China, India and and 21st Century Growth NIC Case Studies

What happened to chinese exports in 1981 and what happened in 1997?

*1981* - Exports rose by 19% *1997* - Deng died, and China has enjoyed a period of growth and stability. The *economy has grown at an average of 10% a year and 200 million people have been lifted out of poverty* - The China that Deng inherited was one of the world's poorest countries, now it is on the brink of global domination

How did HEP, agriculture and oil help Brazil to develop?

*HEP* - fuels 40% of their industry helping to contribute towards costs of production *Agriculture* - Brazil is the world's largest exporter of coffee, beef etc. Grain productivity has also doubled since 1990 *Oil* - Brazil's development of offshore oil platforms have allowed drilling to extract oil from the ocean giving Brazil the 16th largest Oil supply

What else has helped Duabi develop so rapidly?

*Tourism* - tourists are increasingly attracted to the Burj Al Arab and the huge shopping malls and water theme parks etc *Business Hub* - service industries such as IT and finance have increasingly moved to Dubai, with the Dubai International Financial Center (DIFC) *Foreign Workers*- migrant workers from many countries and skills make up the pop. Most of these workers are from nearby countries such as India, Pakistan and Sri Lanka

Where is India now ranked on the HDI?

- 130 in 2014 (not considered 'low level of development however)

Why did India begin to develop into a NIC?

- After the Asian Tigers developed and began expect higher wages and better living standards, TNC's relocated to India to exploit the huge workforce - Services such as software and ICT have been the forefront of their economic growth, with services accounting for around 60% of the GDP

What rate is China's economy growing at?

- Around 10% growth per year - China's economy has grown exponentially and has doubled every 8 years since the 1970s - It has experienced the largest sustained GDP growth ever seen and was the 2nd largest economy in 2010

How did Dubai develop so quickly in the 21st century?

- Before 1956, the entire population lived in *barasti* homes made from palm fronds - Oil wasn't discovered until 1966 and revenue began flowing in 1969, helping to accelerate growth - Dubai's reserves are more limited today and production levels are low with less than 5% of revenue coming from oil

What 2 countries have developed rapidly in the 21st century?

- Brazil - Dubai (United Arab Emirates, Middle East)

What are 5 reasons why Brazil has developed in the 21st century?

- Brazil has lots of *natural resources* such as large oil fields off the coast. It is also one of the largest exporters of iron and is the largest agricultural exporter - Brazil has received *high amounts of FDI from TNCs* including companies such as Fiat who contributed towards $65 billion worth of investment in 2012 - Brazil has *good infrastructure* across many parts of the country allowing businesses to operate easily - The *disposable income of Brazilian habitants has increased* along with the population giving Brazil a large market and high levels of internal demand. - Brazil is a *major global attraction for tourists* and even attracts ecotourism which is helping to preserve Brazil's natural wonders

What are 3 issues with Dubai's development in the 21st century?

- Dubai's development has been described as *apocalyptic luxuries* as oil is gained at the expense of massive environmental damage - High amounts of prostitution and illegal sex trading built on kidnapping, slavery and violence has been 'essential to keeping the 5* hotels full of EU and Arab business men' which generates money - Many workers in Dubai experience poor working conditions with many not being paid. The average salary for a worker is only $120 a month and in 2004, Human Rights watch estimated that over 880 construction workers were killed while doing their job and that many of these were unreported

Why did China not develop earlier?

- From 1949-76 Mao Zedong ruled the Peoples Republic of China and kept communist China separate from the rest of the world. This meant they had a closed economy with goods only produced for themselves and the government controlled all productive assets such as mines, factories and allowed little FDI - There was a great famine in 1960 that killed more than 13 million people and made many starving whilst populations were still increasing

How did China begin its development into an NIC?

- In 1976 Mao Zedong died and new leader Deng took control of China - Deng slowly replaced people's communes with household responsibility meaning there was less equal sharing of produce with the state and more private farming with methods that worked being used - Deng also set up special economic zones that were made for foreigners to set up business and use cheap labour and tax breaks. Investment poured in with $30billion to build roads, factories and container ports - Chinese consumers started to profit from the changes as well buying up products they had previously not had access to

What effect has the service sector had on India's GDP and growth rate?

- Indian IT and services generate *$71 Billion per year* and now account for *60% of the GDP* - India has had an average growth rate of *7% a year since 1997*

What is currently happening to development in the Middle East?

- It is becoming an emerging area of globalisation with many world cities becoming increasingly connected into global city network - Dubai is emerging as the key economic gateway to the Middle East

What are 5 reasons why India is seeing investment in its service sector?

- It is the 2nd largest English speaking workforce meaning Western TNCs like American Express and British Airways can establish call centers there - The Labour costs are very low while productivity remains high. Companies typically see a 30-40% reduction in costs e.g. It is estimated for every 1000 jobs relocated to India, a British company would save £10 million - India has an educated population with 3 million having higher education - There have been economic reforms in India to reduce trade barriers and encourage FDI - *The Government primarily focused on service sector industries rather than manufacturing like most other NICs*

What have been 2 negative effects of India's growth into a NIC?

- The movement of financial services overseas has seen a loss in jobs in services for Western nationals such as USA and UK employees - The benefits of employment from globalisation are mainly available to the educated middle-class, increasing poverty gap. 60% of people in Mumbai live in poverty

What are 3 negative consequences of China's rapid economic growth into a 3rd phase NIC?

- There is now wide Income inequality and life expectancy as the Southern and Eastern regions benefited more from the location of the 'open cities' and SEZs. The agricultural Northern areas are far behind. This has lead to *increased rural-urban migration* (8.5 million annually) - Out of the world's most polluted and dirty cities, China has 16 of them which has lead to thousands of premature deaths - Working conditions in some areas are very poor e.g. in 2010 over 130 workers were injured by a toxic chemical at a factory near Shanghai making Apple products

Where is China now ranked on the HDI?

12th in 2014

What happened to china in 2001?

China entered the WTO giving them better access to global markets. This lead to exports reaching $969 billion 5 years later in 2006

How did Sheikh Rashid help Dubai's growth?

He built schools, hospitals, roads a modern telecommunications network, a terminal building at Dubai's international airport and a new port, Jebel Ali with a free zone around the port

What is the service sector of economies?

The portion of the economy that produces intangible (can't really be touched) goods e.g. not finished products like a car, but perhaps a satellite navigation system software within the car - Also includes calling centres, Internet etc