Globalization must be carefully managed by policy makers

Globalization will continue to impact high-income countries such as Canada in the years ahead, but the overall negative effects can be mitigated through proper support from and careful management by governments.

That was one key finding in a recent report from the World Bank. The report, Global Economic Prospects 2007: Managing the Next Wave of Globalization, studies how globalization will shape the global economy over the next 25 years.

The report’s central scenario predicts that the global economy could expand from $35 trillion in 2005 to $72 trillion in 2030. The report indicates this expansion represents an average annual increase of approximately 3%-2.5% for high-income countries and 4.2% for developing countries.

“While this outcome represents only a slight acceleration of global growth compared to the past 25 years, it is driven more than ever before by strong performance in developing countries,” says Richard Newfarmer, the report’s lead author and economic advisor in the Trade Department.

“And while exact numbers will undoubtedly turn out to be different, the underlying trends are relatively impervious to all but the most severe or disruptive shocks,” Newfarmer adds.

The report identifies three major features that will characterize the next wave of globalization: the growing economic weight of developing countries in the international economy; the potential for increased productivity that is offered by global production chains; and the accelerated diffusion of technology.

According to the report, continuing integration of markets will make jobs around the world more subject to competitive pressures. “As trade expands and technologies rapidly diffuse to developing countries, unskilled workers around the world-as well as some lower-skilled white collar workers-will face increasing competition across borders,” warns Uri Dadush, director of the World Bank’s Development Prospects Group and International Trade Department.

In fact, the report notes that rapid technological progress, expanding trade in goods, and growing international sourcing of services have all combined to put new pressures on labor markets-pressures that will continue to grow in the next 25 years.

“Particularly challenging is the rise of China, India, and other developing countries as manufacturing powerhouses, and, with growing tradability of services, as suppliers of services to the global market.

“While the qualitative implications of increasing exports of manufactured products from China and India are the same as for the emergence of the Asian tigers more than a decade ago, their sheer size raises the specter of intense export competition,” the report states.

However, the report suggests that there are three factors that will likely mitigate some of these effects in the medium and long term. For one thing, “The growth of the Chinese, Indian, and other emerging markets offers enormous offsetting opportunities for other developing and developed countries to increase exports. As China and India increase their exports, they will have to increase imports of intermediate inputs, energy, technology, and investment goods.”

Secondly, the report says that as exports and domestic living standards rise in these emerging economies, wages and exchange rates rise as well, creating space for low-income countries to move into low-skill activities abandoned by producers in the large emerging countries.

Finally, the report states that developing the social institutions that support a dynamic market economy in China and India will take time, providing an opportunity for smaller, more flexible countries to progress faster in institutional development and for rich countries to continue to lead in productivity-enhancing innovation.

However, according to the World Bank, globalization also offers opportunities. “Globalization offers opportunities for export growth and access to a wider range of cheaper products that can fuel productivity growth and raise average living standards.” Ultimately, it will be the response by individual governments and policy makers that dictates how the pressures of globalization will impact both high-income countries such as Canada as well as low-income countries.

“National policy makers must decide how best to respond to globalization-because the growth and long term competitiveness of their countries are at stake. And international policy makers must devise ways for nations to work together to ensure that growth can continue without becoming destabilizing,” the World Bank warns.

Jerry Cook
Editor, MPP
jcook@clbmedia.ca 

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Haas Automation Asia opens new headquarters in Shanghai

Haas Automation Asia has recently opened the new 72,300 sq. ft. headquarters and showroom shown here in Shanghai.

Haas Automation Inc., Oxnard, CA has announced that Haas Automation Asia has officially opened its new 72,300 sq. ft. China headquarters and showroom in Shanghai.

The opening of the new office comes only three years after Haas first opened its Asian operations in Shanghai’s Waigaoqiao Free Trade Zone.

According to Haas, during the three year period the firm’s business has increased dramatically with the company outgrowing its original location.

As well as providing additional office space, the new building incorporates a 6,700 sq. ft. showroom, allowing some 20 Haas machines to be displayed and demonstrated.

The new facility also comprises a 32,300 sq. ft. warehouse for maintaining a stock of 200 new machines, allowing delivery to almost anywhere in China within five days of receiving an order.

The opening of the new headquarters and showroom marks an important milestone for Haas Automation Asia, says managing director Fischer Mou. “Since establishing Haas Asia, we’ve exceeded our annual sales targets in all of the key China markets. In the past year alone, we’ve experienced a sales increase of more than 30%. “This is in line with the growth Haas has enjoyed in other markets around the world, and reflects the universal appeal of low-cost, high-quality CNC machines,” says Mou.

The new headquarters includes a comprehensive 6,000 sq. ft. spare parts warehouse run by factory-certified support personnel, which will provide same-day dispatch for more than 90% of requisitions, and dispatch 100% of requisitions within 24 hours.

The new facility also includes a modern, fully equipped training area, with three classrooms and a 1,550 sq. ft. Technical Education Center, where Haas personnel will train Haas Factory Outlet (HFO) service engineers and customers from all over the China.

Five Haas Factory Outlets currently are in operation in China, with locations in Shanghai, Guangzhou, Shenyang, Qingdao and Chongqing. An additional seven HFOs are scheduled to open throughout the country by year’s end, further expanding Haas Automation’s customer-support network in China.

“As both our Chinese customer base and our distributor network increase, we intend to offer the best service and support in the industry,” adds Mou. “Our investment in the new office, showroom and parts warehouse will help ensure that we do just that.”

Coming in the March issue of MP&P

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Product Spotlight

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Regular Departments

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This year’s METALFORM’07 show promises to be a showcase of the latest metalforming, fabricating and related technologies.

The show, which is sponsored by the Precision Metalforming Association (PMA), Cleveland, OH, will be held March 25-28 at the Donald E. Stephens Convention Center in Rosemont, IL.

Close to 400 companies are expected to display their products in 100,000 net square feet of floor space at METALFORM’07.

METALFORM’07 is very tightly focused on the metalforming and fabricating industries. A wide range of metalforming technologies will be on display including fabricating, stamping, assembly and tool and die. In addition, the show will highlight value-added technologies such as material handling and packaging.

Some of the equipment on display includes stamping and turret presses; welding and assembly equipment; press brakes; lasers; roll forming and spinning machines; coil handling equipment and feeds; automation; finishing; tool and die; machining; and more. Show times are: Sunday, March 25, noon to 5 p.m.; Monday, March 26, 9 a.m. to 5 p.m.; Tuesday, March 27, 9 a.m. to 5 p.m.; and Wednesday, March 28, 9 a.m. to 2 p.m.

For further information or to register for the show contact the PMA at : (216) 901-8800 or visit www.metalform.com

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