Impact of Mistrust on the Global Economy

In: Business and Management

Submitted By lzb4480895
Words 1774
Pages 8
Impact of mistrust on the global economy

Name: Baihan Jiang
Student Number: 40051637
Date: April 26, 2013

Alone with the continuous development on the global economy in some developing countries, the country has the ability to form the overall vigor but it fails to have the corresponding improvement in the social life. As an important part in the society, the social trust has had a crisis. To solve this problem, the basic way is to use a more fair system arrangement and social guarantee to reduce and eliminate the behavior of its own security and interest security.

Social trust and social credit as an important social capital and social resources focus on it for the role of social intercourse activities. Realistic experience shows people that mutual trust plays a significant role in the communication of social exchange activities. The society is a community of people and its existence need certain trust. This can be investigated from two dimensions; the first one is the transverse dimension of the plane dimension. Society is made up by numbers of people, if the society is lack of trust of the confidence is too low, it will be very difficult to communicate among people. Generally, there is a certain amount of trust existing in any society; the difference is the extent of the trust and level. The second one is the vertical of longitudinal dimension. Because of the social division of labor, there is a certain class or grade difference between different people. Society needs a specific management, and the right to manage requires a particular level of structure, which means a hierarchical social order arrangement is needed.

Some economists believe that China has serious trust crisis, including the commercial credit crisis, the public good faith credibility crisis, interpersonal trust crisis and value crisis. What’s more, bureaucracy and corruption exist…...

Similar Documents

The Economy of Ukraine and Ukraine in the Global Economy

...The economy of Ukraine and Ukraine in the global economy Petrusha Helena Ukraine’s economy has a great potential to perform successful in the world. It can be characterized by such strong sides: - well educated labour force, - large domestic market, - well developed industrial base, - access to a variety of resources, including some of Europe’s best best agriculture land, significant coal and some oil and gas reserves, - strategic location connecting Europe, Russia and Asian markets. Nevertheless, Ukraine ended up among the least successful transition economies. The reasons for such a poor performance are different, but we should emphasize on the weaknesses deriving from overcentralised command economy during the Soviet period. I’d like to draw your attention to the Ukraine economy past in order to understand its current situation. Large and often inefficient state-owned factories, enterprises and collective farms wasted resources and emphasized quantity over quality. Prices were fixed and consumer goods were often in short supply. Excessive spending on the military hurt the civilian economy. For the last decades Ukraine is moving to market economy, where the forces of supply and demand and private ownership guide the allocation of resources. The transition to market economy is politically and socially difficult because of experience of rising inflation, unemployment and economic uncertainty before the long term benefits of market economy. The next point of......

Words: 658 - Pages: 3

Global Economy

...The world economy has changed greatly since the beginning of man. As a species we evolved each generation socially and especially economically. In the caveman days we traded basic things for food. An example of a trade would be wood for food. As we evolved we then developed a currency system trading gold or silver for items. Today the whole globe has a base economy and every nation is involved in the world economy. Economic globalization refers to the intensification and stretching of economic interrelations across the globe. Gigantic flows of capital and technology have stimulated trade in goods and services. Markets have extended their reach around the world, in the process creating new linkages among national economies. The world economy was developed by the emergence of the global economic order, internationalization of trade and finance, the power of transnational corporations, and the enhanced role of international economic institutions. The economy of the world really started to become internationalized after World War 2. There was an economic conference held in New England to help develop the new international economic order. Under the leadership of the United States and Great Britain, the major economical powers of the time in the north, both countries decided to reverse their protectionist policies of the interwar period. The countries at the meeting all arrived at a firm commitment to expand international trade, the participants at the conference also agreed......

Words: 819 - Pages: 4

How Cheap Labor in China Impact Domestic and Global Economy

...How Cheap Labor in China Impact Domestic and Global Economy Cheap labor means that the people who make the product work under unfair work trends, such as low wages and often underage workers. Cheap labor causes China to become an important component of "World factory". For a long time, the inexpensive and rich labor power is an advantage that China participates he international trade. However, along with a progress of technology, the competitive advantage of cheap labor in China is weakening gradually.(The Challenge,2008) In the 1990s, the yearly growth rate of China’s manufacturing industry average per person real wages was 7.1%, and the annual growth rate of labor productivity was 6.75%, showing these two targets almost equal. However, yearly average real growth rate of labor costs including non-staff costs reached 10.4%, and it was 1.5 times of yearly average growth in labor productivity. For all this, in the late 90's, the relative level of China’s labor costs was still lower than the relative level of international labor productivity. In 1999, the labor productivity of China was 9.08% of the U.S rate, 21.98% of South Korea’s rate and 51.50% of Mexico’s rate; during the same time, labor costs of China is 3.94%,11.27% and 35.66% of these countries’ rates respectively. The relative level of China’s labor costs is only equal to 40%-70% of the labor productivity’s relative levels in some developed countries such as the U.S (Advantages Trade,2007). As a result, China can make......

Words: 290 - Pages: 2

Global Economy

...THE U. S. IN A GLOBAL ECONOMY >The chapter provides background for ongoing changes in the American economy that link it increasingly to economic events in the rest of the world Increasing Importance of Trade >[Instructor’s note: Trade patterns can be divided into two major types of exchanges: merchandise meaning goods which are tangible such as cars and chocolates and services meaning items which are intangible such as insurance or financial products] >Figure 1.1 shows the trend in U. S. merchandise trade flows from 1869 to 2007; exports and imports were constant at about 7% of GDP until falling during the post-World War I decades but recovered to historic rates in the 1950s until taking off at a rapid pace of increase in the 1970s -According to the Council of Economic Advisors merchandise exports were $1.3 billion or 9.1 % of GDP and merchandise imports were $2.1 billion or 14.8 % of GDP in 2008 -[Instructor’s note: according to the Bureau of Economic Analysis the merchandise exports and imports were 8.7% and 13.3% of GDP in 2010] -Two recent divergences between the two streams of exports and imports as a percentage of GDP were the post world war II years when the American economy ran a trade surplus vastly out-producing the rest of the world and the period since 1980 when we have run a persistent trade deficit in merchandise imports >The trend in both percentages has been steadily upward since 1970 marking the pace of globalization >Although some economists......

Words: 1117 - Pages: 5

How the Tpp Impact the the Global Economy

...2015 Economy The United Stated, Vietnam, and ten other countries are working together to reach an agreement called the Trans-Pacific Partnership. Once completed, the TPP will boost the economies, lower barriers to trade and investment, increase exports, and create more jobs for the countries involved. To what extent do you agree with the above statement? Refer to specific examples in your answer. The global economy in the twenty first century has changed rapidly with the trend of trade liberalization. The appearance of some high valuable bi- and multilateral agreements might affect strongly trading activities in the future, especially the Trans-Pacific Partnership (TPP) agreement. This free trade agreement (FTA) is one of the most challenging and largest pacts not only for TPP members, but also for the international exchange. Therefore, the purpose of this paper is to ascertain the direct and indirect effect of the TPP agreement to the worldwide trading. In fact, if the TPP is signed by twelve members, it will boost the development of the global economy significantly, as well as might change the exchange policy around the world. The TPP is a comprehensive agreement, so its provisions cover various sectors of national economy, however, with the limitation of time and specialized knowledge, this paper only assess the outcome of the TPP on export of agricultural products, employment, and investment. To begin with, the provisions of the TPP will have tremendous impact on......

Words: 1659 - Pages: 7

Discuss the Role and Impacts of Transnational Corporations in the Global Economy (40 Marks) 

...Discuss the Role and Impacts of Transnational Corporations in the Global Economy (40 marks)  Transnational Corporations (TNCs) are companies which are able to co-ordinate and control its production, in more than one country during economic globalisation, examples of which include Nike, McDonalds and IKEA. These companies use differences between a country’s cost of production, natural resources, labour and state incentives to their advantage. This allows them to spread their resources and production between locations globally to minimise cost to the company. In recent decades the increasing wealth of TNCs has led to more dominated roles in the global affairs this has many impacts on the economy, global population and environment both positively and negatively. Transnational corporations have a very large role to play in the global economy. With the economies of developing countries, such as China and Brazil, generally growing due to the exchange of information and goods (globalisation) companies are keener to invest in them to increase their turnovers and overall development. TNCs have globally increased new job opportunities and new tax revenues even for the poorest of countries, by doing so they have contributed in reducing the levels of world poverty and have improved infrastructure for developing countries. TNCs are also incredibly wealthy. Ford and General Motors are two companies which exemplify the wealth of TNCs. Their combined annual income is equal to the GDP of......

Words: 1164 - Pages: 5

Impact of Nics on Economy

...Discuss the impact of Newly Industrialised Countries (NICs) on the global economy. (10) Newly industrialised countries are countries whose level of economic development ranks somewhere between the developing and first-world classifications. These countries have moved away from an agriculture-based economy and into a more industrialised, urban economy. They have experienced rapid growth over the last 40 years because they often have very low labour costs, attracting TNC’s and encouraging foreign direct investment. TNC’s get enticed by low labour costs, large English-speaking workforce and reduced trade tariffs. NIC’s are characterised by the fact that they are gaining an increasing share of the world manufacturing sector. The first generation of NICs were known as the ‘Asian Tigers’ – Hong Kong, Taiwan, South Korea and Singapore. They attracted many TNCs because of low cost of land, cheap labour, reduced trade tariffs, and expanding domestic markets (increasing demand). The Tigers achieved massive economic growth with Hong Kong's GNI per capita grew from $1800 in 1973 to $32,950 in 2008. However, the growth model of the Asian Tigers can be criticised. They have not followed the typical model of import substitution with an aim of becoming self-sufficient, instead they have focused on exports, arguably preying on the on the healthy economic state of MEDC’s. But this activity isn’t sustainable within the global economy, from the 1960s to the 1980s the Tigers pursed this......

Words: 701 - Pages: 3

Discuss the Role and Impact of Tncs in the Global Economy

...Discuss the role and impacts of TNC’s in the global economy. (40 marks) Transnational Corporations (TNC’s) play a large role in the development of the global economy, through the sharing of research, trade and technological advances between the different countries. They also play a big part in increasing the interconnection in the world’s economic, cultural and political systems, otherwise known as globalisation. Nevertheless there are both positive and negative impacts that TNC’s bring to the global economy, socially, economically, politically and culturally. The world has seen a huge rise in the number of Transnational Corporations. Since the 1970s the number of TNCs has risen from 7,000 to over 60,000. To begin with, around 95% of manufacturing took place in the industrialised economies such as the UK. However since then decentralisation has occurred, as Transnational Companies take advantage of global operational differences such as the fact that labour can be offered at more competitive prices in developing countries. Subsequently global shift occurred which is the filtering down of manufacturing industries from the developed countries to lower wage economies. For example, automation, used in company’s such as Jaguar Land Rover to build many parts of the car, has contributed to a decline in the secondary sector in the UK. As can be seen in the Rostow Model of Development, stage 5 (the age of high mass consumption) the initial exploitative industries move......

Words: 1060 - Pages: 5

Global Economy

...1) GDP : A a. Consumption ( C ) is the largest component of GDP. b. In short term, the Consumption variation might be responsible for the fluctuations the economy suffers. c.  G is the spending the overall taxes, common goods of the citizens of a given country. B a. The GDP is more steady, the industrial production fluctuates more. C a. GDP is important indicator of the health of a given economy, it serves on an internal level to monitor the effectiveness of spendings etc… and on an external level to choose good economic partners. It is also used to forecast and take decisions based on these forecast concerning to future needed investments. D a. GDP is about nationals and foreigners within the boundaries of a country. GNP is about citizens of a given country wherever they producing and consumming geographically. E a. The major component determining long run economic growth would be the deflator which takes into consideration the inflation/deflation, so mastering the inflation rate of a given economy makes its growth more steady and less prone to collapse. 2) Unemployment rate d. In economics Okun’s law states that it is empirically observed that 1% increase in unemployment rate will impact the GDP by -2% compared to the potential GDP. e. This relationship exists because GDP is directly linked to consumption which makes roughly 70% of it, and unemployed have less money to spend, so a lower consumption. 3)......

Words: 504 - Pages: 3

Global Economy

...Introduction This report will examine the world economy in general these issues. In this way, people can learn basic information about the world economy. Also global economy can be seen as the economy of global society and national economies – as economies of local societies, making the global one. It can be evaluated in various kinds of ways. It is inseparable from the geography and ecology of Earth, and is therefore something of a misnomer, since, while definitions and representations of the "world economy" vary widely, they must at a minimum exclude any consideration of resources or value based outside of the Earth. This report would talk about several definition would used during the world economy. Finding 1. Free trade Free trade is the interchange of goods and services (but not of capital or labor) unhindered by high tariffs, nontariff barriers (such as quotas), and onerous or unilateral requirements or processes (businessdictionary, 2015). The North American Free Trade Agreement is an agreement signed by Canada, Mexico, and the United States, creating a trilateral rules-based trade bloc in North America. U.S. exports to Canada and Mexico support more than three million American jobs and U.S. trade with NAFTA partners has unlocked opportunity for millions of Americans by supporting Made-in-America jobs and exports(businessdictionary, 2015). As the U.S.’ two largest export markets, Canada and Mexico buy more Made-in-America goods and services than......

Words: 3862 - Pages: 16

Global Economy

...The heavily issue of globalization is made extremely clear in the travels of a T-shirt in the global economy. Pietra Rivoli talks about the politics and human element behind globalization by telling her life story of her t-shirt. Through the story of her t-shirt, Revoli shows how supportive globalization often reduce and unrecognizable issues behind international trade environmental problems caused by factories and industries. Pollution is the introduction of harmful impurities, impure, unclean and polluted substance into the environment. Its existence is created and mostly caused by human actions, and the outcome of this situation can end up in natural disasters. Industrial waste poured into rivers have led to dramatic changes and problems in our societies. Most people use to swim and have a good time in river in their neighborhood, but they cant do all of this again because the water have been polluted with poisonous chemicals wasted in the river. Big companies and industries pour unwanted, poisonous chemicals into rivers to save money for the company. As a result of this, the chemicals end up in neighborhoods and the water starts to smell, block up nose and spots on both adults and children. Employees who work in theses companies are exposed to all kinds of chemicals and the place adhesive smell horrible like burned plastic, which end up in bleeding of noise. The workers who work at these companies sometimes even end up losing their jobs because they cant......

Words: 582 - Pages: 3

Impacts on Global Economy

...Impact of Housing Market Crash “The Impact of housing Market Crash on Global Economy” The housing market in the United States became a nightmare for many people who had taken out loans found and they were not able to pay their mortgage repayments. When the value of homes decreased, the borrowers realized themselves with negative capital. The negative movement of housing sector did effect the United States economy. Individual house owners and investors could not react to the situation and their properties lost value. Rates of mortgages increased extremely high that’s why mortgages no longer became affordable for many people, and thousands of mortgages defaulted. Many banks and investment organizations start have difficult time finding money due to massive losses in mortgage. This also caused slow down the housing market, growth of new home building and putting many people in unemployment environment. Depressed housing prices made many homes worth much less than the mortgage value therefore some owners chose just walk away instead of pay their mortgage. The housing sector is one of the most important chains in the economy. After the housing market crash, the economy could not run as usual because this chain had a big impact in the United States economy. Therefore the other fields and sectors ruined by the circumstances. Briefly, the domestic crisis started to change the consumer behaviors. People reduced their spending and that effected the volume of......

Words: 2394 - Pages: 10

Impacts of Globalisation on Indian Economy

...IMPACTS OF GLOBALIZATION ON INDIAN ECONOMY INTRODUCTION TO GLOBALIZATION: Globalization has many meanings depending on the context and on the person who is talking about. It refers to the increasing global relationships of culture, people and economic activity. Guy Brainbant: says that the process of globalisation not only includes opening up of world trade, development of advanced means of communication, internationalisation of financial markets, growing importance of MNC’s, population migrations and more generally increased mobility of persons, goods, capital, data and ideas but also infections, diseases and pollution. The term globalization refers to the integration of economies of the world through uninhibited trade and financial flows, as also through mutual exchange of technology and knowledge. Ideally, it also contains free inter-country movement of labour. The United Nations Economic and Social Commission for Western Asia defines globalization as: "a widely-used term that can be defined in a number of different ways. When used in an economic context, it refers to the reduction and removal of barriers between national borders in order to facilitate the flow of goods, capital, services and labour... although considerable barriers remain to the flow of labour... Globalization is not a new phenomenon. It began towards the end of the nineteenth century, but it slowed down during the period from the start of the first World War until the third quarter of the......

Words: 1807 - Pages: 8

The Global Economy

...THE GLOBAL ECONOMY FEATURES OF THE GLOBAL ECONOMY Nature of the global economy and globalisation The global economy/world economy consists of all the countries of the world that contribute to gross world product through the production of goods and services. It is often discussed in relation to the increased integration of economies. Gross world product (GWP)/world GDP is the sum of the total output of goods and services by all economies over a given period of time. It is measured at purchasing power parities (PPP) which adjust exchange rates to equalise the price of identical goods and services across economies. Globalisation is the increasing integration of countries and their economies, resulting in the increased impact of international influences on all aspects of life and economic activity. The economic indicators of globalisation include: * international trade flows * international investment and transfers of technology * international finance * international labour markets Trade: * Greater growth but with greater volatility than GWP * Growth of world trade has been around twice growth of real GWP since the 1970s, but contractions in the growth of world trade have also been more severe (World Economic Outlook, IMF, 2009) * Greater growth in developing and emerging economies * Exports from developing and emerging economies grew 9.8% from 2002 to 2008 cf. 5.2% growth in developed......

Words: 306 - Pages: 2

Impact of Ipo on Indian Economy

...The impact of IPO’s in Indian economy 1) An Introduction to Indian economy. 2) IPO 3) How IPO’s contribute to business development 4) How development in business contribute to Indian economy 5) Reliance IPO’s 6) History and future scope for IPO’s 7) Failure of facebook IPO (1) The economy of India is the eleventh largest in the world by nominal GDP and the third largest by purchasing power parity (PPP) The country is one of the G-20 major economies and a member of BRICS. On a per capita income basis, India ranked 140th by nominal GDP and 129th by GDP (PPP) in 2011, according to the IMF. Currently the GDP of India worth 1.676$ trillion and the GDP growth rate was 6.5% for (fy) 2012. The Indian Equity market is divided in to two parts Primary market - where the share is first issued in the form of IPO (Initial Public Offering) and after issuing the share it is listed on exchange and share is traded on exchange where shares can be bought and sold this is secondary market. In India mainly there are two exchanges –NSE (National Stock Exchange) BSE-Bombay Stock Exchange. The BSE is the oldest exchange in India (started in 1875).NSE started operation on 1994. Today NSE outpaced BSE in volume of trade (2) IPO or Initial Public Offer is a way for a company to raise money from investors for its future projects and get listed to Stock Exchange. Or An Initial Public Offer (IPO) is the selling of securities to the public in the primary stock......

Words: 899 - Pages: 4