Archive for January, 2011

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Blog 2: Urgent Action Needed to Avert Global Hunger

January 25, 2011

Due Date: January 25, 2011

Article Sourcehttp://www.bbc.co.uk/news/business-12235625

Article Date: January 24, 2011

Article Title:  Report: Urgent action needed to avert global hunger

Summary:

In a two-year study, it has been found that many countries’ current system will fail if they do not bring up their food production by about 40 percent, water by 30 percent, and energy by 50 percent within the next twenty years. If they do not address these problems food prices and global hunger will continue to rise as it is predicted that in the next 20 years 65-70% of  the possible 8.3 billion people on the globe will be living in cities (therefore they will not be contributing to agriculture). According to experts, it will be necessary to face the reality in the political world so that countries can begin to help address world hunger, such as improving technology and enabling countries to increase food production.

Reflection:

This report/article means that industrialized countries’ trade deficit will increase and become even more reliant on other countries. Businesses who deal with agriculture ought to strategically plan for this and try to help improve food production rates. If they do not look ahead twenty years or so (what this study has planned for) then they will not be able to adjust properly for the supply and demand changes to come. A learning company should be able to adjust what they are doing in order to keep a steady flow of supply (for example, making sure to rotate crops). In addition, they should consider devoting more of there research and development towards this so that they can provide 40% more food by the end of the twenty years.

Other businesses who are not involved with agriculture may be affected because of the possible change in consumer spending habits if we are unable to change our reliance on other countries for food, energy, etc. This means that any company should keep this in consideration when they create strategic plans. Also, companies should understand the gravity of the situation and perhaps devote some of their philanthropic efforts towards making long term changes in agriculture and helping reduce world hunger.

Companies may have the ability to lead the way so that others will start thinking about the many aspects of this issue: global hunger, reliance on others, and the trade deficit increase that may happen.

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Blog 1: China’s Economy grew 10.3% in 2010

January 20, 2011

 

Due Date: January 20, 2011

Article Source: http://www.bbc.co.uk/news/business-12235625

Article Date: January 20, 2011

Article Title: China’s Economy grew 10.3% in 2010

Summary:

China has been taking many efforts to curb inflation and has seen some of the inflation pressure go down from 5.1% to 4.6%. They were able to accomplish this by raising loan interest rates twice in the past four months; in addition the Yuan strengthened .8% versus the dollar. Finally, with these measures and others in place they were able to see a GDP growth rate of 10.3%.

Reflection:

China has become a major source of income for companies as more and more companies outsource their production to China. This increase in GDP and the reduction in inflation should allow companies to produce products in China for better prices and it allows those who sell overseas to not have as much inflation costs. Also, having a slightly stronger Yuan allows basically anyone who trades with China, produces in China, or has stores in China to benefit so they do not lose as much when changing it back into the dollar. There is also a downside to the international business aspects of this. First, with China raising its loan rates it will cause the U.S. to pay even more as most of our debt comes from China. A lot of international business is related to China and therefore it is better for them to grow even if it includes higher loan rates. Another benefit of having lower inflation in China is that it may allow the consumers to be more at ease. This means that there may be fewer strikes against companies and possibly fewer protests or political unrest. All of this means that companies will be able to keep their employees working and not have to deal with the issues that can arise from their plants (ethical, financial, etc). Finally, it is important for companies that the economy is able to rebalance quickly and smoothly so that they are able to keep their factories running and making a profit without having to move to other countries. It is key to this rebalancing act is that there is increases in consumption over and above the total growth rate. This means that companies will have to be thinking about these two items and how their manufacturing, etc will affect them.