The Domestic Business Environment of China

The attached article discussed the risks and rewards of China going global. Critically analyse China’s international expansion. Also recommend what China can do to generate further economic growth for both its local economy and discuss how this can contribute to the global economic growth.

These effective strategies helped Hong Kong overcome the financial crisis. All these facts fully demonstrated that China is a responsible big country. After the Asia financial crisis, the importance of China's economy has been brought into focus; China's neighboring countries have begun to recognize the influence of the Renminbi.

In 2008, the Global Financial Crisis broke out; both the American economy and the economy in the West suffered a hard blow. However, a big economy system in the East emerged unexpectedly. China is now able to challenge the America’s decades-long dominant position in economic area. Started during the middle of 1990s, China’s manufacturing industry developed rapidly that billions of exports were floating out, and China was given the title of “the world’s factory”(BBC). By the end of 2010, China with a GDP of $5.8 trillion, surpassed Japan’s GDP of $5.48 trillion, became the world’s second largest economy system (BBC). China also exceeded Japan became America’s largest foreign securities holder. Since then, China has been seen as the US’s

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 process of globalisation in China has been a rapid one. China’s exponential growth since the fall of Mao has lead to increased international influence – with China now operating on an international scale.

For example, the economic and trade development between the United States and ASEAN will first boost the economic development of ASEAN. With the continuous strengthening of economic and trade cooperation between China and ASEAN, China's economy will also develop continuously. Chinese enterprises are now actively participating in the process of economic globalization through outward FDI. In these countries that have signed free trade agreements with the United States, Chinese enterprises can make good use of favorable local resources and other factors of production to make investments and continuously upgrade their businesses. Own capital and competitiveness, and improve the position of Chinese enterprises in the world.

Due to the large increase in globalization, many organizations relay on international business for competitive advantages. However, offshoring a business has never been easy especially if there are a lot of cultural, environmental and economical differences. China’s opening up to the world has not only made China’s economy stronger but it has also given many advantages to the outside world as well. Some of those advantages include cheap labor cost, risk sharing, economies of scale and less operational cost but to achieve these advantages it may takes plenty of time to observe new location, cultural training, and understanding of international business. As written in the article, “Red China, Red Tape: How to Start a Business There,” China

Major companies and corporations dislike doing business with suffering countries. At the time, China’s government and economy, have been slowly rising to become the leading nation, but due to this event, their growth was temporarily halted. Many worldwide companies were indecisive to whether or not they should help out their ally by encouraging trade once again which sparked China’s drive towards their capitalistic beginnings.

China is reaching new levels making it a top choice for many global managers. China accounts for more than a third of global growth over the past seven years. (Legarde, 2015) The country has worked hard in creating economic growth and although it has been slow it has been successful. They are gaining on economic and financial stability. As a relocation specialist I would inform the global manager and his family what they can expect when relocating to China.

The main advantage of doing business in China is the fact that China has emerged as one of the world’s strongest economic forces, driven by the shear number of

In addition, China 's politics and economy have great differences with western countries because of the special national conditions, that the political power (or government) may have a prominent or even overwhelming strength relative to the economy (or business), which may have a decisive influence on economic development. First, the government-lead economy has caused excessive pursuit of economic development but neglect the quality of development (Zhou, Zhang & Shen, 2015). Second is the government 's control and allocation of resources and the dominant mode of development of the state-owned economy have caused a series of problems like the loss of economic benefits to a certain extent (Dollar, 1990). So the excessive concentration of political and administrative power caused by the low degree legalization and democratization in Chinese economy may have resulted in some obstacles in the economic development to enterprises, and this kind of rent-seeking which has political power to control economic resources and the right of examination and approval maybe one of the reasons caused China’s corruption and damaged the normal order of the market economy. In western countries, companies could hire a lobby group to lobby government in order to gain some benefits and a lot of countries such as the United States have the Federal Regulation of lobbying act that make constraint on lobbying (Hansen & Mitchell, 2000). But for enterprises in China, to develop good relations (“Guanxi”)

There are different levels of income and consumption in the different areas of China. Dissimilarities in education, consumption, power, personal habits and tastes lead many multinational companies to view China as one nation, but certainly not one national market. While overseas companies focus on the premium market, China's domestic consumer goods companies compete in principal for middle and low income consumers. Also, the new labor law introduced in January 2008 has improved labor protection and wage regulations, but most importantly it has raised China's factory labor cost substantially causing foreign investors in labor intensive, low margin industries to reconsider their Chinese establishments. China made products are also put under scrutiny with respect to quality, hygiene and safety problems. In a global environment, which is driven by trade friction and financial insecurity, these problems may make it even more politically difficult for China to net result a good year.

A common international business discussion in America today, is the assumption of an ominous Chinese power play in business. Americans assume that the combination of industry leverage and sheer number in population gives China a global advantage that they can exploit at will, a card they are sitting on, waiting to play. To help explore this concept, I will focus on China’s tech industry. We will examine some of China’s behemoth corporations in this market segment and compare them to their equivalents in the United States. Chinese corporations are subject to government oversight and many are restricted to the size of their economies due to relationships the government has created with the rest of the global economy. If the oversight and restrictions did not exist, would these corporations dominate the tech industry, or will they dominate regardless?

Following entry to the WTO, the Chinese government increased the level of protection and support it provided to the private sector and SMEs; this has led to many growth opportunities for SMEs, and made the private sector the most dynamic in the Chinese economy. Indeed, WTO membership has helped increase the speed at which the Chinese government has adopted a series of reform measures aimed at changing the country from a highly-centralized planned state to a socialist market economy. This has thus given SMEs an increased role: one that is socio-political as well as economic (Anderson et al. 2003). This has led to increased opportunities due to the large number of national and local newspapers and publishers that are arising from China's growing economy and importance on the world stage. Indeed, news reports, stories and articles about successful Chinese entrepreneurs and SMEs are frequently headline news in many local newspapers (Siu, 2005), which not only encourages further entrepreneurship, but also encourages Chinese citizens to use their local SME, ahead of foreign competitors.