“The relocation of industry to low wage countries stimulated world trade
and capital flows”. Justify the statement. 5marks
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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.
(i) New economic policies of China collapsed USSR and communication in Eastern Europe brought many countries back into the world of economy.
(ii) Wages were relatively low in countries like China. It became the most attractive destination for the investment by foreign companies to capture global market.
(iii) Thus, the relocation of industries became a matter of profit for MMCs and stimulated world trade and capital flow to these low wage countries.
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