Essay on market development of china

Globalization has, for better or worse, altered the economic arena for every country in the world. For many less developed countries, globalization has leveled the playing field so that their economies can compete with the larger, more developed ones such as the United States and other large western economies. For instance, technical engineers in India and China are now just as qualified as engineers in America, but at half the cost. The once large and prosperous service sector in the United States as well as telemarketing services have largely been sourced to India as a large exodus of American multinational corporations find cheaper workers who deliver comparable quality. This then seems to be the essence of globalization - businesses

It is this that has sparked China’s vulnerability to external shocks. In 2011, China’s exports amassed almost $2 trillion, however in Feb 2012, China recorded a $31.5 billion trade deficit as a result of the European sovereign debt crisis in which China’s main trading partners plunged into recession. China’s severe BOGS decrease is an attempt to control growth and a sustained level of 7.5%. Investment policies are also critical for China to achieve economic growth and development. Foreign Direct Investment (FDI) in China is being sought primarily in the redesign of State Owned Enterprises (SOE’s) and in the development of interior provinces. Between 75-80% of World Bank loans to China in 2008 were directed to the central and western regions, the most economically disadvantaged. This promotes increased wealth within China, leading to higher levels of development due to a more positive Human Development Index (HDI), which currently sits at 0.687, up from 0.677 in 2010. Thus, trade and investment are critical factors in ensuring that China’s growth remains sustained at 7.5% whilst still encouraging increases in development.

The benefits brought by FDI to China are apparent. Economy is influenced by FDI in a number of ways. FDI involves transfer knowledge in the host country, which will create an increase on the existing stock of knowledge through labor training, the transfer of skills, and the transferring of new managerial and organizational experience. Also, it can help local corporations to access to advanced technology by capital accumulation in host countries (Mello, 1999 and Mello, 1997). Furthermore, FDI may allow China to develop in technology and knowledge which are not readily available locally, as a consequent increase productivity growth through the economy (Jose, 2003).

FDI allows the home country to invest into the host country to produce, advertise, and distribute products, in order to upsurge their market share and provides a long-term investment and enhancement. (Moosa, 2002)

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

China's economy is the second largest in the world, and is predicted to eventually pass US's economy. This makes China's market a prime hotspot for companies around the world to target to try to grasp some market share and profits. However, China's unique and heavy emphasis on culture and strong government practices make China's market place a very difficult for foreign firms to enter and do business successfully. One example of a US firm attempting to pry into the Chinese business world is Home Depot, but this firm wasn't able to sustain business in the country. Home Depot failed in its attempt to enter China and it's important to take a deeper look into why this happened. Foreign firms that enter China must first develop a

China is second largest economy in the word. Size of the Chinese economy and future growth potential has attracted the foreign companies to operate and earn profits. Thrust for cost saving and market expansion direct Multinational companies towards China. China has open the door for foreign companies between 1978 and 1990. Mode of entry utilized by multinational firms includes direct export, franchising, joint venture & wholly owned subsidies. The various factors affecting the success of any foreign company in mainland, including but not limited to the time of entry, mode of entry, institutional framework, and culture difference. However, doing business in China is not as easy as doing in developing nations. A lot of companies have burnt their fingers in China operation.

The most important channel through which foreign capital flows into the country is Foreign Direct Investment (FDI). FDI as defined in Dictionary of Economics (Graham Bannock et.al) is “investment in a foreign country through the acquisition of a local company or the establishment there of an operation on a new (Greenfield) site. International Monetary Organization (IMF) and Organization for Economic Cooperation and Development (OECD) define FDI as a category of cross border investment made by a resident in one economy (the direct investor) with the objective of establishing a ‘lasting interest’ in an enterprise (the direct investment enterprise) that is resident in an economy other than that of the direct investor. The motive of the direct

The growth of the Chinese economy, particularly in the past 20 years, has been staggering, today Chinese competitiveness is no longer confined to lower-end production, and labor--intensive, low-value-added goods. Chinese government are focused on helping Chinese companies move up the industrial value chain, and assisting the international expansion of the Chinese companies’ globalization. And have made efforts to build internationally recognizable brands, government encouragement of international expansion is driven by desire to reduce China’s foreign exchange reserves. For example, according to the Chines government’s work plans for 2015, Chinese government will further promote outward direct investment (ODI) activities, for sure the

China is revolutionizing its economic standards to be able to compete head to head with the advanced industrial countries in the world. China’s domestic market growth potential is a topic of concern for many people in business and government all over the world. The rising friction between China and its major trading partners, the United States and the European Union, over China’s currency policy and the safety of China’s exports have caused China to do some intense house cleaning. It is

China is an emerging economy that caters number of market opportunities for foreign investment. Moreover, China has a huge potential for economic growth. It is the world’s most populous country. It shares border with fourteen countries. The rapid expansion of Chinese economy has captivated many countries to invest in this market in order to gain profit and enjoy low tax rates. China’s one of the best-known landmarks is the Great wall, one of the world’s largest manmade structures. China is the second largest energy consumer country and third largest energy provider country in the world where coal is the primary source of energy. As far as the political factors of China are concerned China is not dominated by a single or a two party system, it has a multi -party System under the leadership of CPC (communist party of China). In decision making process of the political, economic, cultural and social affairs the other parties express their concerns regarding the particular polices to be adopted but one who rule in all is CPC whose approval is the main concern. Furthermore, considering the political stability of the country, number of foreign investments has been embedded into the country’s economy making it a country, which carries a low level of risks of investments. Consequently, this immense increase in the investment ties back to the increase in political stability of the country.

Under current relevant laws and regulation, foreign investors have several options to set up their businesses in China. They can establish corporations in the form of EJVs, CJVs or WFOEs under the EJV law, CJV law or WFOE law respectively. In addition, they can set up limited liability companies (“LLC”) under the Company Law as well. Generally, Company Law is focus on regulating domestic enterprises instead

In previous studies of FDI and its effect on output and economic growth, many economists’ researchers have concluded that foreign investment has a positive impact on economic development. There are several studies of FDI “as an engine for growth” in China.Zhang (2006)

In recent years, the investment scales of foreign business are increasing stably. In 2001, the foreign direct investment was 46.8 billion dollars. In 2005, it has arrived at 85.5 billion dollars. At the same time, the form and field has changed diversification. With the China economy high speed developing and enlarging the industry field, the foreign investment will related to communication equipment, computer, bank service, insurance service, etc. so it will also increase for a long time.

It is quite surprising that I found an oriental market in Lincoln. In my imagination, big city like New York, California is more diverse than a small city like Lincoln. As a business student, it also triggers my curiosity on how the business survives in a place, where not many Asians were living. To satisfy my curiosity in the business, I decided to take a trip to explore the oriental market.