The Future Of Currency 1690 Essay Example

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Despite limited financial resources for capital construction, China sought to increase production by acquiring factories from other countries and constructing new ones using local resources. By 1978, the pursuit of new projects had reached a level reminiscent of the Great Leap Forward. Additionally, the government relaxed restrictions on the entrepreneurial activities of peasants in order to encourage agricultural production. In the late 1980's, there was a decision to further expand private marketing.

The following action was to enhance the allocation of land to the peasants. Currently, the peasants were no longer answerable to the government regarding their utilization of private plots. They had the freedom to cultivate whatever they desired, whether for selling to the government or private markets. Consequently, there was extensive reconstruction and a significant influx of foreign investments. China's transformation into Asia's center for finance, trade, and culture was made possible by all these developments.

The production of rice and other rice-related products, such as rice wine, exceeded $1 million in 1984. This resulted in an annual income of approximately $200 for the residents, enabling them to upgrade from mud-and-straw hats to sturdy brick houses. Presently, Shanghai is undergoing extensive construction with more than 20,000 projects underway. Additionally, there are 27,000 companies engaged in constructing bridges, tunnels, flyovers, ring roads, hotels, villas, golf courses, and public housing. This rapid development has contributed to a national growth rate of around 10% per year. As a consequence of this growth rate increase , Chinese citizens now possess significant savings in banks along with stocks and bonds. Banks have reported a sixty-fold increase in savings and this upward trend continues.

This has resulted in China joining the global

economic community and becoming the third largest economy globally. Currently, China is ranked 11th worldwide regarding exports of trade goods (54). Meanwhile, another nation off the coast of China underwent growth. Japan observed an extraordinary economic revival after the destruction caused by World War 2's bombing of Hiroshima. Under conservative post-war governments, Japan made notable advancements. The country initially received a $2 billion boost from American aid and additionally benefited from demand for military equipment due to the Korean War.

By the early 1970s, Japan had become the world's third largest steel producer and a prominent shipbuilding nation (Rich 191). It was also highly respected for its manufacturing of general engineering and chemical products. Additionally, their motorcycles achieved victory in import races in Europe, while their cameras, transistor radios, cars, sewing machines, TV sets, and optical goods successfully competed globally.

Currently, Japan holds the second largest economy worldwide after the United States with a GDP of $3,385 billion dollars. In 1987, the per capita income of Japanese citizens surpassed that of Americans, reaching almost $20,000 (World 247). This noticeable disparity can be attributed to the fact that Japanese individuals saved five times more from their salaries compared to their American counterparts.

The Yoshida doctrine led to a decrease in military spending, which played a crucial role in Japan's economic progress. With approximately $1 trillion in net assets, Japan became a significant global financial power. During the period from the 1950s to the 1970s, Japan experienced an average growth rate of 11%, thanks to funding support from the Bank of Japan for commercial bank investments. The remarkable levels of savings and investments, notable productivity growth, and strong social consensus

made Japan's economic advancement stand out on a global scale.

Japan's dominance in certain sectors of global manufacturing, particularly electronics, was achieved by prioritizing long-term gains rather than immediate benefits. Manufacturing played a crucial role in their economy, improving both quality and price. Over the years, Japan has consistently enhanced its economy by transitioning from energy-intensive heavy industry to high-tech and high-value industries like semiconductors, industrial robots, and computers.

Due to the increase in the value of the yen, Japanese manufacturers started making significant investments in foreign countries. This resulted in a significant outflow of money from Japan and caused many Japanese financial institutions to become major players in global financial markets. Additionally, Japan became known as the largest importer of agricultural products worldwide, importing 60% of its food (Rich 192).

Japan is known for its exceptional efficiency per unit of land. As prosperity grew, there was a surge in demand for consumer goods, resulting in the widespread adoption of Western-style clothing and the inclusion of wheat products, meat, and vegetables in Japanese cuisine instead of rice. Traditional sake gave way to Scotch whiskey as modern gadgets such as color televisions, electric sewing machines, washing machines, and motor cars became highly coveted by the Japanese people. Additionally, Western sports gained immense popularity with the establishment of approximately 7,000 golf courses by the 1970s.

In September 1986, Japan achieved a substantial current account surplus of $10 billion USD (World 251) through meticulous government planning, growth supported by favorable depreciation allowances and accessible loans, as well as subsidies and lenient taxes. The remarkable revival of Japan after its defeat in the Second World War showcases the unwavering determination and continuous endeavors

of its entire population, combined with exceptional financial and diplomatic acumen. Vietnam has now joined this group of countries that have emerged as highly profitable prospects.

During the 60's and 70's, the Vietnam War had a detrimental impact on the country's economy, resulting in extensive damage. The economy was gradually recovering through a five-year plan system that aimed to restore infrastructure, forests, and farmland damaged by three decades of war. In the mid-1980s, the government initiated a liberalization campaign to promote the growth of new resources.

In 1987, several measures were introduced to support businesses. These included tax breaks in the first year, opportunities for bank loans, and autonomy over price control for specific companies. Exporters were allowed to borrow foreign currency for importing raw materials. Cash incentives were also provided, leading to farmers earning around 40% profits (Gibney 47). Furthermore, the government started giving bonuses and piece-rate wages to recognize hardworking employees. In 1988, new investment laws aimed at attracting foreign investment were brought into effect.

Vietnam's main investors are Taiwan, Australia, France, Hong Kong, the United States, and Malaysia. In 1989, Vietnam embraced foreign investment by opening up its economy during the worldwide collapse of communism. Since then, the economy has experienced a consistent annual growth rate of 7% to 8% in recent years. Following the lifting of the U.S.'s 19-year trade embargo in February 1994, Vietnam received significant aid and investment.

(49). The Western arrival of investors in Vietnam, including Coca-Cola, AT, and Motorola, resulted in rapid development in the country. As a result, Vietnam's population continued to grow by approximately 1 million every year.

In the 1990s, Vietnam's exports reached around $800 million USD and imports

were almost $1 billion, as reported by the World (157). The oil and gas industry emerged as Vietnam's most lucrative sectors, attracting foreign investors with British Petroleum leading the way in contributing to the country's growing economy. Furthermore, tourism played a crucial role in Vietnam's development as the government actively encouraged it to generate additional foreign currency.

Furthermore, Vietnam has emerged as the third largest rice exporter globally, having successfully exported 1.69 million tons of rice (Moise 49). From the northern border shared with China to the bustling rice mills in the Mekong Delta region, Vietnam is witnessing significant activity. Notably, investors from Hong Kong have received authorization to set up a casino near Haiphong, while Westerners are vying to develop tourist spots along Vietnam's scenic coastline.

Hanoi, formerly recognized for its bicycles and old colonial buildings, has undergone a transformation to motorcycles and contemporary office structures. Likewise, in Ho Chi Minh City (previously Saigon), the April 30 parade commemorating the war's end will occur amidst a backdrop of billboards and construction cranes. This rapid development has driven Vietnam's progress, signifying its imminent emergence as a prominent force in Asia.

The nation's rejuvenation after the Vietnam War showcases a determined effort towards progress, success, and an improved standard of living for all its citizens. This study indicates that the 'Growing Asian Dragons' are rapidly emerging as significant forces due to their impressive advancements. China, including its integration with Hong Kong, has become a focal point in the business community, while Japan has already solidified its position as the leading partner in this field.

Vietnam, the youngest player in the South East Asian market, is already making a significant impact

in both the region and globally. The concept of free trade argues that when each nation focuses on producing what it excels at and engages in trade, it ultimately leads to lower prices, increased output, higher income levels, and enhanced consumption compared to working in isolation.

Meanwhile, on the Western Continent of North America, the monetary system has also been undergoing drastic changes. The North American Free Trade Agreement (NAFTA), which came into effect in January 1994, eliminated taxes on most imported and exported goods across the three countries involved. Ideally, Canada and the United States are part of this agreement.

Both the United States and Mexico had a shared belief in the positive impact of removing trade barriers on their economies, resulting in greater employment opportunities and other benefits. However, contrary to these expectations, NAFTA did not fulfill the governments' envisioned economic improvements. Economists expressed concerns about potential outcomes before its signing, anticipating job losses as a significant issue arising from NAFTA.

The primary concerns about NAFTA in Canada and the United States revolve around low wages in Mexico and potential job relocation. There is a fear that wealthy factory owners will move or expand their operations in Mexico, leading to significant job losses. Additionally, this shift would result in increased exports for Mexico while decreasing exports for Canada and the United States. However, just eight months after implementing the agreement, Canada experienced a 33.2% increase in exports to Mexico and a 31% rise in imports from Mexico compared to normal levels. This suggests that Canada continued exporting more to Mexico than importing from them. It's important to note that initial export levels may have included production

entities and businesses when the agreement first took effect. In such cases, it's likely that these initial export levels would eventually stabilize, resulting in job losses as Canadian businesses moved to Mexico—a pattern also observed in the United States.

In spite of the growth of U.S. exports to Mexico under NAFTA, there has been a notable increase in imports from Mexico according to the numbers from the Administration [Clinton's]. The trade surplus of $1.7 billion in 1993 transformed into a deficit of $15.4 billion by 1995. Alongside job losses across all three countries, NAFTA also resulted in decreased job benefits for workers in Canada and the United States. This contradicts the claim made by corporate group USA*NAFTA prior to NAFTA's implementation that it would improve working conditions through economic growth and an increase in higher-paying jobs with better working environments. However, it is evident that this assertion was proven false.

The implementation of NAFTA has led to an increase in corporate power, resulting in reduced wages and working conditions. This is achieved through tactics like 'whipsaw bargaining,' threatening to shift production to Mexico unless workers agree to concessions. Consequently, workers have experienced a decline in their rights since the introduction of NAFTA. Despite the growth in productivity for many corporations, real wages have remained stagnant, and there has been a rising number of full-time workers living in poverty both in Canada and the U.S. It is unacceptable for any workers, particularly those working full-time, to face poverty. The existence of poverty among the working class should not be tolerated in Canada or any country. Regrettably, this is not the situation in Mexico as NAFTA has pushed the

middle class back into poverty.

NAFTA has had an impact on the environment. Advocates of NAFTA made assurances that the deal would result in more investment in environmental restoration and a decrease in maquiladoras near the U.S.-Mexico border. Nevertheless, numerous communities continue to face issues with limited access to water and sewage facilities. Approximately, only 10 percent of Mexico's 7 million tons of hazardous waste generated annually is properly handled, while the rest is disposed of in secret waste sites or public sewers. Maquiladoras refer to factories owned by foreign companies that transport raw materials to Mexico for assembly.

NAFTA has eliminated import duties for goods back to Canada and the United States, leading to an increase in maquiladoras and subsequent pollution in Mexico. The agreement prioritizes production and exportation over global environmental concerns. Neglecting worker health could potentially result in decreased production levels and could even contribute to continent-wide epidemics. Therefore, a healthy economy depends on the overall health of its people. Now, let's examine the advantages of the North American Free Trade Agreement for the Canadian economy, as well as those of the other two countries.

The creation of new coalitions that span borders and political party lines has been facilitated by NAFTA, which encompasses constituencies as diverse as workers, farmers, environmentalists, consumers, and religious groups. Canada's Bank of Montreal has introduced the first mutual fund that will be marketed in all three countries, specifically targeting companies positioned to benefit from the North American Free Trade Agreement. Companies like Bombardier, which have established facilities in Mexico, are highly eligible for this mutual fund. There has been some improvement in Mexico's economy, as Canadian and U.S. companies

have invested $2.4 billion in Mexico during the first eight months of 1994, accounting for 55% of the country's total foreign direct investment.

Investments from corporations in Canada and the U.S. contribute positively to the Mexican economy both in the short and long-term. In the long-term, these investments result in increased exports, as Canadian and U.S. companies establish plants in Mexico and export goods from there back into their own economies. Additionally, NAFTA's influence creates a "trinational superpower," making Mexico an attractive destination for foreign investors such as Toyota Motor Co.

Canada has constructed a $450 million expansion in Ontario in order to produce Corollas for North America. Other countries desire to invest and establish facilities in North America to access the North American market more easily. This benefits not only Canada, the U.S., and Mexico with reduced trade costs, but also any foreign corporation with a manufacturing plant in North America. Additionally, the establishment of these new facilities in Canada leads to increased job opportunities for Canadian citizens. Another benefit provided by NAFTA is enhanced productivity levels for the Canadian economy.

Canadian corporations with plants in Mexico take advantage of the lower production costs resulting from the lower hourly wages. Previously, Canadian corporations were not as willing to establish factories in Mexico due to the tariffs incurred when crossing the border. In the future, while China, Japan, and Vietnam continue to thrive economically and socially, NAFTA will continue to have negative impacts on the North American continent.

The introduction of NAFTA had negative impacts on the economies of the three North American countries and proved to be ineffective. The United States investing in Asian economies has contributed to

their success as a global economic power. The future of all countries' economies relies on implementing necessary changes to promote self-satisfaction.

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