Unit 5 The UK Economy

Focal Points Absolute decline and relative decline of British economy The privatization in the 1980s The main sectors of the UK economy Primary industries(第一产业) — Agriculture & Energy production Second industries: the manufacturing industry — e.g. the aerospace industry Tertiary industries/ service industries (第三/服务产业) Agriculture 英国经济的绝对衰败和相对衰败 20世纪80年代的私有化

Focal Points Energy production The offshore oil industry The manufacturing industry The City of London The aerospace industry

Warm-up Questions When was the British economy dominant in the world? By what time was the UK overtaken by other countries, such as the US and Germany? 1900 Which country does “the Jewel in the Crown” refer to? When did it gain its independence? India, 1947 What does “The City” refer to according to the text? The city of London, a financial center in the world

Absolute Decline and Relative Decline Overview dominant in the world: 1/3 of the world’s manufactured goods; 1/2 of the world’s coal, iron and cotton; shipping greater than the sum of the rest of the world by the 1880s by 1900 from 1945 (WWⅡ ended)- now Overtaken by the US and Germany Thanks to other countries’ more rapid development after the war, the UK slips from being the 2nd largest economy to being the 6th , although with steady economic growth and rapidly increasing living standard and remains one of the G7 large industrial economies

Causes DECLINE huge military expenditure during decolonization heavy post-war debt colonies independence DECLINE Lack investment in modern equipment and new products

Causes for Decline of UK economy (1945- ) ① debt---finance the war a. selling many of its accumulated overseas assets b. borrowing large amounts from the United States and Canada.

② independence The era of empire was over. India the rest of the empire ③ military decolonisation--a substantial and expensive military presence b. one of the shapers of post-war world ---substantial military contributions ④ The existence of the old factories with pre-war products (very low proficiency) ④ Low rates of investment

Relative Decline of the UK economy The UK has experienced an economic decline since 1945. But this is a relative decline rather than an absolute one. Britain is wealthier and more productive than it was in 1945, but since other countries developed more rapidly, it has slid from being the second largest economy to being the sixth.

Recent History 1970s 1980s 1990-1992 Recession: the economy shrunk by 2.3% 1995 A particularly bad period: high rates of inflation (25%); many workers’ strikes; the fall in the value of the UK currency When the conservative party under Margaret Thatcher was in power, and extensive program of privatization was carried out. The reform also led to increasing unemployment Overall it is 2nd only to the US as a destination for international direct investment, and it is the 2nd biggest international investor in the world

Recent History a change of government 1970s: high rates of inflation, strikes, the fall in the value of UK currency, British industry doing badly negative economic facts a change of government the Labor Party the Conservative Party

a radical programme of reform bureaucracy was reduced. (small government) an extensive programme of privatisation (free market) successful---in some ways negative aspect---unemployment

The Current UK Economy national economies 1.4% 22% 65% primary industries secondary industries tertiary industries 1.4% 22% 65% agriculture fishing mining manufacture complex goods from primary products banking insurance tourism the selling of goods

“The City” London Stock Exchange Historic area at the center of London one of the top 3 financial centers in the world: banking, commodities & insurance London Stock Exchange The City Shown within Greater London Aerial view of the City of London

London Stock Exchange The heart of “The City” is London Stock Exchange, founded in 1801, one of the busiest share-dealing centres in the world. It is a part of the London Stock Exchange Group (伦敦证券交易所集团 )

Case Study: The Aerospace Industry 1908 the first flight was made in UK. WWI rapid development---the biggest and most sophisticated after WWI, the civil aviation industry [most significant (inter-war) --- radar] 1937 three major branches 1939 spurt of technological change after WWII, problematic (competition) [the answer collaborative projects] [most successful---civil airliners]