Economy Part 5: Factory to the World

The dilemma. 
Should we strive for higher economic growth or for protection of our environment? Does wealth really value more than environment?

China, as we all know, is the factory to the world. Almost everything we own is branded with indications 'Made in China' or is it? Despite the many products manufactured in China, there are also stamps like 'Made in Japan' or 'Made in Thailand' and the list goes continuously. So, what makes China stand out from other countries that produce goods too? Is it the weak currency? Is it due to the large land area that China has compared to the rest? 

In this week's CID lesson, we discussed about the various comparative advantages of China through videos that go in depth to discern what are the factors of China's success. Confused i was as a student, the perspective of a businessman was necessary for me to fathom the whole situation. 
Firstly, I would need easy access to manpower to have sufficient number of people who are willing to work in and run my factory for money. High unemployment rate would then be one of the criteria i look out for. Other than that, i would also want the country that i am investing in to have somewhat cheap currency. The aim of building a factory on a foreign piece of land is to be able to produce as many goods as i can within a short period of time to cater to the growing demands of the people all across the world. Thus, when the currency is lower, I can produce large amounts of goods to be shipped into millions of supermarkets but only need to pay cheap utilities bill of electricity, water so on and so forth. The only expensive part of this process of production would be the shipping rate iand maybe the corporate taxes instead of the bills, allowing me to gain more profit and make even more goods. Lastly, I will look out for the access and availability to natural resources. Let's face it, you can't make anything with nothing. You can't plant a tree without soil or a seed. You can't have a easy time running a factory when there is an absence in natural resources. Why would do i want to manufacture my goods at a place where there is scare natural resources and fork out additional money just to acquire them for smooth production of goods? Therefore, it becomes one of the key priorities in the consideration on the best location to build my factory. And with that, as a businessmen, i view a country with questions like 'Are there a large demand of jobs by the people there?', 'Is the currency there able to benefit my factory and I?' and 'What are the types of natural resources I have access to there?' 

These thoughts that i had showed one common understanding. Wealth. Wealth to the country and my company. China indeed, compared to other countries, has more attractive offers. It has one of the largest land space, a good number of population, a decent unemployment rate, provides access to natural resources that will assist in my production of goods, a reasonable corporate tax and the monthly minimum wages per worker is quite low. It is hence no doubt that many pick China over the rest. Financial burden will be greatly reduced, more supply of goods and many space to build infrastructures. Such comparative advantages will attract foreign investors to invest in China over the rest.

However, is it just the pursuit of economic growth that China enjoys from the wide attraction of foreign investors? In life, it is certain that in order to enjoy something, you will need to pay a certain amount of price and China is no exception. As i played the role of a businessman, it got me thinking. There is surely advantages and disadvantages to everything on the world and so, why are there so many factories from big companies like Apple choosing China as their place of production? Is wealth the only thing they pursuit in?

Truly, it is more than meets the eye. Manufacturing products may seem like a easy, harmless process, but in reality, it is not. Many environmental pollution, byproducts of production, will be produced and this has become an issue to many European companies, restricting their mass production of goods. China, on the other hand, has little enforcement on environmental laws and this, no doubt, resulted in an another huge attraction to the European companies. Thus, can you imagine China's effective way of attracting foreign investors is actually bringing more and more harm to themselves? More factories set up by various foreign investors, more cheap goods produced at a faster rate, more carbon dioxide being released as greenhouse gas. Indeed, China has suffered terribly from the consequences she has brought upon herself. On 3 Jan this year, China had to issue the first national 'red alert' for the severe fog, haze and smog. Many northern, eastern and central China had been blanketed in a thick layer of grey haze, reducing visibility to nearly nothing. 

Image source

Therefore, the dilemma. The blind pursuit of higher economic growth? The protection for our environment?

Economics Part 3: Standard of Living

Standard of living. What does it actually mean? Cost of living. What is the difference between these two phrases?

Should you be unable to put it to words, standard of living simply means quality of life and cost of living means the minimum cost needed to survive. These two phrases may seem rather mundane but it holds great significance. 

Firstly, let's talk about the standard of living. To makes things easier and simpler, through discussions held in class, many of us describe Singapore's standard of living as modernised, comfortable and decent. However, what is being used to measure the standard of living of countries in the world? Well, no fret! I have got you covered! With reference to resaerch, from a long list of factors, GDP ,or gross domestic product, access to education and climate are some of the few points that contributes to the quality of life of the people be it living or visiting a country. 

Now, let's talk about cost of living. It is the maintaining of basic level of life like water, food, shelter, clothes and last but not least, transportation. It also means the level of wealth, comfort, material goods and necessities available to a certain group of people in a certain location. Most of us will likely have different opinions towards the cost of living in Singapore's context. Some would say it is expensive, while others say it is affordable. 

Nonetheless, despite the different response from the general people, there is no doubt that there is no such thing as a 'perfect thing'. So, there are possible consequences of a high cost living in Singapore. Firstly, i feel that pollution is brought about by the high cost of living. With a considerable amount of wealth earned by many normal Singaporeans, we are inclined to getting the latest out of everything for the sake of reputation and the sack of keeping up with the advancing world. Thus, we are able to afford more and the same thing happens with our wastage. We throw even more. Therefore, a high cost of living will likely result in an increase in pollution produced by each and every people living in Singapore. Other than pollution, the bills for basic items like water and electricity will also be high. Since we own a good sum of income, we will feel no qualms to the amount of utilities used and so it will not solve the problem of the water scarcities happening around the world. With such problems rising, there will be a need to alter the prices of utilities to instill the mindset of the need to save water and cherish every drop of water we use.