Why did MNCs decide to relocate production to Asian countries? What was its impact on Asian countries?

Wages were relatively low in Asian countries. Thus, they became attractive destinations for investment by foreign MNCs competing to capture world markets. The relocation of industry to low-wage countries stimulated world trade and capital flow.

Impact of MNC’s decision to relocate production in Asian Countries:

1. It provided for cheap labour to MNC’s

2. It stimulated world trade and increased capital inflow in the Asian Countries

3. Brought about new technology and production methods to the Asian Countries.

4. Greater choice of goods and services to the people with greater employment opportunities for Asian countries.

5. Rapid economic transformation resulting in the growth of economies like India, China.