You have the opportunity to expand your business to China. What are the advantages and disadvantages of the expansion? Please note the cultural, political, legal, and economic environments in your response.© BrainMass Inc. brainmass.com October 10, 2019, 8:13 am ad1c9bdddf
China is one of the most populated and largest countries in the world. The opportunities for foreign direct investments are growing for companies looking for expansion outside of its home countries. The Chinese economy over the last thirty years has emerged as a global competitive environment, therefore encouraging companies to invest in the market economy. According to Tarun (2012), China is the second largest country after the U.S. and the largest developing country to receive foreign direct investment. The overall reformation of the Chinese economy and their willingness to maintain an open door policy, helped to earn the confidence of foreign investors (Tarun, 2012). According to Chengze (1998), the reason for China's economic growth is because of its successful implementation of the 1978 "reform and open door policy" (p.21). Before the this new reform, the communist party kept China isolated from the industrial environment for thirty years, leaving China no opportunities for growth and economic expansion. The communist government kept China self reliant, limiting trade and investment opportunities (Chengze, 1998). It wasn't until 1978 when the government allowed for the trade barriers to be broken, but the economy, industrial technology, and labor force were far behind the rest of the world (Chengze, 1998).
One approach to overcome this overwhelming lag was to emerge them in the advanced technology of the world, and they did this by appealing to foreign direct investors (Chengze, 1998). By interrelating with businesses around the world, China had to advance its technologies as a means of communication and interactions with other foreign investors. As a result of the increase in popularity for China's new found global business opportunities, investors were drawn to China for more. Currently, over 150 countries and 450 of the top leading companies in the world are investing in China (Tarun, 2012). The question ...
A company that aspires to expand business operations in China has a few strategies to put in place before entering. A company must consider formulating a strategic plan that includes through examination of the prospective country's global business environment. This is done to ensure the business operations overseas are successful. However, the strategic process is ongoing and revisions should be continuous to stay current with the country's regulations and new developments.