How Do Railroads Affect South America

Furthermore, the Chinese government’s proposal on railroads extends to the idea what Storper and Walker calls dynamic location theory. Storper and Walker argue, “Technological change is only partly about the perfection of production processes in existing sectors, and for defined products.” Dynamic location theory allows industrial expansion by gaining more space, inputs, and new markets, and industry creates places for capital investment and suppliers.
Moreover, as Schumpeter was well aware, technological change also means the episodic rise of whole new types of product output, new sectors, and new labor processes. Many of these innovations effectively reduce the aggregate value composition of capital in the economy by introducing new, relatively labor-‐‐intensive activities for social labor” (p67). Similarly, Chinese investment on infrastructure in South America creates the technological change, and it causes new types of product output and new labor processes.
However, there are problems and challenges that might go thorough. Constructing railroads affects negatively on the environment, and labor problems by law in South America. Because foreigners are banned to work in
that area by law, South American people have to involve in creating railroads, and Chinese government cannot bring workers form China. Because many people died from construction railroads in the past, South Americans are exploited by Chinese government for their investment. Brazilian economy cannot stand itself without China’s support at the same time Brazilian economy is affected by the Chinese economy downturn.

As Chinese economy influences on the economy of South America, its power affects the U.S.
economy and creates both advantages and disadvantages in the U.S. In “Chinese money flows into US housing” Diana Olick, the author of CNBC, writes about Chinese buyers in the U.S. Devaluation of Chinese currency caused instability of Chinese economy and led to Chinese buyers to be attracted to spend their money on U.S. markets. Due to money flows into U.S. housing, it caused to accelerate U.S. home price appreciation in the past few years. Chinese buyers who have children rely on real estate agency because they concern a district of houses for their children to get higher education. Most popular places are New York and California, and homebuilders even design for those Chinese buyers in Irvine
California. The phenomenon of Chinese buyers related to John Logan’s and Harvey Molotch’s concept of “the growth machine.” In the City as Growth Machine, they argue the tension between “use value” that people actually use the land for their daily lives and “exchange value” which is obtained by making money off the land. “The growth machine” is for those who benefit from the city as their business. This idea can also relate to Polanyi’s fictitious commodities because the land is became commodities and being sold and for capitalists to make more profits. The Chinese buyers make positive impact on the U.S. economic growth.
Although it is considered that the growth is good, Logan and Molotch find the problems of the growth because it decreases the standard living of local residents such as poor and colored people. Olick writes about the growth of the housing markets in the U.S. because of Chinese buyers. However, the growth causes local people being pushed away from the region where they originally live in. For example, Olick describes that house builders built houses for Chinese buyers in Irvine, California. In this case local people especially poor and colored people are no longer live their places because renting prices gets higher due to the increase in demand. Thus, since Chinese buyers’s priority catches builders’ attention to create preferable neighborhood for Chinese buyers who want their children to get higher education. Therefore, this gentrification causes some particular people pushed away from the area.