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Example research essay topic: Lost Their Jobs Cost Of Production - 1,612 words

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Competition Rapid economic growth in China can give a powerful incentive to Great Britain to speed up its local economic reforms. According to reasonable assumptions, it can even redouble the annual tempo of economic growth within the next dozens of years. Britain can maximize its profits from integration of China into British economic model and minimize its losses in case the government will make its economy more flexible, enhance mobility between various branches of economy. What concerns the fears of mass dismissals, people who lost their jobs because of the fact that global competition forced many British manufacturing companies to shift their production to China, dismissed workers can train for a new profession. The other side of the medal is that British government provides workers who lost their jobs with generous doles.

Thats why some workers prefer not to get another profession but live for dole. In conditions of flexible labor market many workers who lost their jobs will be in demand in other trades that are more efficient and productive. In such a way, the accusations that refer to the fact that China steals British workplaces sound ridiculous and naive. The fears concerning Chinese threat appear in result of the several myths: China is pleaded guilty in recent dismissals in manufacture industries. This fact can be explained by other factors contributed to dismissals.

One of them can be related to increase of foreign trade deficit. China dramatically increased its share in the world market. However, during the last dozen of years foreign multinational corporations and joint-ventures were conductive to growth of Chinese export. In other words, riot growth of export was caused by foreign companies that shifted their manufacture to China, not by paring of world economy by Chinese businessmen and other Chinese manufacturers; Some economists consider that even high-tech industry of Great Britain is runs the danger of Chinese expansion because China focuses attention on maintenance and merchandising policy reconsidering high tech products like mobile phones and personal computers. Really, electronic goods make up approximately 35 % of Chinese export.

However, Chinese import of electronic goods also increased drastically; China is a country of cheap labor force; in such a way it has cheaper production costs. Therefore, all manufacturing companies will shift their manufacture to China. First of all, such position is not correct. Low wages (cheap labor force) is often accompanied with low productivity and low effectiveness.

When the productiveness increases it will inevitably result in increase of wages or rate of exchange. In case modern technologies will increase average productiveness in China to the level of Great Britain, and world industry will experience changes, surplus of labor force in China can disappear and wages can increase. Secondly, the position of free trade depends rather on comparative advantages than on absolute ones. In case we surmise that China is able to produce commodity cheaper than Great Britain, it will get more price advantages in labor-intensive sectors of industry because China has a surplus of low-qualified workers. Great Britain, in its turn, will always have an advantage in other industries that demand high-qualified professionals. In such a way, situation concerning competition and its aspects in Great Britain is not critical.

No doubts, the last five years became the turning point in re-allocation of production capacities in the world and China became the main manufacturer of various kinds of goods. Well-known brands with the rare exception shift their manufacture to China. Actually, there are two main aspects of this problem. From the one side, Chinese manufacturers decrease prime cost of production to the minimum mainly because of cheap labor force and low expenses of component parts. In reality, there is nothing to worry about.

Such situation is quite natural for the world market. From the other side, there are Chinese manufacturers that undertake efforts to decrease prime cost of their production by lowering quality. If several years ago they supplied their production to the Third World Countries, today they enter the British market. This situation is more dangerous for the British economy because China produces commodity that correspond to no standards of quality. It is very difficult to make differentiation between those types of manufacturers.

There are several ways to withstand low quality production: to implement strict control and to increase the level of consumers culture. Actually, this problem is much more dangerous for British economy that shifting manufacture to China. What concerns competition, it is the integral part of healthy economy. The company-manufacturer should have the aim to improve the economy of Great Britain. It should obey to civilized rules of the game.

The main aim is not to struggle with other companies, but to cooperate with each other. There are many ways to decrease prime cost of commodity. One of them is to decrease the cost due to logistics and purchasing price of the component parts. In correlation price-quality quality of production should occupy the first place. Low cost of production is good for the British citizens. No wonder that people desire to purchase the products for lower price.

However, we need to take into account that low cost of production comprises not only of low prime cost and cheap labor force. The salary of an average Chinese worker cannot be compared with the salary of British employee. It is less by six times compared to the salary of Mexican worker: Chinese employee gets approximately $ 0. 40 per hour (See Chart 5). Besides, there are billions of migrants from poor Chinese areas looking for a job in cities (See Chart 10). Taking into account this fact, the salary of Chinese worker is not going to increase during the next years. Chinese formula of success consists in low-qualified workers and cheap but well-educated managers together low-wage costs with high-market growth (Harrington n.

p. ). The cost of production in China is low also because Chinese manufacturers have no large-scale projects that make researches, new developments and other elaborations. No wonder that majority of British citizens prefer well-recognized traditional brands spending billions for R&D annually. The most reliable high tech products are launched by the leaders of industry. In such a way, if the British companies cannot compete with China on wages, they have to compete on innovation (Johnson n.

p. ) The manufacturing market is very flexible and dynamical environment. The manufacturers are in permanent search for new solutions and try to follow modern tendencies. Manufacture in China, in such a way, forces other companies to improve their products and to propose new products that open new category of output. In such a way, the process of development of technologies and production in conditions of competition between traditional British manufacturers and those British manufacturers who shift their manufacture in China is conductive to its perfection and improvement. Such situation is quite usual event for market processes and imposes no threat to the British economy. Another important aspect that witnesses for competition is that competition is very important part of the marketing micro-environment of the company.

Competition is conductive to development of effective strategy and tactics of functioning of the company. From economical point of view, competition is economic process of interaction and cooperation. Competition makes work of the company more effective. Besides, the market obeys to the rule of the strongest. In such a way, competition will decrease the number of companies and will leave the strongest. The fear that Chinese growth of export will occur at the expense of other countries like Great Britain and others, is based on a manufacturing piece of cake consisting of permanent trade share belonging to the country.

According to this opinion, each country has its own niche in the market and one country can ruin the welfare of the other if the second country will shift its manufacturing capacities. In reality, trade can be compared to a game with positive outcome. The more participants it has, the more possibilities have the countries. Under such conditions the countries have an opportunity to manufacture more goods using the same quantity of labor force.

Besides, the commodity and services become less expensive. Free surplus of labor resources should be used for manufacture of new production and rendering new services. In such a way, it will contribute to increase of living standards of British citizens. By other words, long-term prosperity of Great Britain as the country with well-developed economy depends on ability of the country to create and satisfy new demands of the consumers because Chinese workers (even if they will manufacture new products) are not able to purchase them due to low purchasing capacity.

In case the British economy will retain its position, loss of working places at expense of increase of effectiveness of manufacture or at expense of shift of manufacture to the countries with cheap labor force (like China) will result in increase of living standards. Competition, in its turn, will be conductive to this process. In conclusion Id like to underline that healthy competition will have positive outcomes for British economy. The fear of mass dismissals has no grounds. What concerns unemployment, those British workers who loose their jobs will receive a perfect opportunity to change their professions and to become more qualified specialists with high salary.

Therefore, approval of competition imposes no threat to British economy and to decrease of living standard of its citizens. References: Johnson, Alan. (2006). China You Aint Seen Nothin Yet. The Smith institute, London. web Harrington, Anthony. Making it in China, UK manufacturing in the Far East.

Retrieved November 28, 2006. web RBC Financial Group. (July 2003). Current Analysis. Chinas Impact in the Global Economy. web WTO. (2004).

Open Sesame Chart. Thomson DataStream. Economist Intelligence Unit.


Free research essays on topics related to: british economy, cost of production, lost their jobs, cheap labor, labor force

Research essay sample on Lost Their Jobs Cost Of Production

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