manufacturing was performed multinationally while as early as 1977 20 percent

Manufacturing was performed multinationally while as

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manufacturing was performed multinationally, while as early as 1977 20 percent was.6Almost two decades later, Dartmouth's Stephen Brooks built on Milner's findings and argued that transnational production and FDI in manufacturing had expanded to such a degree that even arms manufacturers rely on complex supply chainsand expanded intra-industry trade (trade across national borders by companies based in multiple countries). He argues that it might now be difficult for many countries to prosecute extended warsbecause they would not be able to guarantee weapons procurement from enemy countriesor from noncombatant third countries.Historical arguments about interdependence don’t apply – today’s trading relationships are far more integratedChristensen, 15 – William P. Boswell Professor of World Politics of Peace and War and Director of the China and the World Program at Princeton(Thomas, The China Challenge: Shaping the Choices of a Rising Power, p. 41-42)
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Brooks points out that what distinguishes interdependence today from interdependence before World War I is that transnational production(or, as he puts it, "the globalization of production") barely existed in that earlier era.Manufacturing economies wereinvesting in the developing world, particularly for the purpose of natural resource exploitation, more than in other advanced manufacturing countries. In 1914 three-quarters of global FDI was spent on things like oil and coal, and that capital flowed to destinations outside the United States and western Europe. In the 1990s, natural resource investment constituted only 11 percent of FDI. Moreover, investment largely stayed within the developed world as North America and western Europe absorbed well over half of global FDI.7 Before World War I, arm's-length trade—the trade in final products and resources- was the rule of the day. Multinational production and intra- industry trade barely existed. By 1992, Brook writes, the value of international production activities of multinational corporations outstripped global arm's-length trade by more than two to one.8This trend has only accelerated since the 1990s, in large part because of the integration of East Asia into a multinational production base with China as the core. Brown University's Edward Steinfeld argues that in the early 1990s China created an unprecedented form of Asian manufacturing growth. By opening itself up to investment and linking itself to transnational production chains, China has become a regional production hub involving money, know-how, and components from many countries. The Chinese economy is not only highly dependent on exports, especially for a large economy, but China's exports are produced in China by foreign-invested firms at a rate never before seen in history.9 In many instances, the lion's share of value, which lies in innovation and branding, is enjoyed by the foreign firms. So, countering Thomas Friedman's famous argument,
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