This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Material that you will have to cover for “Exam 2”: Week 8: Labor Market Debates – part 1 China – the awakening giant Early 1970s: Insignificant participant in world market for goods World’s third largest economy Reasons for growth: China’s ‘‘marketizing’’ its economy through changes, minimizing economic disruption and political opposition Economy opened to foreign investment and joint ventures Government’s monopoly over foreign trade disbanded Trade and services flows Growth in merchandise trade surplus Current trade surplus at $250 billion Should we worry about the trade deficit? Yes it is arguably contributing to economic imbalances Manufacturing jobs Manufacturing employment is decreasing in the US Outsourcing of services Outsourcing Debates Concept and examples: Domestic Outsourcing: Classic Make or Buy Decision Ex: Procter & Gamble contracts with HP for IT services Offshore Outsourcing: transfer of an organizational function to a third party, when the party is located outside the country Ex: Chevrolet contracts with a call center in India. Off-shoring: relocation of an organizational function to a foreign country Ex: Dell’s research and development center in Vietnam and Daimler Chrysler has an R&D center in Bangalore In-sourcing:...
View Full Document
- Spring '10
- International Trade, Offshore Outsourcing, Offshore outsourcing effects