Research Topics: International Trading System

INTERNATIONAL TRADE

ECON 335 International Trade Class Assignment 3   (a)  ‘Like beauty, the concepts of trade liberalisation and globalisation are not only in the eye of the beholder, but are also difficult to define, yet easy to recognise when one actually encounters them.’  Discuss   (b)  ‘The concept of export-led growth is arguably the most widely discussed, yet least understood notion in economics.’  Discuss from both the theoretical and empirical perspectives.   Reading   Relevant sections in recommended textbooks by , and    (London: , 2003)   J (London: , 2004)    (, 2003), especially Part 3.    (, 1998).     (1994).    (1994).    (1997).    (1993).    (1993).    (: 1991). (Note: This work consists of 7 volumes.  Volume 7 Summary is the most widely consulted.  However beware, as the content of this volume possesses a sometimes slim resemblance to the contents and conclusions of the preceding six volumes!)    (: 2002).    (: 2001).    ( and : 2001).     (1997).   (September, 1993).    ( 2001).   , (2000).           A large quantity of further material is available from the ’s website, located at  as well as from the  ’s                               12th November 2006 Credit:ivythesis.typepad.com

INTERNATIONAL TRADE

ECON 335 International Trade Class Assignment 3 (a) ‘Like beauty, the concepts of trade liberalisation and globalisation are not onl...

International Trade

International Trade                 This paper is about international trade. It discusses the statement “International trade is really, at best, a zero-sum game. For every winner, there is a loser. It is not so much about creating growth in developing economies as it is about finding ever cheaper products for consumers in the developed economies.” Using different theories on international trade, as well as different examples, it criticizes the said statement. Explanations for the said judgments are also given for further evaluation of the statement. As an introductory, the reader is given a background on international trade and the theories related to it. Then the discussion on the statement is presented with examples to apply the theories behind it. As a concluding part, the topic is wrapped up as to the final judgment regarding the said statement.   International Trade: An Introduction             The pure theory of international trade encompasses the determinants of trade and its consequences, the ways of controlling it together with its consequences, and the interaction between international trade and other real aspects of the economy. What is the reason why country A exports good X while country B exports good Y?             According to the Ricardian Theory, trade is attributed to the differences in the countries’ ability to produce different goods. One produced one good relatively cheaply, while the other another good. These differences arise from the differences in labor productivity. This theory is also known as the classical theory of trade, the earliest and the simplest of all trade theories.             Another neo-classical theory is the Heckscher-Ohlin theory. It explains countries’ differing abilities in different goods with reference to the differences in their endowments of their factors of production. It justifies some of Ricardo’s point. This theory remains to be the dominant mode of thought within the theories of international trade and underlies much normative analysis.             The last one is the so-called modern trade theory. It reemphasizes technology on one side; while on the other side, it stresses the role of product differentiation in international trade. The latter is a new, and apparently fruitful, area of research that integrates imperfect competition into international trade theory. It explains the ‘intra-industry’ trade, which is the simultaneous act of importing and exporting (at the same time) of countries, of very similar goods. The explanation for this type of phenomenon is impossible for the earlier trade theories, since they depend only on costs differences of production to be able to generate trade. International Trade Theory of David Ricardo Absolute and Comparative Costs: The Principle of Absolute Advantage             The seed of the modern theory of international trade comes from Adam Smith. His concern lies on the division of labor as a way to enhance efficiency. This is where he is well known to and he further generalizes this to the specialization between trades and between countries.                Thus countries trade, and should trade, in order to acquire their consumption more cheaply. They buy where prices are lower compared to their place. This is due to the fact that prices are considered as immediate determinant of trade.             Another argument relating to international trade that Smith claims is the idea that international trade allows greater specialization and division of labor through market extension. Therefore, it presents possibilities for additional gains through the reduction of costs below their autarky levels. Trade can increase the economic welfare of both countries involved. Thus, not only can absolute advantage describe international trade patterns, it also provides the rationale to prescribe their implementation as a means of raising economic welfare.             Take this example to further explain the principle of absolute advantage. Britain was the least-cost producer of cloth while America is the least-cost producer of food. Britain will export cloth, because he can gain from it due to its low cost of production. On the other hand, he will import food, because producing it will cost him more than importing it. Same is true with America. Nevertheless, if both goods are produced more efficiently in Britain, applying the principle of absolute advantage suggests that both goods be purchased from Britain. However, this is not applicable in the long-term. Therefore, Ricardo proposes the law of comparative advantage to address this type of situation.    The Principle of Comparative Advantage             This theory explains why it can beneficial for two countries to trade, even if one of them is capable of producing both goods more efficiently. What matters for this principle is not the absolute cost of production. Instead, it is focused on the ratio between how easily the two countries can produce different kinds of things.             To illustrate its difference from absolute advantage, take this situation as an example. In Portugal, production of both wine and cloth is possible, compared with England that requires greater work. However, the two countries have different relative costs of production for the two goods. In England, it is very hard to produce wine while it is moderately difficult for the production of cloth. In Portugal, both productions are easy. Therefore, while it is cheaper to produce cloth in Portugal than in England, it is cheaper still to for Portugal to produce excess wine, and trade that for English cloth. Conversely, England will benefit from this trade because it can now get wine at closer to the cost of cloth, with its cost of production for cloth unchanged. In simpler terms, country A exports the good for which its input requirements are relatively lower compared with those of country B.             In conclusion, international trade takes place because some goods are produced more cheaply abroad compared at home. Ricardo’s model explains this pattern of trade through the relation of prices to certain features essential to the economies concerned. However, this requires several assumptions. First, there is only one factor of production, and that is labor. Second, its productivity differs between countries. Third, labor is perfectly mobile between industries within a country but perfectly immobile between countries. Fourth, there are constant returns to scale in each industry. Lastly, there are no impediments to trade, such as tariffs, etc. Extension of Ricardo’s Theory             While Ricardo expressed his theory in terms of the labor theory of value, Haberler re-expressed his theory in terms of opportunity costs. The opportunity cost of good X is the amount of good Y that has to be surrendered in order to obtain a unit of X. In Ricardo’s theory, the transformation occurs by shifting labor from one industry to the other, so opportunity costs are naturally defined in terms of relative labor productivities. The same concept applies to cases involving several factors of production. If the opportunity costs were constant, the whole of the above theory would follow as is. We have just treated the labor requirements as being part of the bundles of factors, with lower requirements indicating greater efficiency.                 While the Ricardian theory is a supply theory of international trade, its differences in supply conditions that give rise to the possibilities of trade. Trade also occurs even when, demand conditions are identical across countries. In any case, the analysis may be completed without the assumption of identical demand without any fundamental differences. The Heckscher-Ohlin Theory of Factor Endowments             Heckscher and Ohlin asked why productivities differed across countries. They also wondered why the possibilities of transformation differed. According to Ricardo, it is due to the differences in technology. Still, they argue that the ability of the countries varies with their endowments of the different factors of production. Provided with demand patterns that do not differ much between countries, the Heckscher-Ohlin theory of trade states that countries will export the goods whose production is relatively intensive in the factors with which they are well endowed.             In this approach, it stresses the role of factor endowments. There are seven assumptions to be taken in this approach. First is that consumption should be determined by identical and homothetic preferences. Second is that technology is the same across countries. These first two assumptions separate endowments as the cause of trade. On the other hand, the next two restrict the technology in important respects. They are: (3) the exhibition of constant returns to scale but diminishing marginal returns to any single factor, of the production functions for each good; and (4) the difference in the requirements of different factor inputs for the said goods. If one good requires more labor compared to the other at one set of factor prices, the same applies to all sets of factor prices. This situation is better known as the exclusion of ‘factor-intensity reversals’. It allows a clear identification of labor-intensive product.             The other two assumptions describe economic behaviour. They are: (5) the presence of perfect competition in all factor and product markets; and (6) the lack of impediments to trade, such as tariffs, etc., although there is no possibility for the migration of the production factors. Lastly, the final assumption that there are only just two factors, two goods and two countries, imposes world restrictions. In addition, there should also be homogeneity between the factors within the countries, identical between them, as well as fixed in supply.                   The first two assumptions are necessary in answering the question regarding the appearance of the ‘factor-endowment-related’ trade. The next three, on the other hand are among the critical ones. The fifth assumption ensures the equality of prices and costs, as well as of consumption prices and marginal utilities. The technical identification of the labor-intensive good is allowed through the fourth assumption. The third assumption, on the other hand, centers on the translation of price signals into quantity changes. The absence of this assumption would not necessarily invert the trade pattern, although it would make it impossible to prove the constant dominance of the H-O result. The Modern Trade Theory             This theory primarily hinge around technology. It also considers the effect of the economies of scale and degree of monopoly to the patterns of trade. The explanation of the ‘intra-industry’ trade is also possible because of this theory. Although this theory returns to the basic approach of Ricardo, it pays more attention to the determining factors of technology. The changing technology is the one that determines trade, that is why a move from equilibrium to disequilibrium theories is necessary for this discussion.             In conclusion, technological differences and changes can provide us further explanation regarding the international trade in manufactured goods. While goods are relatively young, we expect them to be exported by the innovating country. Subsequently trade may end, as knowledge is diffused, or reversed, as factor endowments replaced knowledge being the principal trade determinant. The fact that one innovation frequently leads to another, means that innovations tend to originate in just a few countries. However, changes in relative dynamism can occur, like the case of Western Europe and Japan. There are at least two channels through which research and development is translated into export advantage. Yet, it is not clear which of the two is dominant over the other. Neither does it give a clear explanation why some countries are more dynamic than others do. Therefore, we are not yet in the proper position to develop a more formal model of technology similar to the Heckscher-Ohlin Theory. Trade as a Positive-Sum Game             Trade between economies is not like sports competition. A sports contest is described as a zero-sum game. By that definition, if one competitor does better, its opponents are doing worse. However, because specialization is allowed in trade, each nation can concentrate making the products it produces relatively well (absolute advantage). Trade therefore, simultaneously makes all nations better off. To conclude this statement, trade really is a positive-sum game.             Take the case of Nike and Reebok. These two companies are almost purely rivals that are selling the same products. Only a small fraction of Nike’s sales is to Reebok workers, and vice versa. So one’s success tends to be at the expense of the other. However, for the major industrial countries, despite the fact that they sell products that compete with each other, they are also each other’s main export markets and main suppliers of useful imports. A successful European or Japanese economy helps the US by providing us with larger markets.             In addition to that, the purpose of international trade is not to export. Instead, it is to import, and this makes trade useful for us. What a country really gains from trade is its ability to import the things it wants. Exports are not an objective in and of themselves. The need to export implies a burden that a country must bear. This is due to the fact that import suppliers are crass enough to demand payment from the other party.             Trade patterns influence a number of factors. Among them are: (1) employment in high-wage manufacturing jobs; (2) growth trends relative to one’s productivity; (3) employment shares in the service sector; and (4) the overall wage levels.            Applying that, international trade again, is not a zero-sum game. When productivity rises in Japan, the main result is a rise in the Japanese real wages. American or European wages are in principle at least as likely to rise as to fall, and in practice seem to be virtually unaffected.             It would be possible to belabor the point. However, it is clear that while competitive problems could arise in principle, as a practical, empirical matter the major nations of the world are not in economic competition with each other, to any significant degree. It is normal to have rivalry for status and power, as countries that grow faster will see their political rank rise. Nevertheless, asserting that the growth in Japan diminishes the status of the US is very different from saying that it reduces the standard of living in the US. It is the latter that rhetoric competitiveness asserts.                                  Credit:ivythesis.typepad.com

International Trade

International Trade This paper is about international trade. It discusses the statement “ International trade is really...

MANAGING BALANCE OF PAYMENT DEFICIT

Managing Balance of Payment Deficit   Introduction             When the exchange rates are not stabilized by government authorities, the Flexible Exchange market closely resembles the theoretical model of perfect competition.  There will be a large number of buyers and sellers who act as price takers.  Accordingly, the exchange rates are determined by demand and supply in the Flexible Exchange market.  In cases of Fixed Exchange rates, government officials try to keep the rate stable and have to get rid of the excess supply or demand at specific prices using international reserve assets. Debit transactions involve payments by domestic residents to foreign residents (i.e. imports of merchandise, foreign transportation services, purchases of local residents traveling abroad, foreign investment by home residents).  Credit transactions, on the other hand, involve receipts by domestic residents from foreign residents.  These factors and modifications can directly cause a deficit in Balance of Payment if improperly managed ().  Tariffs and Quotas             Government has the options of imposing tariffs on a specific situation.  According to  on his upcoming book “Advanced International Trade: Theory and Evidence”, there are three situations of this imposition of tariffs: (a.) to protect fledging domestic industries from foreign competition; (b.) to protect aging and inefficient domestic industries from foreign competition; and (c.) to protect domestic producers from dumping by foreign companies or governments.  Apparently, the implication of tariffs and quotas on imports would significantly facilitate immediate domestic recovery in Balance of Payment deficit   Managing the Balance of Payment Deficit             As the Balance of Payment is getting worse, it appears that the risk of a crisis is indeed serious.  The present situation of the subsidiary would be less sustainable without proper management of the deficit.  The aim would be to recover, minimize, and profit from the current loss by making it an Ownership Society rather than Sharecropper’s Society (perpetually paying tribute to foreign creditors and owners).  The initial solution would be the depreciation of the exchange rate of the host country.  Depreciation or devaluation of the domestic currency carries two advantages for the subsidiary.  Firstly, it will improve the competitiveness of domestic products, and eventually lead to an increase in exports and lower imports.  A government’s implementation of tariffs and quotas on imports would also greatly help in achieving this measure.  It would be a good way to shrink the current account deficit without any significant negative impact on the domestic economy.  Secondly, it would reduce the burden of the current debt faced by the subsidiary.       The exchange rate is not more of a cause but an indication.  What really drives a current account deficit is the balance between the subsidiary savings and investment – put differently, the balance between domestic spending and income. The government then plays a vital role of implementing reforms to contain the increasing deficits.  Their job would not be only through tariffs and quotas on imports but harmonizing currency interventions to manage the exchange rate and ensure that any further depreciation of the currency will not turn into a destabilizing run.   When this cooperation between the subsidiary and the government will be met, there will then be an increase in national savings thus reducing dependence on foreign borrowing.    REFERENCES     Credit:ivythesis.typepad.com

MANAGING BALANCE OF PAYMENT DEFICIT

Managing Balance of Payment Deficit Introduction When the exchange rates are not stabilized by government authorities, ...

International Business

International Business The changes in the world output is dependent on the trade that exists among countries around the world.  (2000) reports that on average, world output has grown at a faster rate than in any other period of history, and its major cause has been the rapid growth of world trade, resulting from an increase in the degree of international specialization between countries (). Similarly, a decrease in the world output decreases the other. It has been reported that trade can decrease during times of severe economic recession being a result that fewer consumers are certain about their financial futures, leading them to purchase fewer domestic and imported products (2005). In addition, their relationship can also be attributed to the devaluation of money during economic recession, causing higher costing imports, which make domestic products a little more affordable. Despite their given direct relationship,  (2000) emphasizes that trade has grown faster than output, for economies have become more open and economically interdependent, and at the same time, policy measures adopted by countries stabilize their relations with their trading partners (). This growth rate of trade can be accounted for by the increase in the role of manufactures being exhibited by the developing countries. The interdependence of countries brings about cooperation and economic stability, and harmony in continuous trading relations. The broad pattern of international trade determines the country’s gain in terms of importing and exporting goods and services in trading with other countries. It was mentioned earlier that countries are dependent from one another, whether they are developed or still developing. This means that different countries rely on each other in terms of trade. It has been reported that the main pattern of trade is that developing countries tend to export mainly primary goods, such as raw materials, and import mainly manufactured goods, including cars, machinery and computers; while the developed countries tend to import primary goods and export manufactured goods ( 2006). Developed countries, such as the United States and United Kingdom need raw materials for most of their manufacturing industries, and obtain them from developing countries. These raw materials include oil, coffee, tea, rice, coal, grains, fish, textile, logs, and fruits and vegetables. In contrast, developing countries, such as the Philippines, Brazil, and India need manufactured goods for their development. If nations will cut off trade with one another, then it will result to lack of resources, necessities and turmoil. Take for example the situation of the Philippines. The Philippines continually import rice from other rice-producing countries to feed its citizens. Due to the rapid increase of its population, most of the agricultural lands are turned into neighborhoods to accommodate more Filipinos, leading to the decrease in rice produce. Most of the equipments, such as computers, cell phones and other machines used for production, communication and transportation are imported from China, Japan, US and Europe, so cutting off trade with these countries would mean the crippling of the economy. Cutting off trade with the United States would mean lack of airplanes, ships, cars, and even military equipments, and delay the Philippines’ objective for economic development, stability, education, and global competitiveness. Given that many advantages can be attained in facilitating trade, each country must still protect its own industry from being harmed by too much products coming in, for the increase in imported goods would indicate lower prices, resulting to the destitution of smaller businesses. This is why governments also promote and restrict international trade. It has been reported that the rapid growth of trade has been achieved since the Second World War in bringing about a gradual reduction in the level of trade barriers both in regional and global levels, and by technological changes in the 21st century, especially in the area of telecommunication and transportation (Grimwade, 2000, p. 11). The General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO), plays the regulation of the international trade at the global level. This introduced a set of rules to govern world trade that gave stability and certainty of access to world markets for exporters and created a framework through which countries could negotiate freer trade (Grimwade, 2000, p. 11). This resulted to the large reduction in the level of tariffs, particularly in relation to industrial goods. At the regional level, restriction of trade is achieved through the formation of regional free trade areas and customs unions, such as in Western Europe, with the creation of the European Communities (EC) in 1958 and the European Free Trade Area (EFTA), which resulted in the elimination of tariffs on trade between member states. Some other includes the North American Free Trade Area (NAFTA), which provided free trade in goods and services between the US, Canada and Mexico, the MERCOSUR in South America, and the AFTA or the Asian Free Trade in South East Asia.             Different countries have different beliefs in establishing and managing their own governments for their own welfare. Both the concepts of the market economy and the mixed economy are being debated upon on its advantages and disadvantages on being imposed by a government. These are useful for careful evaluation of their true essence, and for us to decide whether our present system needs to be changed. The market economy seems a very effective type of economy as it offers economic freedom, and limited government intervention in terms of trade. It has been reported that it follows theory of Adam Smith, that of the free market economy, where the allocation of resources is determined by the ‘invisible hand’ of the price mechanism, and is commonly associated with capitalism ( 2005). It encourages innovation, efficiency and entrepreneurship and provides less market restrictions. However, market economies cannot provide the necessities to the public, such as healthcare and education, due to the undemocratic market forces, being controlled only by few powerful individuals in the society. Social disparities, such as poverty and inequality become the result of this.             The mixed economy contains both private and public enterprises. The government operates taxation policy in order to fund essential services, and private companies operate to produce goods for all other sectors in the economy. This type of economy seems the best possible economy to be implemented, but its drawbacks could be the high amount of taxes to be imposed by the government on the people, possible poverty, increase in prices due to increase in tax, wage hike increase, and government destabilization. Credit:ivythesis.typepad.com

International Business

International Business The changes in the world output is dependent on the trade that exists among countries around the world. (2000) ...

Use international trade theory or the work of Michael Porter to explain the advantages and disadvantages of locating manufacturing production in the Pacific Rim

Advantages and Disadvantages of locating manufacturing production in the Pacific Rim: Michael Porter’s Diamond               The Pacific Rim plays a major role in the world economy, ever since the Asia Pacific Economic Cooperation was formed in the 1980s. The Pacific Rim is composed of countries from China, Singapore, Hong Kong, South Korea, Japan, Philippines, United States of America, Australia, New Zealand, Chile, Colombia, Mexico, Indonesia, Taiwan and Canada (,  and , 1994).             These nations house the most important financial centres in the world, therefore the participation of these nations in every aspect and sector of the world economy is very significant. And one of those aspects in the business is manufacturing. According to  (2003) manufacturing is the process wherein the companies apply and use processing mediums and other tools in changing raw materials into finished products that will be sold to the market. According to  (2002) some economists and scholars view manufacturing as an aspect in the economy that produces wealth.             Manufacturing is an important sector in the business and without manufacturing there are no products that could be used by the consumers to make lives easier. Big companies from industrialised nations are the ones responsible for the massive scale of manufacturing in their own countries; an example is the Ford Motors in the United States. However, with the rapid embracement of huge companies in the concept of globalisation, more and more companies are looking for possible locations for manufacturing. In addition, with the new technologies in the market boundaries is no longer an issue in the business. An organisation may have its headquarters in the West but can open a factory in the East.             This paper discusses the advantages and disadvantages of locating and establishing manufacturing production in the Pacific Rim, particularly in China. The advantages and disadvantages will be tackled in the context of Michael Porter’s Diamond Model.   One of the emerging markets in the East is the People’s Republic of China.  According to  (2007) the country is now the fourth largest economy in the world and has the GDP growth of 10.7% in the year 2006. China is now considered one of the most important nations in the world today in terms of business opportunities. Aside from the fast GDP growth in China, the country has the biggest population in the world, and because of the booming economy of the country, investors are flocking in China.  (2005) wrote that China has one of the largest and highest labour forces in the world having a population of 1.3 billion. Different organisations are setting-up factories in China when it opened its door to capitalists, and most of these companies are in the sector of manufacturing.             In order to determine the advantages and disadvantages of locating an appropriate manufacturing production in the People’s Republic of China, the Porter’s Diamond will be utilised. Michael Porter developed the Porter’s Model in order to give analysis on the reasons why some nations or locations are more competitive than other. In addition, according to  (1998) the Porter’s diamond proposes that the location of an organisation is significant in developing the extent to which the company will probably attain advantage on a wider scale. The location of the manufacturing production delivers the basic factors that could support or obstruct the organisation from gaining the advantage in the global market. Traditional theories on economics often utilised five factors in comparing the advantages and disadvantages of locations and countries and these are Land, Location, Natural Resources, Labour and Local Population size. However, Michael Porter viewed these factors as passive and could weaken the competitive advantage of an organisation. Porter introduced the concept of clusters which is a group of interwoven firms, related industries and suppliers in a specific field. In addition Porter discussed that clusters could have an impact on the competition in the following ways: ·         The productivity and efficiency of the companies within the cluster could be increased. ·         Innovation and creativity will be enhanced in the field. ·         Clusters could stimulate new businesses. The Porter’s Diamond distinguishes four determinants of the competitive advantage and disadvantage of the location and these are: Firm Strategy, Structure and Rivalry- it is the status in the country that determines how organisations are established, organised and managed, it also identifies the attributes of competition in the domestic market. In this determinant the cultural aspects plays a significant role. For a company that plans to locate some parts of the business in another nation, determining and understanding factors such as the structure of management, working morale of the employees, and interactions between the company and the local industries interconnected with the organisation in the particular country is also important because it shapes the structure of the organisation and it can either give advantages and disadvantages in some industries. The corporate strategy of an organisation is also important because the strategy has a huge impact on the structure and control of the organisation. In the Porter’s Diamond rivalry in the domestic scale could be a big help in organisations in achieving the competitive advantage in a global scale.             In the case of China, the economic condition of the country is very favourable for organisations that want to locate their manufacturing process and set-up firms or factories because of the cheap labour and robust economy. However, there is also a disadvantage since China is not a capitalist nation but a socialist therefore there are more restrictions when establishing a manufacturing production compare to capitalist countries.  The corporate and management strategy and structures of the organisation could be an advantage if the company was able to have a deep understanding on the working commitment of the employees, however it could also be a disadvantage if the management of the company did not understand the culture and work ethics of the people wherein they plan to set-up the manufacturing process. China is the nation that produces huge quantities of counterfeit products, it would definitely be an advantage for some of the companies particularly the clothing companies because there is a possibility that the designs may be copied, and therefore the company must ensure that their designs will not be victims of counterfeiting.    Home Demand Conditions- it is the condition of the demand of products and services that is produced in the country wherein the organisation is planning to establish a manufacturing production process. The demand conditions for the product of the nation aids in shaping the direction of the development of the products. Moreover, Porter discussed that the home demand is driven by three characteristics which are the mixture of the needs and wants of the consumers, the scope and the rate of growth in the domestic market, and the mechanisms that convey the preference of the domestic markets to foreign markets. The manufacturing process of an organisation established in another nation could utilise the changing tastes and trends of the domestic consumers as an advantage, specifically in innovating the products and services due to the fact that the domestic market have bigger influence in the identification of the needs and wants of the consumers than its foreign market.             China poses advantages in the aspect of the home demand conditions because of the huge population of the country and the growing number of middle class families, the demand for the products that an international firm will be higher. Since the organisation will establish manufacturing production in China there is the advantage of obtaining the trends and demands of the consumers. However, there is also an advantage, particularly if the trends are picked up in China and sold it to other countries such as the United States because the trends and needs of people from China might differ from that of another country.   Related and Supporting Industries- it is the existence or non-existence of industries that supply the needs of the organisation in order to compete internationally, as well as, the supporting industries of the organisation. If the organisation was able to obtain a competitive supplier for the international market it can also lead to the advantages with supporting industries. Having a good and competitive supplier and related industries will aid in the innovation and internationalization in the organisation in the future years. As mentioned earlier, aside from the suppliers related industries also plays an important role in the producing products that are have great quality, related industries could be activities that are needed such as design of the products.             Since a number of raw materials could be found in China and nearby countries the cost of the production and manufacturing will be relatively cheaper, therefore the location for possible suppliers that offer cheap raw materials is easier to find thus it is an advantage for a company. On the other hand, there is also a disadvantage because there is a possibility that the products and designs could be copied during the production process by some people working in the related industries. Factor Conditions- it is the condition in the country regarding the factors of production such as labour, infrastructure and many more which is important in some industries. The factors are assembled into human resources which includes the cost of labour, commitment and many more, the material resources such as the space and natural resources, capital resources, knowledge resources and the infrastructure. Some organisations even include the stock market, policies on labour and employment and educational backgrounds. These factors could be an advantage for an organisation if the management was able to identify and determine the factors that could be exploited and developed in another country. That is the reason why the idea of transferring to low-cost countries came about. The factor condition according to Porter could be modified and change in order to suit the needs of the organisation. The political and technological changes in the society could also trigger changes the conditions of the national factors.             In the case of China the human resources is an advantage due to the fact that the cost of labour in China is very cheap. However, cheap labour does not necessarily equate to skilled workers, although China has cheap labour there are still only few workers that have the sufficient knowledge to perform in some activities. Furthermore, , , and  (2000) discussed the challenges a firm faces in Human Resources when establishing a business in China. First, is on the selection, in China connections is important in facilitating a business without connections the business will be in a slow process, another challenge in the selection process is the belief of the government in which private firms should be absorbing excess employees from state-owned companies, in which leads to overstaffing in private firms, and empire-building is also a challenge in the selection process. Next is Training and Development, the Chinese Employees are risk averse and seldom takes initiative. The third is on Appraisal and Reward, the appraisal on the performance for non-production revealed to be a problem and loyalty of employees is hard to get. And finally Control and Socialization, the top managers use the firm’s money to use for their own personal needs without paying interests, the iron rice bowl mentality of Chinese workers does not fit well in the private sectors in which most of the companies are owned by foreign investors.               In the material resources, China has a number of advantages due to the fact that it has a massive land area and is also near to countries that have abundant natural resources therefore obtaining raw materials is easier if the manufacturing production is established in China. Furthermore, with the massive land area of China, manufacturing companies could tap out possible substitutes from this country. An example is in the case of drinks, tea is one of the drinks used by East Asians for hundreds of years, and because people nowadays are more health conscious and have started to discover the benefits of tea, therefore soda companies are threatened by the entry of these substitutes that originated from the Eastern part of the world, various food companies from different parts of the world have seen the potential of these food products and have set-up production in the country since the information and resources could be found there.             Knowledge resources could be both an advantage and disadvantage in China. It is an advantage because there are a number of potential individuals from reputable universities that could be trained by the management. However there are also disadvantages in the knowledge resources in China, in the study conducted by  (1997) Taiwanese managers told the problems with local workers in China such as poor job commitment and work discipline, high turnover rates, not interested in learning new skills, intergroup hostilities and poor training and education. In addition,  and  (1996) made a comparative study on women managers in China and Hong Kong the study revealed that managers from China were not as mature as in Hong Kong. Women managers in Hong Kong regarded their job as a path to career development while managers in China regarded the monetary reward as their motivation for the job. Moreover, Hong Kong managers concentrate on planning whereas managers in China concentrate on directing.             The advantages of manufacturing in China are due to the fact that the raw materials and people is very abundant in China the organisation could switch easily from one supplier to another, therefore the richness of resources and population of China is an advantage to organisations. However, there are also disadvantages in manufacturing in China include the rampant piracy of products, although raw materials and labour is cheap in China the possibility of copying the products and technology of an organisation is inevitable. It is a clear fact that organisations flock to China and establish factories because of cheap labour; however there is a shortage of skilled labour despite the fact that the population of the country is 1.3 billion therefore it becomes a disadvantage to the organisation (, 2006).   The Role of the Government             According to  (2007) the government of the nation wherein an organisation is planning to establish a manufacturing process plays an important role, although the government does not have a direct impact to the organisation, the institution serves as a medium that incites activity and challenges the organisations. The government is the one that encourages and push organisation to be more competitive, in order to produce high quality products and even stimulate healthy rivalry among other firms. China is one of the fastest emerging nations in the world in terms of economy and even politics. Many companies are clamouring to set-up factories in firms in China due to cheap labour and resources. Manufacturing is one of the industries that have been establishing firms and factories and have taking advantage on the cheap labour and costs of production. However, just like in any places there are advantages and disadvantages that must be determine to in order to create risk measures. In this case, Michael Porter’s Diamond Model could be a useful tool in determining useful information for decision-makers of an organization when identifying possible locations to set-up their manufacturing process.  By having an analysis of the industry, entrepreneurs could identify the optimal industry in which to enter.  Overall Porter’s Diamond Model gives people the basic understanding of the competitive structure. Different organisations could use the model to determine the magnitude and scope in which they can turn the advantages in order to develop a competitive advantage to other organisations in a global context. Every country has its own advantages and disadvantages. China is not an exemption to that, even though it is one of the business hotspots in the world. Companies, regardless of the nature of the industry must have a full understanding of the location in order to maximize the resources and prevent risks that may hinder the progress of the company.   References: Credit:ivythesis.typepad.com

Use international trade theory or the work of Michael Porter to explain the advantages and disadvantages of locating manufacturing production in the Pacific Rim

Advantages and Disadvantages of locating manufacturing production in the Pacific Rim: Michael Porter’s Diamond The Pacific...

Identify agency and affectedness in the following three â€˜hard newsâ€™ texts (Texts 1 to 3) dealing with the WTO protests which took place in Hong Kong in December 2005

EL320 English Grammar in Context October 2006 presentation Text 1 (clauses marked in bold are material processes) <li class="MsoNormal" style="color: black; line-height: 200%"> (police~goal) Facing fists of fury,</li> <li class="MsoNormal" style="color: black; line-height: 200%"> police(actor) aren’t ruling out the heavy hand</li> <li class="MsoNormal" style="color: black; line-height: 200%"> The Korean farmers and unionists (actor) did not use diversionary tactics</li> <li class="MsoNormal" style="color: black; line-height: 200%"> as they(Korean farmers and unionists ) had on Tuesday when 100 protesters (actor)  jumped into Victoria Harbour just before others rushed the police line (goal)</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Following yesterday’s march through Wan Chai,</li> <li class="MsoNormal" style="color: black; line-height: 200%"> police (actor) moved quickly to separate the hardline Koreans (goal)  at the front of the march from the main body.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> They (police) prevented the larger group from entering the cargo handling area (goal) in Wan Chai</li> <li class="MsoNormal" style="color: black; line-height: 200%"> stalling them(protestors) in Marsh Road, while stopping the Koreans’ progress(goal) towards the Convention and Exhibition Centre.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> The Korean group (actor) prepared for the impending clashes (goal)</li> <li class="MsoNormal" style="color: black; line-height: 200%"> by covering their mouths with scarves and handkerchiefs and stretching cling film over their (protestors) eyes to shield against pepper spray. (goal)</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Hundreds of police(actor) were already in place with full-body plastic shields</li> <li class="MsoNormal" style="color: black; line-height: 200%"> creating an impenetrable human wall (goal) across Hung Hing Road.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> The previous day riot police (actor) had stayed out of view as the marchers entered the protest zone</li> <li class="MsoNormal" style="color: black; line-height: 200%"> running to block the road only as the protesters left the demonstration area and tried to march on the Convention Centre.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Some 9,000 officers(actor) are on duty to deal with crowd control (goal), and security during the WTO conference</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Exactly how many Police Tactical Unit officers – the riot police –</li> <li class="MsoNormal" style="color: black; line-height: 200%"> are on hand specifically to control the protesters(goal) has not been revealed.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> The Koreans (actor) , reacting with military precision to the orders of demonstration leaders,</li> <li class="MsoNormal" style="color: black; line-height: 200%"> tried repeatedly to push back the police (goal),</li> <li class="MsoNormal" style="color: black; line-height: 200%"> but seemed unsurprised and unperturbed when they (Koreans) made little progress.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> However, they (Koreans) managed to seize up to 15 shields from police (goal),</li> <li class="MsoNormal" style="color: black; line-height: 200%"> which they (Koreans)(actor) returned to the officers (goal) once they (Koreans ) abandoned their protest.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Mr Ma said “Our (police~actor) defences were not affected by the snatching of the shields (goal)</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Our strategy is effective.’  </li> Text 2 <li class="MsoNormal" style="color: black; line-height: 200%"> Why the Korean protesters are so determined</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Hong Kong people are justly proud of our peaceful marches.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Fortunately, we are not marching for survival,</li> <li class="MsoNormal" style="color: black; line-height: 200%"> needing rice on the table or clothes for our children</li> <li class="MsoNormal" style="color: black; line-height: 200%"> We march for democracy,</li> <li class="MsoNormal" style="color: black; line-height: 200%"> but we will still have our jobs tomorrow</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Hong Kong does not have much reason to be ‘militant’</li> <li class="MsoNormal" style="color: black; line-height: 200%"> So it is no surprise that Hong Kong is panicking about the aggression of some protesters against the World Trade Organisation</li> <li class="MsoNormal" style="color: black; line-height: 200%"> especially among the South Korean farmers. We are not used to seeing such scenes in Wan Chai,</li> <li class="MsoNormal" style="color: black; line-height: 200%"> except when American or British sailors are in town</li> <li class="MsoNormal" style="color: black; line-height: 200%"> But, and this is odd, if you have spent any time in South Korea</li> <li class="MsoNormal" style="color: black; line-height: 200%"> you will know that its people are not by nature aggressive</li> <li class="MsoNormal" style="color: black; line-height: 200%"> . The streets at night are as safe as those in Hong Kong</li> <li class="MsoNormal" style="color: black; line-height: 200%"> There is no vandalism</li> <li class="MsoNormal" style="color: black; line-height: 200%"> hostility at sports events is unheard of</li> <li class="MsoNormal" style="color: black; line-height: 200%"> and gun and drug-related crime are virtually non-existent</li> <li class="MsoNormal" style="color: black; line-height: 200%"> South Korea has never invaded or colonised another country</li> <li class="MsoNormal" style="color: black; line-height: 200%"> So why are the South Koreans here in such numbers and determined</li> <li class="MsoNormal" style="color: black; line-height: 200%"> to derail the WTO talks</li> <li class="MsoNormal" style="color: black; line-height: 200%"> How has this peaceful nation produced farmers</li> <li class="MsoNormal" style="color: black; line-height: 200%"> intent on disrupting the conference</li> <li class="MsoNormal" style="color: black; line-height: 200%"> After all, South Korea was a battleground for the superpowers in the 1950s</li> <li class="MsoNormal" style="color: black; line-height: 200%"> after being torn apart by US foreign policy at the end of the second world war.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> And it was brutalised by Japan from 1910 to 1945.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Then, from the 1950s until the 1990s</li> <li class="MsoNormal" style="color: black; line-height: 200%"> it had US-backed military regimes</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Does this not tell pro-WTO people in Hong Kong</li> <li class="MsoNormal" style="color: black; line-height: 200%"> that the organisation might bring cheer to the suited men in the boardrooms of the world’s larger corporations</li> Text 3 <li class="MsoNormal" style="color: black; line-height: 200%"> Fury on the streets turns to gloom</li> <li class="MsoNormal" style="color: black; line-height: 200%"> After a night of the fiercest violence Hong Kong has seen for decades</li> <li class="MsoNormal" style="color: black; line-height: 200%"> police (actor) rounded up more than 900 protesters(goal) – mostly Korean farmers –</li> <li class="MsoNormal" style="color: black; line-height: 200%"> and brought armoured cars on to the streets outside the convention centre in a show of force aimed at deterring further attempts to breach their~ police (actor)~  lines.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> It proved unnecessary</li> <li class="MsoNormal" style="color: black; line-height: 200%"> A march by 5,000 to 7,000 protesters(actor)  passed off peacefully</li> <li class="MsoNormal" style="color: black; line-height: 200%"> As has been the case for the entire week of protests,</li> <li class="MsoNormal" style="color: black; line-height: 200%"> all the attention was on the Koreans</li> <li class="MsoNormal" style="color: black; line-height: 200%"> who ~koreans (actor)~ have stirred up a mixture of resentment and grudging respect among locals (goal) for their aggression, determination and strategic nous</li> <li class="MsoNormal" style="color: black; line-height: 200%"> On Saturday night, this 1,000-strong group (actor)  mounted repeated assaults on police lines (goal)</li> <li class="MsoNormal" style="color: black; line-height: 200%"> which they ~koreans (actor)~ breached with steel bars, wooden poles and battering rams made from crowd barriers.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Security forces (actor) fought back with tear-gas, truncheons and high-pressure hoses</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Hong Kong officials (actor) said 135 people, including 61 police, had been injured in the clashes</li> <li class="MsoNormal" style="color: black; line-height: 200%"> One Korean man (actor) remains in a critical condition.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> . Hong Kong’s chief executive, Donald Tsang (actor), said those responsible for assaults on police would be prosecuted within 48 hours.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> José Bové, (actor) the fiery French farmer who was involved in the anti-WTO riots in Seattle six years ago</li> <li class="MsoNormal" style="color: black; line-height: 200%"> called on the authorities to release those being held.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> They ~koreans (actors)~ aren’t terrorists or criminals</li> <li class="MsoNormal" style="color: black; line-height: 200%"> They ~koreans (actors)~ are farmers and workers asking for rights,’</li> <li class="MsoNormal" style="color: black; line-height: 200%"> We’re (actors) not allowed to talk to delegates about rice, about cotton, about anything (goal).</li> <li class="MsoNormal" style="color: black; line-height: 200%"> That’s why we’re (actor) so angry </li> <li class="MsoNormal" style="color: black; line-height: 200%"> That’s why we (actor) resist globalization (goal).’</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Many of the marchers yesterday</li> <li class="MsoNormal" style="color: black; line-height: 200%"> held placards calling for the farmers to be freed (goal)</li> <li class="MsoNormal" style="color: black; line-height: 200%"> One group of about 20 local students (actor) began a hunger strike outside a detention centre demanding the prisoners’ release (goal)</li> <li class="MsoNormal" style="color: black; line-height: 200%"> Yesterday’s march, which included local migrant workers and prostitutes,</li> <li class="MsoNormal" style="color: black; line-height: 200%"> was a colourful but low-key affair.</li> <li class="MsoNormal" style="color: black; line-height: 200%"> The 100 or so Koreans (actor) in the crowd were downbeat over the summit’s outcome</li> <li class="MsoNormal" style="color: black; line-height: 200%"> We’ve no future said, Kim You-jong (actor),whose arm was in a sling after the previous night’s battle</li> Interpretation             The analysis on the texts provided gave us a detailed and more in depth insight on who is viewed in the negative or positive light. The evidence that we have gathered using the analysis conducted that the grammar does play a major role in aspect to which the agents can be viewed upon: either negative or positive. However, it does not follow that if the participants are viewed as agentive or active are to blame.  Many attributes should be thoroughly considered before making such conclusions.           Credit:ivythesis.typepad.com

Identify agency and affectedness in the following three â€˜hard newsâ€™ texts (Texts 1 to 3) dealing with the WTO protests which took place in Hong Kong in December 2005

EL320 English Grammar in Context October 2006 presentation Text 1 (clauses marked in bold are material processes) (police...

ENGAGING NEW BUSINESSES IN SINGAPORE

ENGAGING NEW BUSINESSES IN SINGAPORE         Entrepreneurs are the walls of economy; they are the driving force that motivates groups, organization or individuals to succeed. People who are engage in business are the leader and the key people who can make the country grow. They are the one who do not be contented in employment but they are the one who create opportunities for themselves and expand greatly to help people. In today’s modern economy Entrepreneurs do not rely mainly on their own country but they are also engage in International trade which is definitely a great way to expand their businesses. Viable businesses can be greatly encouraged to engage in exchanging foreign trades. In Asian countries like Singapore where business are allowed to enter if they can give a good opportunity between nations.       In fact Singapore government agencies that are assigned in International trade and other Singaporean private companies are visiting countries all over the world to look for specific business that they dwell on to partnership or direct selling. Sometimes they learn in other countries the trade secrets of such a business, KILUS foundation a multi-purpose cooperative in Pasig, City Philippines where there is a group of women who create different products made from tetra-pack of juice drinks. This tetra pack instead of throwing it out on the garbage are collected by members and clean it up and sewn by their members to become a raw material for making bags, slippers and other useful products that they can sell to the market from various countries especially Singapore who is one of their biggest customers. This tetra pack business has been doing well for the last few years in Singapore and expected to continue for the next few years. This means than engaging in entrepreneurship as long as it is legal is highly obtainable in this country.       Since Singapore is a newly industrialized country, businesses like foreign language and English language, Information Technology or tutorial may be a good one to offer they are highly allowing the use of advance technology in their country to be adopted. Also products that are associated in Agribusiness may be viable. Singapore although newly industrialized they have a large land that caters to agricultural production of rice and other crops. Business like fertilizer, machineries, and others may also be a good product to be presented here.  According to Global Agricultural Information Network the country is also in need of livestock like Pigs, Chicken, Meat, Fish fresh fruit and vegetables, snacks and beverages and more due to the high demand of food service business who are now booming in most Cities and Provincial villages in Singapore. Although food exports are highly critical to export since it requires intensive quality of livestock and inspection that would take days upon delivery but the opportunity to export this products is high.         Due to the ever increasing demand of food businesses in Singapore the service food chain business is highly a very profitable business in this country, food stalls continues to grow in streets and walkways. Giant Corporation like McDonald, KFC, Pizza hut etc. are highly enjoying the market demand and it is expected to grow as much as the public continues to patronize such food businesses.        A foreign nationality is open to explore to a new venture in this country, there are various process that an entrepreneurs might need to follow to be legally successful in their endeavor. There are no particular products that you can offer in this country, if you have a business that you think can be viable you should first register to the International Enterprise in Singapore to gather a market research or feasibility study guide. This is an advantage on Entrepreneur’s part to be successful. You may also seek the following agencies for consultation before engaging in your business trade. ·         The Association of Small and Medium Enterprise (ASME) they are the one who provide assistance to the new budding entrepreneurs who are willing to learn and succeed. ·         The Singapore Manufacturer’s Federation (SMa) they provide consultancy services for overall business improvement. ·         Or you may visit directly this website for the complete list. http://www.business.gov.sg/ http://www.business.gov.sg/EN/ContactBusinessConsultant       The openings of International Trade have given full access to individual and organization to take part of the opportunities of businesses all over the world. Entrepreneurs should take advantage of these opportunities if they have a viable business to introduce. The best thing to do is try to create a business today even in modesty then expand gradually and be successful. Who knows? A small business today can be an icon for tomorrow if given an attention and harness in full potential.           Credit:ivythesis.typepad.com

ENGAGING NEW BUSINESSES IN SINGAPORE

ENGAGING NEW BUSINESSES IN SINGAPORE Entrepreneurs are the walls of economy; they are the driving force that motivates groups, or...