Question

Write a note to explain the effects of the following: The decision of MNC’s to relocate production to Asian Countries.

Answer 1

Hint:
It’s of the effects of this decision of relocation led to economic growth and the development of Asian countries like India and China.
It was a profitable factor for foreign MNCs.
Goods were cheaper than the other countries.

Complete answer:
The MNCs' plan to move manufacturing to Asian countries has stimulated global trade and capital flows. This migration was due to the low-cost system in Asian countries and lower salaries. The Asian nations have benefited when jobs improved and this also resulted in rapid economic transformation. The decision to move manufacturing to Asian countries was taken by the international MNC'S trying to win the global market as salaries in Asian countries are lower, which stimulated world trade. The impact of the decision of MNCs to relocate production to Asian countries is because of the following reasons: Due to this relocation, the MNCs got the advantage of cheap labour. New technology and production methods are initiated by Asian countries. People in Asian countries got a greater choice of goods and services. Besides this, greater employment opportunities were given. The Growth of economies was the result of rapid economic transformation.

Note:
The relocation decision was made on account of lower wages and low-cost structure in Asian countries.
Relocation has helped both the developed and the underdeveloped countries.
It has also bought money, employment and material to Asian countries which have increased their Global Production network.