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Chocolate Bar Game- What have you found out? 15 mins Chocolate Bar Game- What have you found out?   ASEAN EU Members Main roles Which national governments are instrumental in promoting free trade within the trade bloc? Similarities Differences Relations A* Aim high: How significant a role do you think Trade Blocs play in the globalised world?

5mins Aim How far are political and economic decision making important factors in the acceleration of globalisation? Learning Outcomes A* - I will evaluate to what extent globalisation can spread to new global regions through political and economic decisions. I will examine and contest the role of governments in attracting or shunning FDI. A - I will explain how globalisation can spread to new global regions through political and economic decisions. I will examine and contest the role of governments in attracting or shunning FDI. B - I will explain how globalisation can spread to new global regions through political and economic decisions. C - I will describe how globalisation can spread to new global regions through political and economic decisions.

Starter What is FDI? Write a definition 5 mins Starter What is FDI? Write a definition Where in the world you think attracts the most FDI on the map?

Foreign Direct Investment 10 mins Foreign Direct Investment Think-pair-share. What might make a country attractive to investors? Write your ideas down…

Foreign Direct Investment 10 mins Foreign Direct Investment What might make a country attractive to investors? Wage rates (cheaper employment opportunities) Labour skills in the population Size of economy and population Political stability (little risk of a war) Raw materials Physical location and features (climate, landlocked) Task Pick a few physical and human factors, explain why they are important to attracting FDI.

5 mins Global Ports Ships and hundreds of ports that serve them around the world handle tens of thousands of loaded containers a day. These ports play a crucial role in facilitating global trade. They help ensure economic growth, the creation of jobs, competitiveness in world markets. The revenue generated makes up about a fifth of our world economy. If you take a look at the map below you can see the shipping lanes across the oceans that are vulnerable to weather, tsunamis, pirates and other risks. Each line represents a vital link to our livelihood.

The Multiplier Effect leading to… Cumulative Causation 5 mins The Multiplier Effect leading to… Cumulative Causation Multiplier Effect- The positive spin-offs that follow an initial investment (e.g a new car factory) in a region. Other firms may gain business supplying parts, the increased spending of workers stimulates the service sector, and higher tax revenues can be invested in education and infrastructure. Cumulative Causation- A model that explains why wealth becomes concentrated in certain places. Globalisation increases the chances of this, as local people can find markets for their products or attract employers with their skills

5 mins Global Hubs Global hubs are ‘cores’ that demonstrate a number of intense connections to the rest of the world. Places that others wish to connect to. In some cases these are the obvious World Cities such as London and Tokyo. In others, they may possess a particular attribute that others wish to connect with, rather than displaying a full range of connections. Many of course, host the major TNCs of the world. They tend to be places of increasingly diverse populations are demographic flows, as well as flows of finance, trade and ideas, move towards them.

5 mins Global Hubs A government can encourage the formation of a hub by allocating an area as an export processing zone – a small industrial area often on the coast) where favourable conditions are created to attract foreign TNCs. These conditions include low tax rates and exemptions from tariff and export duties. They may be technopoles – a cluster of technologically innovative businesses and research institutes eg Silicon Valley California, Silicon Fen Cambridge (UK). They will experience a multiplier effect - where there are positive spin offs from investment. Other firms may gain business supplying parts, the increase spending power of the workers stimulates the service sector and higher tax revenues may be invested in education and infrastructure. Business clustering may occur – eg central London is home to a cluster of television production companies and universities that deliver media courses.

How have individual governments contributed to the spread of globalisation into new regions?

Individual National Governments UK and China You will look at the political and economic decision making made by these two national governments have accelerated of globalisation. How the creation of special economic zones, government subsidies and attitudes to FDI have contributed to the spread of globalisation into new global regions

China Why does China have potential to develop Global Hubs? 5 mins China Why does China have potential to develop Global Hubs? Government backing Many Chinese companies TNCs would do business with are part-owned or backed by the state. This reduces risk of losses for TNCs. Politically stable The Communist party has been in power since 1949. Stability reduces risk for TNCs. Emerging market As wealth trickles-down into Chinese population via the multiplier effect there is a huge potential market to sell goods. Positive image China used the 2008 Olympics to reimage itself as a forward looking, powerful and wealthy country. This was very successful despite criticism about Tibet. Stable currency The exchange rate of the Yuan is pegged to US$ and backed by the Chinese government. Stable exchange rates reduce risk of losses. Good infrastructure Chinese government will build large industrial estates with mega-buildings (25km2), roads, reliable water and electricity supply and a management company which will find TNCs migrant employees bus them in Cheap skilled labour Labour is much cheaper in China than in the EU. This reduces costs and maximises profits. The increase in highly skilled workers is driving up wages (wage inflation). Prolonged spending on health & education provided a healthy, literate and skilled workforce. Cheap freight In the early 2000s shipping fees (freight duty and fuel) were low. However there is now a shortage of shipping slots driving up the price. Companies with larger volumes get priority bookings. Relatively low prices still enable TNCs to outsource manufacturing to far off places and still make money. Tax incentives The Chinese government has set up SEZs (Special Economic Zones) where businesses can import raw materials, process, manufacture & re-export them paying reduced tariffs or duties (taxes). This cuts costs and maximises profits. SEZs have economic laws which are more liberal and open than in the mainland. Low Risk & High Returns See also page 173

China Special Economic Zones 5 mins China Special Economic Zones The Chinese government has set up SEZs (Special Economic Zones) where businesses can import raw materials, process, manufacture & re-export them paying reduced tariffs or duties (taxes). This cuts costs and maximises profits. SEZs have economic laws which are more liberal and open than in the mainland. It is much easier for TNCs to operate in SEZs.

Source: http://www.qdepz.com/en/index.htm

China in Africa Turn to Page 155 Task 10 mins China in Africa Turn to Page 155 Task What has China invested most heavily in Africa for? Describe which regions have been most affected by FDI How has the creation of special economic zones and attitudes to FDI contributed to the spread of globalisation into new global regions?

The UK A* Aim Higher Task 10 mins The UK Task How and why did the UK embrace globalisation? Were there any ‘losers’ from the governments approach? How has the creation of subsidies and attitudes to FDI contributed to the spread of globalisation into new global regions in the UK and beyond? A* Aim Higher Do you think China or the UK has been more successful at implementing strategies? Which country would you say is ‘better connected’ Which country has made the greatest impact in helping to accelerate globalisation?

5mins Plenary How far are political and economic decision making important factors in the acceleration of globalisation? Outline the similarities and differences between the adoption of globalisation by the UK and China.

Homework Review What does switched off mean? 10 mins What does switched off mean? What does Toby Shapshak say about innovation in Africa? Give some examples of technological innovation in the continent (be place specific). What is PESA? Give some statistics on its usage. Summarise Toby Shapshak’s argument, what is his message about switched on and switched off countries? Challenge: do you agree? Bring in your own knowledge.

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