“The relocation of industry to low wage countries stimulated world trade and capital flows.” justify the statement

CBSE Class 10 CBSE Class 10 Social Science
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1

“The relocation of industry to low wage countries stimulated world trade and capital flows.” justify the statement.

2

THE Industrial World was hit by unemployment that started from mid -1970 and remain till the end of 1990. From the late seventees, MNCs began to shift production to low waged Asian countries.

  • New economic policies of China collapsed USSR and communication in Eastern Europe brought many countries back into the world of economy.
  • Wages were relatively low in countries like China. It became the most attractive destination for the investment by foreign companies to capture global market.
  • Thus, the relocation of industries became a matter of profit for MMCs and stimulated world trade and capital flow to these low wage countries.