The Between China And India

2140 Words9 Pages
As per definition of Pitelis and Sugden (2000, p.72), Multinationals (MNC’s) are corporations that operate in more than one country. Until recently, multinationals from developed economies had the primary control over the global market. They created opportunities, made acquisitions, made FDI’s in emerging markets. They were also sharing their knowledge and experiences with SME’s in emerging economies. The flows to a great extent were one way, however in the last few years, a considerable two way relationship has developed. The main reasons for the change in the set of circumstance has been due to the emergence of companies from rapidly developing economies, from what SME’s have learned from the knowledge and experience shared by…show more content…
Secondly, the governments of the present have accepted the idea that economic openness and business liberalization is a must for any economy to thrive on the global platform. Thus treaties such as ASEAN, WTO, NAFTA etc have helped break much of the global trade barriers that had previously existed and have subsequently contributed to the formation of a global, interdependent and highly sophisticated “World Economy”. As a result of these treaties, governments have customized their trade policies in accordance to them. One of the most significant events of this phenomenon was the introduction of China into the World Trade Organization (Bransetter, 2008, p.655-659). Lastly, multinationals have also restructured their approach to practicing business. The huge competitive global scenario has forced them to broaden their operations in more emerging economies. Factors such as low cost labour, materials, logistics and capital have propelled them to infiltrate emerging markets. In contrast, most EMM’s have a secured position in their home markets with a strong customer base which has enabled them to go for expansion abroad. The new system of economic organization is multi-polar distinctive of having numerous centres of economic power and activities (Accenture, 2007). The most significant change is the striking inclination of emerging market multinationals (EMMs) whilst the
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