest free trade agreement 
  • The Trump administration wants to lower the trade deficit between the United States and Mexico. In 2016, Americans bought $55.6 billion more imports from Mexico than vice versa.
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Winners of Globalisation

  • WINNERS
  • China- avergae workers have seen their wage tripple, their lifestyles become luxury and a higher consumption of meat
  • From the 1970s onwards, meat consumption rose and the demand for pork rose at about 5.7% each year- the booming economy in 2014 allowed more people than ever to consume meat - it appears that meat consumption has peaked now as people search for a healthier diet
  • Large TNC's such as Amazon - In 1995, the year Bezos, then 31, started Amazon, just 16 million people used the Internet. A year later, the number was 36 million, a figure that would multiply at a furious rate. Today, more than 1.7 billion people, or almost one out of every four humans on the planet, are online
  • As technolgy further advances- Amazon is testing drone delivery which can take a weight of up to 5 pounds and can deliver goods in 30 minutes showing the ever icnreasing 'shrinking world'
  • Despite having some losses, Mubai has also won on a large scale with many new industries being created which has led to huge infrastructure and investment - Shivaji Airport- main aviation hub for the city - 2nd busiest airport in India and therefore a new airport is being planned in order to release the burden on Shivaji
  • Nehru Port handles 55-60% of India's containerised cargo- hub port for Mumbai, India and the Arabian Sea
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Losers of Globalisation

  • Brands such as Woolworths, Blockbuster and Toys R Us- couldnt compete with TNC's such as Amazon and Netflix
  • Developed countries' industries e.g. Detroit and the Rust Belt
  • Detroit has lost its automobile industry which allowed the surrounding city to boom however when the industries moved abroad where the labour could be sourced more cheaply (offshoring and outsourcing) it led the city into decline with a loss of employment and identity - filing the single largest municipal bankruptcy in American history= $20 billion in unpaid bills
  •  Feeds through to human rights and development- Detroit has a 30.8% rste of obesity and 18.3% of people smoke, house prices in the surrounding area are low reflecting the issues
  • People living in slums such as Dharavi will suffer due to globalisation increasing and making Mumbai into a world city- development corporations will therefore capitalise on this leading to gentrification -28,000 families without home despite housing 72,000 families it is not enough, slum people now have to pay tax and will ruin slum culture
  • The development scheme aims to build on the Dharavi land and create tower blocks and infrastructure which would aid the economy in Mumbai and create a more sanitary environment
  • In Mumbai rapid rates of urbanisation have led to mass poverty, unemployment, poor public health care + poor civil and educational standards
  • Average cost of accomodation is 90x the average GDP per captia
  • About 60% of people are in slums in Mumbai which contrasts to 20% in Rio and Dehli and those who dont live in slums live in poor quality houses unless you live in the richest 1%
  • Richest man in India owns 14 stories in a tower block
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Isolation from Globalisation

  • European countries not in the EU face political isolation as they arent members of the trade bloc and therefore do not recieve the benefits such as lower tariffs
  • Northern Nigeria - Nigeria has the biggest economy in Africa at approx $594 billion however the climate in the North is harsh and there is a disconnect between the leaders and the people living in the area due to political instability which has led to the emergence of terror groups such as Boko Haram due to the difficulties in the area - the prosperity has not spread out into the whole country - CORE PERIPHERY?
  • Can also have economic isolation which would include countries with high debts, weak education and an unskilled workforce, poor transport/ infrastructure and dependence on certain industries - vulnrable to commodity cycle
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Isolation from Globalisation- Political Ideology

  • Following the Korean War from 1950-53, Korea was split into 2 countries, North and South Korea
  • North Korea was under Soviet control- Communism
  • Following years of mismanagement and resource misallocation, the country now relies heavily on China for aid to feed its popualtion
  • Political factors have stripped N.Korea connecting to the global economy
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The Global Economic Shift

  • Late 20th century saw China and India increase their share of global GDP
  • IMF predicts China will regain the largest share of GDP - like it had in the 1800s
  • Shift in manufacturing to the East
  • This also moves global influence
  • Shift to Asia began in the 1950s and accelerated into the 1960s into low-tech production of toys and textiles which then moved along to the emerging 'Asian Tiger' countries such as Taiwan
  • 1980s, consumer electronics flourished in Japan but in 1990 the market was outsourced to China
  • Previously the USA and EU dominated the markets as they were far larger, in 1990 China's share of global trade was 2% and by 2010 it had risen to 10% showing their acceleration
  • In 2002, US market bought 26% of Brazil's exports, the EU bought 25% and the Chinese bought 2% whereas by 2010, Chinas bought 15% while the USA declined ti 10% showing the change in the global economic shift
  • China's influence has increased in Brazil (BRICs?)
  • Geographers believe that the economic centre of gravity has shifted to Asia
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Outsourcing and Offshoring - Jaguar Landrover

  • Owned by Indian TNC 'Tata'
  • 26% of vehicles sold in China
  • 21% sold overseas (not EU)
  • Invested in International manufacturing plants in India
  • £1 billion plant built in Changshu, Northern Shanghai
  • Aims to also build in Rio and Slovakia- moving away from western manufacturing due to the costs involved
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How places change as a result of globalisation

  • Bolivia under Morales vs China in Kenya
  • Shows the influence of politics in globalisation
  • Bolivia- Morales doesnt want TNC's to take over its resources- left wing ideology which is standing up against western imperialism- wants to have control over its own resources
  • Detroit- lost its industrial nature due to offshoring and outsourcing and is an example of developed countries struggling with the negative impacts of globalisation
  • When Ford moved out of the city lost 1/4 of its population soon after
  • The city declared itself bankrupt in 2013 due to the lack of prosperity and development in the area
  • 1/3 of families in Detroit fall below the poverty line
  • High murder rates, 2/3 of murders are drug related
  • Other examples of areas affected by the loss of industry= Huntington, West Virginia- Opiod crisis - 1/10 babies born addiced to drugs (usually heroin)
  • BRAIN DRAIN
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Migration- Karachi, Pakistan

  • Population of 24 million which is growing at 5% annually
  • Migrants from rural areas and surrounding countries such as Afghanistan
  • UN estimates that 50% of Karachi's population lives in slums
  • 75% of slum dwellers work in the informal sector
  • Taz base of the city is low
  • Poverty causes political and social alienation of young people
  • Peripheral 'hoc' settlements have expanded greatly as the government cant manage the structure of the city
  • CHALLENGES
  • Overcrowding
  • Poor housing
  • Traffic congestion
  • Air pollution
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Elite Migrants

  • Russian Oligarchs in 'Londongrad'
  • Creates 'blackout buildings'
  • Rich oligarchs bank their money in London property however it creates problems for London as it reduces the amount of housing available
  • However the economy benefits from $250 billion that they bring into the country
  • London has a high international status HOWEVER
  • Tensions heating up between Russia and the UK in the aftermath of the poisoning of ex-spy Sergei Skripal and his daughter Yulia in Salisbury, could hit members of the Russian elite hard if it leads to the country’s oligarchs being denied access to the luxuries of London
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Economic Migrants

  • Dubai
  • Dubai has a mix of both low wage and high 'elite' migrants
  • Migrants make up 60% of the population in Dubai however for the low-wage workers they have to work 12 hour shifts for $5 a day in temperatures as high as 50 degrees Celcius
  • The World Cup Stadium is being built by migrants
  • “Some people tell us not to speak about work and living conditions, and advise us to stay quiet or else we could have our work visas cancelled,” said one of the workers.
  • The Philippines have stopped signing papers allowing their citizens to migrate to Quwait after a Philippino maid was murdered by her boss- 10% of Philippino's work abroad
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Migrant Crisis

  • Mediterranean Migrant Crisis- political actions can affect the policies towards migrants
  • "Refugee death toll passes 1,000 in record 2017 as charities attacked for conducting Mediterranean rescues" Independent Newspaper
  • More than 1,000 refugees have drowned in the Mediterranean Sea so far this year, as charities battling to stem the record number of deaths increasingly come under attack
  • The European countries have adopted different policies towards te migrant crisis

  • Improving co-operation with Turkey on the migrants issue is a top priority for the EU.

    But progress has been very slow. Meanwhile, people-smugglers in Turkey remain very adept at shipping desperate migrants across the Aegean, for extortionate fees.

  • Under the current rules, only migrants who have no right to international protection can be sent back to Turkey. That means economic migrants.
  • Western European countries have taken in limtied amounts of migrants and give aid to Turkey in order for them to keep the migrants in the country and stop the spread into the rest of Europe
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Environmental Degredation

  • Chinese government has fairly strict environmental laws but monitoring these factors is the job of the local government who lack experience and care - they care more about the potential economic growth
  • 60% of groundwater is of poor quality, 36% of forests are at risk from urban expansion
  • South China Sea is the most degredated marine area on earth
  • World Bank estimates 5 of the world's most polluted areas are in China
  • Produces 16% of the global total CO2 emissions
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Social Media

  • Fifa's #saynotoracism campain- TNC action
  • Camebridge Analytica- shows companies can use media to aid politics
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Americanisation and Cultural Erosion

  • Disney Corporation + Americanisation
  • American brands push American culture
  • Thomas Friedman= talks of the idea of Disney's ideal of the 'white wedding'
  • Encapsulates Western wedding ideas - white weddungs are now the most common type of wedding
  • Spread of Western music and TV= Big Bang Theory etc..
  • McDonaldisation + Subway- everywhere- Subway is now the most rapidly expanding fast food brand - McDonalds however does glocalise in some areas e.g. India but mainly it serves the same American culture food
  • L'exception culturelle in France- politcal concept introduced by France in GATT negotiations which limits cultural erosion by limiting imports such as film and radio stations have to broadcast 40% French songs
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Poor working rights in developing countries

  • Bangladesh - Rana Plaza
  • 2013- 8 storey clothing factory collapsed killing 1000+ people
  • Typical style of building that produces cheap clothing
  • Low wages to keep consumer prices low
  • Bangladesh clothing industry went from $6 billion in 2004 to $21 billion in 2013
  • 10 hour days, 6 days a week, $90 a month
  • 20% of the Bangladeshi population rely on the clothing industry
  • 29 global brands had clothing made in that factory- who is to blame?
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Controlling the spread of globalisation

  • Great Firewall of China
  • Xiaoping "If you open the window for fresh air, you have to expect some flies to blow in"
  • Amnesty Internional estimates in 2014 China has largest number of imprisoned journalists and cyber dissidents in the world in order to continue control
  • 60 internet regulations
  • Internet restrictions
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Environmental Tensions - Nile Basin

  • Ethiopia wants to use the Nile Delta for HEP + industrial developments
  • All countries in the basin want to use it for irrigation
  • Increasing demand - Egypt's population set to double to 150 million by 2050
  • Diminishing water supply due to desertification, salinisation and increased evaporation - climate change
  • Increase in waterbourne diseases due to decrease in water quality
  • Ethiopia and Kenya also want to use the water for development - HEP, tourism, farming
  • Proposed Ethiopian Dam will reduce Egypt's volume + access to the water
  • WB and IGOs say that the Dam follows Helsinki rules however Egypt contests this
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Changing Social and Poltical dynamics

  • White people have now become the minority in London at 45% this is an 80% decrease
  • Increase in nationalist groups e.g. Front National, France - Marine Le Penn
  • ?
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Changing Social and Poltical dynamics

  • White people have now become the minority in London at 45% this is an 80% decrease
  • Increase in nationalist groups e.g. Front National, France - Marine Le Penn
  • ?
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Localisation

  • Bristol Pound
  • Local and community currency created to improve Bristol's local economy
  • Aim to support independent traders to maintain diversity in business around the city
  • Winchester action on climate change
  • WINACC -local group mitigating the effects of globalisation- in particular the damages of a consumer economy
  • Helps people save enrgy, better public transport and renewable energy
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Fairtrade

  • Equality in international trade
  • 25 fairtrade organisations
  • Protects human rights, helps rural families and prevents discrimination
  • No illegal child labour
  • Infrastructure- people can choose how their fairtrade premium is spent- schools etc...
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