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International Business: Doing Business with China

For many global companies, China represents a very attractive market in terms of size and growth rate. Yet, it ranks lower in terms of economic freedom and higher in political risk than other country markets because it has a communist government. Despite these risks, there are hundreds of companies that have established manufacturing operations in China. This is due in large part to the Chinese government making sales in China contingent on a company's willingness to locate production there. The government wants Chinese companies to learn modern management skills from non-Chinese companies and acquire technology. Some observers believe that when Western companies agree to such conditions, they are bargaining away important industry knowledge in exchange for sales today.

1. Should Boeing and other companies go along with China's terms? Defend and support your answer.

2. Should they risk losing sales by refusing to transfer technology?

Solution Preview

The response addresses the queries posted in 830 words with references.

// The paper deals with the need for compliance to the terms and conditions that the Chinese Government demands for setting up the manufacturing units in the country by the outside companies like Boeing and the risk these companies may be facing by refusing to their terms and conditions.//

Abstract

China is growing at the faster rate due to its attractive market which provides new avenue to the companies conducting their operations. This report helps in understanding whether Boeing and other companies should adopt the operation as per the terms and condition of the Chinese Government. This report also helps in understanding that if the Companies do not agree on technology transfer, will they lose their sales opportunities or not.

Introduction

A lot of global companies see China as a one stop destination for the purpose of enhancing their growth opportunities and adding up to their profit potential. But, the Chinese Government offers some terms and condition for these companies if they want to enter and make profit from their market. The general notion is that the country represents a very attractive market in terms of size and growth rate and therefore, arises the question that should the companies comply with the terms and conditions of the Chinese Government or not and should they risk ...

Solution Summary

The paper deals with the need for compliance to the terms and conditions that the Chinese Government demands for setting up the manufacturing units in the country by the outside companies like Boeing and the risk these companies may be facing by refusing to their terms and conditions. The response addresses the queries posted in 830 words with references.

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