The decision of MNCs to relocate production to Asian countries led to a stimulation of and flows.

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The decision of MNCs to relocate production to Asian countries led to a stimulation of world trade and capital flows. MNCs began shifting production to low-wage Asian nations in the late 1970s. Following the 1949 revolution, China was isolated from the postwar global economy. However, several countries re-entered the global economy after the demise of the Soviet Union, the end of Soviet-style communism in Eastern Europe, and China's new economic policies. The relocation of industries to low-wage countries increased capital flows and global trade. Due to the meagre wages, international MNCs seeking global market share find China and other Asian countries such as India attractive investment destinations. In addition to low wages, China's economy also features a low-cost structure. As a result, China has become a significant producer of commodities such as toys, mobile phones, and televisions.

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