Recently, urbanization has become the leitmotif of the Chinese policymakers. Thus, during the meeting between Li Keqiang, Chinese Prime Minister, and Jim Yong Kim, Governor of the World Bank in November 2012, Li Keqiang said that urbanization "represents the greatest potential for growth in the coming years".
For the current Chinese rural residents who eventually become urban residents, this urbanization allows them to get jobs and also increase their salaries as dynamic cities offered a lot of opportunities, especially in construction (Lecture 9). By transferring labor from the countryside to the cities, urbanization will reduce income inequality between rural and urban areas, while supporting economic growth.
For the current Chinese rural residents who remain in the rural area, migrant workers from the countryside to the cities help them thanks to money transfers. Indeed, these migrant workers usually have a very high saving rate and thus transfer money to countryside. Therefore, it contributes to the growth of consumption in rural areas and also increase rural residents’ standard of living.
Finally, for the Chinese economy as a whole, urbanization is considered by Chinese leaders as a way to solve many problems of the Chinese economy. Indeed, urbanization will increase aggregate consumption as urban households tend to have higher wages and thus spend more in private consumption. As a consequence, it will lower Chinese dependence from external demand and then rebalance Chinese economy thanks to a more dynamic internal demand. Urbanization will also reduce the inequalities between rural and urban areas, stimulate non-agricultural sectors (especially service sector) as it is considered as the future deposits for growth and employment, and transfer labor from country to cities.
The weaknesses of the Japanese consumer electronics firms are easily identifiable thanks to a comparison with the GNB Model (Lecture 3) which is now the dominant model for consumer electronics in the world. Based on this comparison, the major weakness of Japanese consumer electronics firms is the specialization on high-end products. Thus, it implies high price. However, the main point for global consumers is not high quality, but a low price as the price is the main factor in the purchase process of electronics goods. This specialization on high end product is the result of two main strategic weaknesses of Japanese consumer electronics firms. The first one is about production. Indeed, as much Japanese firms are integrated in Keiretsu, they tend to work with each other, without necessarily checking for cheaper suppliers in other countries, especially in South-East Asia. As a result, production costs are high compared to firms using the Global GNB model and thus Japanese firms are less competitive in the field of consumer electronics. The second point is about the target of these products. Most of Japanese firms target Japanese consumers. It is really convenient because...