Essays on Structural Transformation Book Report/Review

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Macro & Microeconomics Structural Transformation Gary Gereffi’s article “Development Models and Industrial Upgrading in China and Mexico” explores the development strategies that China and Mexico employ in the quest for national development and industrial upgrading. Gereffi presents the dissimilarities and resemblances that exist between the models of structural transformation that the two countries use. While Mexico’s development model focuses on extensive privatization, foreign direct investment, and open markets, China’s development approach is statist and strategic in a way that promotes global value chains and economies of scale. I have learned that structural transformation drives regional job creation and growth, as evidenced in China and Mexico.

In addition, advancements in structural transformation enable a country to provide ideas and opportunities to other countries undergoing development. There are several parts of the transformation process that are applicable in other countries learning the basics of structural transformation. Even so, before integrating structural transformations, it is necessary to address economic and social challenges that may affect a specific country. Factors such as corruption and wage inequalities are detrimental to the appropriate implementation of efficacious development models.

It is obligatory to identify necessary policies that augur well with any intended structural transformation. For instance, policies on foreign direct investment and international trade must interrelate well with structural transformation. China has been prosperous owing to the appropriate political climate that promotes development and growth. In addition, technology is at the forefront of structural transformation, which results in industrial upgrading (Gereffi 46). Owing to the technological advancements, China has advanced its infrastructure, which reduces costs of transportation. In time, the whole process leverages economies of scale, and results in lower labor costs from the available labor market, and an increased growth rate for a country.

Works CitedGereffi, Gary. Development Models and Industrial Upgrading in China and Mexico. European Sociological Review, Volume 25, Number 1, 2009.

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