MGT4478 Assignment 7

MGT4478 Assignment 7 - 1 No China will not continue to...

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1. No, China will not continue to achieve record growth in future years. There are some factors will caused China no longer keep growing in future years: Market saturation The China market already reach a saturation, it no longer provide the largest market for those MNCs to sell their products in China local market. Countries replacement Some new growth countries such as Indonesia, India, Vietnam provide some better offer to those MNCs. It will affect some MNCs move or expand their business into those countries. China no longer become the only choice. The resources become more expensive The inflation and economic growth in recent year show the keep growing great inflation cause the raw material and cost of production growth in very high level. China no longer become the dominant in low cost production factory. Rule and regulation apply in labor right Some case such as Foxconn cases caused China government keep changing in labor right. They are not longer become a cheap labor market.
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2. No. China will no longer become the cheap labor market in the future decade. It has some reasons to bring the China out from cheap labor society. Inflation Rate in China In the next five years, wages are likely to rise to 4 times today, and GDP will rise to 3 times today; the next two years, inflation will continue to pressure the devaluation of RMB. Although the rate of RMB appreciation will not be great, but this problem will increase the wages of Chinese factories. In any case, when Americans buy Chinese goods have to spend more money. Over the past 20 years, the time when the labor supply endless, the benefits of productivity improvements by consumers, investors or
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MGT4478 Assignment 7 - 1 No China will not continue to...

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