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Trans-National Companies

Categories: ChinaCompanyEconomics

Globalisation has enabled the flow of services and goods from those countries that are developed to developing countries and this has made the electronic goods from China to be more popular all over the world. This globalisation has also made it possible for Chinese international trade to rise gradually since other countries that were doing well in this trade are now experiencing or rather facing a slowdown.

As a result the Chinese economy is experiencing success since it has managed to scale up its regional cooperation that has ensured that China experiences higher trading volumes.

Economic globalisation in China has been having a concomitant effect and this effect is that of the gains of an equal advantage that is leading China to production of those goods that are very efficient in terms of low production costs. This in turn usually leads to raised volumes of the country’s output.

Multi-National Companies (MNCs) and the Trans-National Companies (TNCs)

China has both Multi-National Companies (MNCs) and the Trans-National Companies (TNCs) and this is why China is doing pretty well at global level.

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It has got very big companies which have opened shops in those less developed countries which have enabled the easy movement of improved technologies but this has also led to the thorough exploitation of the workers based in the third world countries. Globalisation has also made the wage rates in China to be less than those in the developed world.

This has been brought about by the globalisation of the economy of the world.

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China has experienced a gradual increase in the growth rate, improved standards of living, general reduction in the poverty levels but the size of the gap between the have-lots and the have-nots has been growing exponentially. The income per capita in the urban regions of China were approximately 2.2 times higher than those in the households based in the rural regions of the country in 1990 which had increased to about 2.6 in the year 1999 and a further increase to 2.8 in the year 2000. This trend has been ascribed to the number of the unemployed people who are also unable to find jobs due to their lack of adequate education and the technical skills required. China is really benefiting from the World Trade Organization as a result of globalisation. The exports from China are concentrated on the lower end of the value-added ladder, for example the apparel, household products and the footwear.

Liberalization

But now China is making a move towards the upper side of the ladder with most of its exports increasingly in the high class regions, and the only thing that can serve its benefits is further liberalization. Globalisation has exposed some of sectors of the China’s economy to some short term impacts. But these sectors of the economy that are likely to be affected only account to a small part of output and trade. The imports of China will definitely rise and so will the exports, this will be as a result of the elimination of the quota under the World Trade Organization Agreement on the goods that are both exported and imported.

And in addition from its early times as a member of the World Trade Organization, China was attracting huge numbers of direct foreign investments and this was with particular regard to the service sector. This left the balance of payment unaffected. And it was because of the crucial gains to efficiency that the income and the living standards are improving in some parts of the country. Globalisation has made China to decisively open up its economy in an extensive way.

This has made China to benefit from its own trade liberalization. The reduction of the various trade barriers by about 50% has yielded gains in the economy of about $ 420 billion annually. Global developments will shape the economic outlook of China. The rate of China’s growth at the global level is expected to slow down but the 0.5% point-cut put in the interests rates by the Federal reserve will serve to ensure that expected slowdown in the economic growth is humbly dealt with.

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Trans-National Companies. (2020, Jun 02). Retrieved from http://studymoose.com/trans-national-companies-new-essay

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