Case Study : China Losing Its Allure

On the other hand, knowledge of the political and legal environment of China will be fundamental. Information on their laws and regulations, such as foreign trade policies, product standards, tax laws and requirements, trade barriers, labor laws, etc. are extremely important when assessing China as a potential market for our company. Finally, a thorough research on China’s market conditions, such as potential competitors, market trends, market opportunities and threats, potential risks, unique market characteristics, etc. will be necessary to obtained a complete evaluation of the country before entering the market.

Entering an untapped international market can strengthen a business tremendously—but what if the costs outweigh the benefits for the market itself? China has long been an important player on the global stage, but recent advances in manufacturing, natural resources, and energy production have catapulted the expansive country to the forefront of international trade. Currently the world’s fastest growing major economy, China is set to eclipse the United States as the world’s largest economy by 2016. Among various domestic and international plays, one of China’s most fascinating uses of its

Realizing partnering with the China utmost powerful city played an enormous role in GM's success. The Chinese understand the assurance of currency obliges as a powerful lure. China's strategic amelioration method entail inviting foreign investors, segment of profits to foreign businesses, and preserve constricted controls while possessing the currency or revenue to remain within china. Immeasurable industry plants now invented various products in China and circulating through the world. Dunne, R. R., & Dunne, M. (2011) Revenues from trades and its entirety such as: Nike golf clubs, iPhones, and Christmas tree ornaments. Assisting in China’s accumulation foreign exchange fortune. At the physical year end of 2010, the bank in China had over 2,800,000,000,000.00 in foreign reserves. Adjacent to three trillion dollars. In comparison, foreign reserve pass on driving force, Germany 217 billion and the United States holds $135 billion. Although, there were drawbacks in regards to having negative effects after several decades, General Motors decided to relocate the plant to Mexico. Causing high impact on local culture, enormous impact on the United States, thousands of people unemployed and on unemployment. Outsourcing employment and revenue has affected the U.S. stratification results in inequality when resources, opportunities and privileges were revolted based on position in society

The United States is no longer a leader for manufacturing and China is currently in their ‘Industrial Revolution’ economy. Manufacturing jobs have been exported overseas, that has decline in the leverage to unionize labor (Uchitelle, 2018). The auto industry alone has been drastically hit, with the 2009’s “too big to fail” stimulus package to save the industry.

In the few recent years, China has replaced United State to become the world largest economy. This Economic situation has opened an enormous number of opportunities for most industries to expand their operation from domestic market to international market. Shanghai, which is the China’s largest commercial and industrial city, focuses on 6 major industries which are information technology, automobile, large-scale electromechanical equipment, petrochemicals, heavy manufacturing and biopharmaceutical products (http://en.people.cn/200207/20/eng20020720_100055.shtml). With the virtually unlimited well-educated labour resources and the unique international location, Shanghai is

China is the largest market in the world, and probably the hardest business environment. This narrative reflex China’s immense diversity, complexity, and its enormous competitive intensity is unrivalled versus the world.

Our research over the past five years into the battles between multinationals and local Chinese companies reveals that while market dominance by local champions is far from universal, it’s becoming ever more frequent. In industries as different as beer brewing, mobile-phone manufacturing and laundry-detergent production, Chinese companies — often seeming to appear from nowhere — are forcing multinationals to rethink their strategies and their hopes for explosive growth in the China market.

The influence China is having on the United States is extraordinary. As America continues to drastically import and purchase from China, China is purchasing and investing in valuable American assets. Some of these assets include energy, entertainment, food, aviation, minerals, land and other businesses. Although we operate in a global economy, the positive short-term gains by American companies selling to foreign investors may lead to negative long-term consequences. Countries such as China are literally buying tangible assets on American soil. This trend could affect commercial prices, resources, supply and demand. When a foreign company or individual owns rights to assets in the Unites States, American citizens could be subject to their conditions. Americans could be at the mercy of market conditions set forth by an entity to whom we are directly competing with on a global scale. For better or worse, China has great influence on inflation, monetary policy and acquisition within our own borders.

The Chinese government is highly involved in business practices, unlike the American government. Their government plans China’s economy; therefore, it can be difficult for Americans and other foreigners to understand and work with them. Those making major business decisions need to understand Chinese government regulation and involvement in business practices. Chinese law lacks consistency and the their government has the right to change the standards at anytime without notice.

China is one of our biggest labor competitors. The reason many US companies go to China for outsourcing is again, because of their workforce’s willingness to operate at low costs. Michael Zimmerman describes this as a disparity in worker “tolerance”. Where the low wages found in China are “far lower than U.S.

At the heart of these issues is one disturbing fact: China does not play by the rules. China’s market is largely a state controlled participant in the otherwise free markets (Dorn 78). The situation has not gone completely unnoticed, in 2012 President Obama announced the creation of a Trade Enforcement Unit, specifically citing unfair trading practices in China (“Obama Announces”). Despite America’s first-steps toward economic defense, the speed at which American wealth migrates to China continues to increase (U.S. Census Bureau).

The government of china is very keen to encourage foreign investors, because foreign companies are regarded as relatively good corporate

China is at present the biggest auto market on the planet. It is likewise one of the biggest car parts makers and exporters on the planet, with fares, essentially to the United States, constituting around 33% of its production. The Chinese government has given subsidies to automobile parts producing in China, and vital choices by Chinese policymakers and outside organizations have implications for the U.S. also, worldwide global economies. China has seen a general decrease in destitution and a drop in imbalance. China has been under the administration of the Communist Party of China (CPC) for over 60 years, and the initiative has possessed the capacity to force its choices on the nation without experiencing consultations and transactions (Valey, 2012) .

With China emerging as a global power in business within the last decade, knowing about doing business in China has become more important than ever. There are both many advantanges and challenges with doing business in China in this modern era, and understanding both sides of this coin is the key to being successful in China. Some aspects to keep in mind include the cultural barrier, the price of the work force in China compared to the United States, and have the “made in China” brand be accepted back in the United States.

Fock, H K. Y. and Woo. K.S. (1998). The China Market: Strategic Implications of Guanxi. Business Strategy Review, 9(3):