(i) End of Bretton Woods came with the US dollar no longer commanding confidence in the world’s principal currency. From 1960’s the rising cost of overseas investment weakened the US’s finances and competitive strength. It could not retain its value in relation to gold.It led to the collapse of the system of fixed exchange rates and the introduction of floating exchange rates. (ii) In 1970’s international financial system also changed. Developing countries were now forced to borrow from western commercial banks and private lending institutions instead of international institutions. This led to periodic debt crisis in the developing world,increased poverty in Africa and Latin America.By 1970s MNCs also began to shift production operations to low-wage Asian countries. (iii) China which had been cut off from the post-war world economy, since its revolution in 1949, has now come back into the fold of the world economy. Its new economic policies and the collapse of the Soviet Union has led to it. Low cost structure of the Chinese economy, its low wages, has flooded the world market with Chinese goods. (iv) The relocation of industry to low wage countries has stimulated world trade and capital flows. The world’s economic geography has been transformed as countries such as India,China and Brazil have undergone rapid economic transformation.