its revolution in . But new economic policies in China and the collapse of the Soviet Union and Soviet-style communism in Eastern Europe brought many countries back into the fold of the world economy. Wages were relatively low in countries like China. Thus they became attractive destinations for investment by foreign MNCs competing to capture world markets.
Have you noticed that most of the TVs, mobile phones, and toys we see in the shops seem to be made in China? This is because of the low-cost structure of the Chinese economy, most importantly its low wages. The relocation of industry to low-wage countries stimulated world trade and capital flows. In the last two decades the world’s economic geography has been transformed as countries such as India, China and Brazil have undergone rapid economic transformation.
New words Exchange rates – They link national currencies for purposes of international trade. There are broadly two kinds of exchange rates: fixed exchange rate and floating exchange rate Fixed exchange rates – When exchange rates are fixed and governments intervene to prevent movements in them Flexible or floating exchange rates – These rates fluctuate depending on demand and supply of currencies in foreign exchange markets, in principle without interference by governments