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Global Financial Management (doing business in China)

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Details: Long-term investment projects require a thorough understanding of all attributes of doing business in that country, including import/export restrictions, labor relations, supplier financing, tax rules, depreciation schedules, currency properties and restrictions, and sources of short-term and long-term debt, to name a few. China is currently the focus of investment and market penetration strategies of multinational firms worldwide including Acme. Your supervisor has asked you to gather information on some of these factors that your company or any MNE would want to consider when doing business in China. (This is the primary focus of this assignment.)

As you begin your research, you realize your company would make a significant profit from doing business in China. You also discover that policies on employee welfare, labor relations, etc. are the antithesis of what your CEO firmly believes. Do you include this information in your report, or just provide the strategic information you were asked to gather? (Please respond to this ethics question in a paragraph or two).

Use the Library and other Internet sources (you might start with the web sites listed here), to collect the information.

Extract from Guide to Doing Business in China
China Business Etiquette

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https://brainmass.com/business/international-finance/global-financial-management-doing-business-in-china-225517

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The response addresses the queries posted in 1755 words with references.
//China is currently the focus of investment for all multinational firms. This paper will focus on the important attributes, any multinational firm including Acme should consider while doing business in China. It will also discuss that distinguished policies on employee welfare, labor relations, etc. are to be included in this report or only strategic information needs are to be included. The below part of the paper will provide an introduction about China's economy, which offers several opportunities for multinational firms//.

Introduction

China is currently the center of investment for numerous multinational firms round the world because of its stable environment composition. The huge market of China, its sound and supporting policies and firm infrastructure, is a source of attraction, for investment, by multinational firms. The enormous economic growth and the rapid economic development in China have led to the incessant rise of China's position in the Global market (Saxon, 2006).

Acme, the well known multinational corporation is also considering an opportunity of investment in China for market penetration. The Company perceives significant chances of profitability in the country and an approach towards growth by investing in the country. Thus, a thorough study of all attributes of a long term investment project will be done that Acme should consider in detail while doing business in China (Saxon, 2006).

//This part will focus on the export/import restrictions in the Chin's market for multinational firms which need to be aware of. This part will also explain the labor relations in China and supplier financing prevailing in the country//.

Import/Export Restrictions

China comes under the category of the largest importer as well as an exporter in the world. The import and export trading sector in China has been liberalized, ever since the country joined WTO. For trading privileges, firms need to register themselves, so that they can efficiently conduct foreign trade from and within in the country. Wholly owned foreign enterprises (WOFEs) and individuals do not have permission to engage themselves directly in import activities, but they can bring necessary material and equipment used for production. Thus, standard foreign invested enterprises can import and export with the use of their own name and without the support of any local agent or trade corporation (Saxon, 2006).

Import Quotas and Licensing

Imports in the country are regulated through the licensing system and commodity inspection. The country also maintains a Forbidden Catalogues of Imports (FCI) for the sake of national security. Goods, imported for manufacturing of export items, may exempt from import VAT in the country. The import goods that are under any quantitative restrictions are dependent on quota management and licensing control whereas; the restricted technology imports are under licensing control. For importing technologies classed as free imports, there is a requirement to follow the registration and contract filing formalities. For goods and technologies that are ...

Solution Summary

The response addresses the queries posted in 1755 words with references.

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