Mitch T.

Minglana
BSA – 201

1. Research on the global economy topics:

1.1. Surpluses and Deficits

A surplus describes the amount of an asset or resource that exceeds the portion
that's actively utilized. A surplus can refer to a host of different items, including income,
profits, capital, and goods. A deficit is an amount by which a resource, especially
money, falls short of what is required. A deficit occurs when expenses exceed
revenues, imports exceed exports, or liabilities exceed assets. A deficit is synonymous
with shortfall or loss

1.2. Economic Chains and Networks

An economic chain is a network of interrelated activities of procurement,

production, distribution, sale, and consumption of one or more products, conducted by
coalitions of business entities who act collectively within a coalition. An economic
network is a combination of individuals, groups or countries interacting to benefit the
community as a whole. The primary goal of the group in an economic network is to
strengthen its position in a market.

1.3. Global Value Chains: China and the US

Employment impact of trade is an issue of long debate. Recent literature seems to

focus on partial equilibrium analysis of the jobs destruction in the US due to import
competition from low-cost countries, particularly from China. However, as noted in
World Investment Report 2011 (WIR, 2012), indirect employment generated by trade
can be substantial, in addition to jobs directly generated by trade, to which end a
general equilibrium model is more relevant. By using a recently constructed world input–
output data, it is made possible to account for jobs created along the value chain
process. It is found that China's exports to the US and to the world had created more
job opportunities for its trade partners than any other countries in the world. Finally, in
both countries’ exports the typical value chain products such as electrical and optical
equipment were the most effective creators of jobs for both countries.

1.4. Increasing Competition for Commodities

Demand for commodities has skyrocketed and it is fuelled by both the enormous
demand in developed countries and increased consumption patterns in developing
countries like China and India. However, as what Krauss stated in 2008, ‘Is absolutely a
fundamental change in the global economic structure’. This increase resulted in
commodity price increases, with oil particularly affected.
 1.5. Outsourcing

Outsourcing is the practice of having certain job functions done outside a company
instead of having an in-house department or employee handle them; functions can be
outsourced to either a company or an individual.

2. The students will answer the following:

2.1. Do you think that the Philippines is being harmed as other countries
transfer their activities to us also known as outsourcing?

No. As long as the Republic of the Philippines can handle the business and the
business aligns with where the country wants to go in their economy. It certainly means
an increase in employment and economic growth, both of which the government wants.
Even China should want the Philippines to benefit. If it does, it also helps to stabilize the
region. A strong South East Asia is good for the region, the Philippines should share in
that growth and peace.

2.2. How do you assess globalization in the sphere of production?

Efficient production is the fruit of the best ingenuity a group can apply to a process.
For every product there is at least one optimal process globally. The group responsible
for engineering this process should be rewarded by unencumbered access to the world
economy to sell its product or service. If they are the single most efficient they will have
a market edge but others are not prevented from attempting to develop their own
competitively price products.

The entire globe is an integrated technological machine that thrives both

cooperatively and competitively according to the fundamental economic laws of supply
and demand. Many countries are integral in the production of a single product.

2.3. Does the position of US and China as giants in the economic chain
threaten the status of less developed countries in the global market?

Yes. Less developed countries become suppliers and consumers in the chain.
Unless they have disruptive governments, and then they fall to the sidelines or disrupt
the economic chain. Given good leadership, less developed nations can easily elevate
themselves to the top. But, all too often, their leaders select a disruptive, bring the top
down to our level, approach.