17 - Export Orientation

ucla | GEOG 4 | 2023-12-03 22:02

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Table of Contents

• Why?
  • Practical Logic of Export Orientation for Econ. Growth
  • Vulnerabilities
• Where?
  • China
  • Other Places/More In-depth Intra-country
• Conclusion

Why?

• import substitution vs export oreinted manufacturing
  • historically import sub allowed for econ. domestic growth
  • but only sustainable by export oriented production
  • size of countries -> economies of scale
  • 1920s start imitation of US and Japan during industrial rev
  • after 1970s export oriented made more sense for small countries, epzs for strategic partynerships with multinational biz and FDI

    Practical Logic of Export Orientation for Econ. Growth

    1. manufacture strage of econ growth 1.
    2. phases of production and factors of production (product life cycle metaphor) 1. 2. 3.
    3. decline in transport costs and rise of global supply chain 1. 2.
    4. From EPZs to industrial districts 1. 2.

Vulnerabilities

• fuel costs and sustainability of long dist supply chains
  • 
• JIT manufacture and flexibility of components -> adjacency advantage e.g. mexico and US
  • 
  • 
  • 
  • 
• factor endowments not forever, e.g. low labor costs hindered by aging labor forces
  • 
  • 
• geopolitics of glob econ comp and rise of protectionism in historic core
  • 

Where?

• growth of globval manufacturing output in 1995-2005
  • 
• three tests of industrialization
  • (1) >= 25% of GDP in industry
  • (2) >= 60% of industrial output in manufacturing
  • (3) >= 10% of total pop. in industry
  • Pathways of success:
    • E->C->A: mining -> resources -> manufacture
      • rare, possibly african resource heavy countries
      • Saudi arabia w oil
    • D->B->A: manufacture -> expansion -> employment
      • common in SE/East Asia and Mexico, Brazil
  • 
• Newly Industrializing Countries (NICs)
  • 
• NOT happening in Middle East and Africa except South Africa
  • conflict, split up states, lack of solidarity, etc.
• BRICs - full on export-orientation
  • 
  • 

    China

• China as most imp NIC in BRICs
  • 
  • 
  • period of growth passed
  • 
• Sino-dependency of neighbors and world economy since 2005 - major creditor to US, known as global growth engine
  • 

    Other Places/More In-depth Intra-country

• Cities as major centers of new industrial growth w pop growth wo econ. growth (e.g. Asia, Africa) -> incomes stagnate
  • 
  • 
• Cities beyond core rising in global importance
  • 
• Semi-periphery increasingly responsible for worldwide econ growth
  • manufacturing etc
  • 
  • 
• Middle Income Trap
  • 

    Conclusion

• countries match their factor endowments and multinationals global supply chains
• opening up of the world economy since 1970s w tariff reductions, end of bretton woods, etc.
• competitive advantage built by some countries on the base of import substitution and capital investment in infrastructure and human capital
• emerging frim-off-shoring economies of scale and agglomeration in some major cities outside of core: beijing, madras epz, etc