VJC econs 2022 Promo QP and SAMS

2022 Promo QP 160 H2 ECONOMICS – PROMOTIONAL EXAM 2022 QP China’s quest for inclusive economic growth Figure 1: China’s Gross Domestic Product (at current prices) per capita, 2017 - 2021 Source: World Bank, 2022 Extract 1: China's income inequality grows despite village modernisation The Chinese government's push to modernise rural areas of China has improved lives and reduced poverty, but villagers nationwide face an even wider gap in income inequality against their urban counterparts as economic opportunity in the countryside remains sparse. China has an urban population of roughly 900 million while another 500 million live in rural areas. Urbanites earned US$6,321 annually on average in 2020, while rural residents averaged US$2,470, government data shows. China's rural areas have few work options outside agriculture, and t he farming field lacks business growth. Growing crops like grains, oil crops, and cotton yields low returns. Many villagers leave for big cities to be migrant workers, whose average earnings reached about US$577 a month in 2020 – a pay far better than that for farmers. But they remain far behind office workers, such as those working in the finance sector. White-collar employees in Beijing, Shanghai and other cities that host booming industries make US$1,442 to US$4,326 a month, resulting in a clear divide with villagers and migrant workers. Adapted from Nikkei Asia, 13 Jun 2021 Extract 2: Minimum wage hikes sweep China in 'common prosperity' push Chinese provinces have responded to President Xi Jinping's "common prosperity" campaign by hiking minimum wages, but higher labo ur costs could prompt manufacturers to shift production elsewhere. Twenty out of China's 31 provincial -level regions have incre ased their minimum wages so far in 2021. Guangdong Province, China's largest province by economic size, lifted its monthly minimum wages Wednesday to between US$234 and US$340 from between US$203 and US$317. This is likely to benefit migrant workers from rural areas to cities the most. Many overseas companies, including Toyota Motor, Honda Motor and Nissan Motor, operate in Guangdong. Larger offices and factories already pay above minimum wage, so "the increase will

2022 Promo QP 161 have no direct impact at all," as an executive at a Japanese automaker puts it. But the contractors in charge of cleaning or food service for these companies may need to increase wages, possibly leading the contractors to raise rates and indirectly add to the big corporations' costs. This may drive foreign firms away. Labour costs are already higher in China than in many Southeast Asian countries. Nearly one in four European companies in China are considering shifting their investments out of the country. Samsung Electronics shifted smartphone production to Vietnam from China in 2019. Further wage increases could pressure more businesses to follow suit. Adapted from Nikkei Asia, 2 Dec 2021 Extract 3: For China, hosting the Olympics is worth every billion To make an Olympic ski jump, China clad a hillside in steel and blanke ted it with artificial snow. To construct a high-speed rail line linking the venues and Beijing, engineers blasted tunnels through the surrounding mountains. Hosting the Winter Olympics is costing China billions of dollars, a scale of expenditure that has made the event less appealing to many cities around the world in recent years. But China looks at the Games with a different calculus. Beijing has long relied on heavy investments in building railway lines, highways and other infrastructure to provide mil lions of jobs to its citizens and reduce transportation costs. The national government spent US$2 billion building an expressway from northwest Beijing to Yanqing, where Olympic sliding and skiing events are being held, and an additional US$3.6 billion to extend the expressway to the ski resorts. With the 2022 Games, it also hopes to nurture an abiding interest in skiing, curling, ice hockey and other winter sports that could increase consumer spending, particularly in the country’s chilly and economically struggling northeast. China regards the Olympics as transforming Beijing, which gets only a foot of natural snow most winters, into a global destination for winter sports. “The success in opening the Winter Olympics has brought positive economic benefits and created new sources of growth for the local economy,” said the top spokesman for the city of Beijing. Adapted from The New York Times, 15 Feb 2022 Extract 4: China's fake snow frenzy for Beijing Olympics strains water supplies Artificial sn ow has become a Winter Olympics fixture as climate change shrinks the number of countries that get enough natural snowfall to hold the event. But Beijing will be the first host to rely completely on man-made powder. Experts worry that the push to transform Zhangjiakou, the main venue for the Winter Olympics, will worsen the region's severe water scarcity, which ranks among the worst in the country. To reduce the need for groundwater extraction, China has built water t anks to collect rainfall, and pipe water from a reservoir in a nearby town. There's also risk that the fake snow could be harmful to the environment when it melts. Furthermore, water isn't the only environmental concern. Making snow at such a large scale is an energy-intensive process that can at times spew tons of planet-warming gases. This appears to be a low risk, however, since all the snow canons used for the Games are powered by nearby wind farms. The concerns haven’t stopped China from investing heavily in Zhangjiakou's tourism industry since Beijing won its bid for the Winter Olympic Games in 2015. Today it has seven bustling ski resorts and the city receives 3 million skiers annually. The government says the Games are a turning point, with infrastructure investments and jobs related to winter sports lifting more than 430,000 residents out of poverty.

2022 Promo QP 162 Despite promises of prosperity that the ski resorts would bring, some local residents have found only incremental improvements to their daily lives. Mr Chen, a 60 -year-old farmer, says he's glad the resorts hire locals like him during the cold months when they can't farm. But not everyone is happy about the changes. The development has destroyed forests and degraded soil in the area. Mr Ren, 54, was forced to relocate after his village was demolished to make room for luxury hotels. "It's good that we now have places to work," said Mr Ren, who now earns less than he used to as a farmer. "It just pays too little." Adapted from The Straits Times, 22 Jan 2022 Questions (a) Using the information in Extract 1, explain the opportunity cost incurred by villagers when they leave for big cities to be migrant workers. [2] (b) With the aid of diagram(s), explain one possible reason why a farmer in rural China earns less than a white-collar employee in urban China (Extract 1). [3] (c) With the use of a production possibility curve diagram, explain the impact of “companies… shifting their investments out of the country” (Extract 2) on China’s economy. [3] (d) Explain the impact of minimum wage hikes (Extract 2) on China’s workers. [4] (e) Assess the usefulness of Figure 1 in determining the change in living standards of an average Chinese citizen from 2017 to 2021. [8] (f) Discuss whether the Chinese government’s decision to host the 2022 Winter Olympics could be justified. Note: This question contains points that cover Sustainable Growth (Book 8 Section 6) and is not included in the 2023 Promo exam . However, it is still wor th going through the question to understand the question requirements and points covered. [10] [Total: 30]

2022 Promo QP 163 Essay Questions Question 1 In Feb 2022, Abbott laboratories, the larg