China 's Institutional Environment : China

2077 Words9 Pages
Since the openness policy in1978, China has attracted a magnitude of foreign direct investment from all over the world. Rapid economic growth, large market opportunity, and endless cheap high-quality labor forces have turned China into a utopia of investment. With its evolving economy and enormous array of market opportunities for foreign investment, China’s institutional environment has played a dynamic role in its economic state (Marinov & Marinova, 2012). According to Geringer, Minor, and Mcnett (2014), institutions involves the country’s rules, regulations, and informal codes of behavior that helps administrate the country’s economic position. Institutions influence behavior in several ways whether it’s through laws or regulations, or through norms, values, customs, and ideologies (Geringer et al., 2014). Institutions also define conditions and set limits for maintaining a stable system as they control social relations to maintain conformity. China’s Institutional Environment China’s institutional environment comprises of important factors such as Chinese culture, its governmental system, and non-governmental organizations (Gao, n.d). Conducting business in an international market can bring increased burdens and entail many strategies to overcome obstacles that trading nations may face in international business. In the Chinese culture, Guanxi is a Chinese concept that can be most effective in conducting business successfully in China. China takes much pride in doing
Open Document