Nike in China
- Created by: cconnor09
- Created on: 09-03-17 13:11
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- With reference to one case study from an MEDC or NIC, describe how globalisation both helps and hinders development
- Facts
- NIike- China- NIC
- 2012 new 60000ft HQ in Shanghai
- Near ecological park and close to two airports
- 2012 new 60000ft HQ in Shanghai
- Nike- based in Oregon USA. Founded 1964; 700 shops worldwide; offices in 45 countries oustide USA; 600 factories; 800000employees
- 1980s- design and marketing in USA, manufacturing in LEDCs (Asia)-in China-170 factories and 272000 employees
- 1980-90s allegations of poor conditions for workers. Nike could move the business to keep costs low so sub-contractors were competing against each other- Unions in South Korea were arguing for more pay so Nike moved to China- could make products for a tenth of the price
- NIike- China- NIC
- Advantages to Nike of locating in China
- Cheap Labour. 50p/hour
- Cheap land and services
- Lower taxes- government have made deals to attract MNCs so charge less in taxes
- Fewer workers rights
- Less protection for workers, no unions, no paid holidays or sick pay
- Fewer Environmental Laws- less money needs spent on meeting government standards
- Access to global market- China located away from majority market. Nike can transport in bulk to save costs. Helps new markets develop
- How globalisation has helped development in China
- Investment from Nike brings jobs and better standard of employment than local jobs
- Nike will help to attract other investments into China- helps economy
- Improves standard of living
- Global companies like NIke improve services, infrastructure-roads railway within China
- improves working conditions. Spends $10million/yr on its code of conduct in factories. Has rules for working hours, air quality, fire safety , wage and over time. Employees inspectors to check
- Multiplier effect- more MNCs will be attracted because Nike is there so creates more jobs and money
- Locals learn new skills- may be able to work overseas
- How globalisation has hindered development in China
- Wages still low
- Low skilled jobs- don't need education so difficult for people to improve themselves
- Working conditions- improving but still much worse than global norm
- Similar to economic slavery- child labour still an issue in some MNCs
- Profits generated by the products manufactured in China don't go to Chinese economy
- Nike could pull out of China anytime
- Facts
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