Notes 3.11.08 - 6. Off-shoring: take your factory and move...

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6. Off-shoring: take your factory and move it to another country Started with China in 1977 with communist control over economy Implemented a policy of limited capitalism – allowed private ownership but limited the free trade Reasons for off-shoring: big market and cheaper A wave of foreign investors came into China when they opened up the markets Foreign investors had no judicial protection (China was not part of the World Trade Organization), safest way to get established in China was to create relationship with Chinese businessmen There was corruption in the regional bureaucrats China finally became a member of the WTO in 2001 ( http://en.wikipedia.org/wiki/World_Trade_Organization ) China became the ideal place for off-shoring factory because of the large population and large unemployment rates – cheap labor The government of China offered tax concessions to encourage foreign investment; they also controlled the energy supplies and provided more energy to the factories (communist
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This note was uploaded on 03/19/2008 for the course ISS 315 taught by Professor Hussain during the Spring '08 term at Michigan State University.

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Notes 3.11.08 - 6. Off-shoring: take your factory and move...

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