Some fairly dramatic changes have taken place in the demographics of the global economy over the past three decades. Several factors have played a significant part in shaping this change. Since the 1960s, four major factors have contributed to the changing world economy and the world trade picture. These factors are U.S. dominance in the world economy, U.S. dominance in world foreign direct investment, dominance of large multinational U.S. firms, and lack of trade with centrally planned economies. All of these have either changed or are rapidly changing the global economy of today. Match the correct category with the description of the change associated with it.
1. The Changing Nature of the Multinational Enterprise
2. The Changing World Order
3. The Changing World Output and World Trade Picture
4. The Changing FDI Picture
It is estimated that today’s developing nations may account for more than 60 percent of world economic activity by 2025, while rich nations’ activity, currently at 55 percent, may decline to 38 percent.
Toyota rapidly increased its investment in auto production facilities in the United States and Europe in the late 1980s and early 1990s.
One of the world’s largest real estate companies, the Dalian Wanda Group, hopes to become a world class multinational by 2020. Already, the company, which began in China in 1988, has assets in the United States, the United Kingdom, Australia, and Spain.
China continues to move toward greater free market reforms. If this continues for two more decades, China may move from third-world to industrial superpower more rapidly than Japan did.