Question

Please discuss the strategies being followed by the western countries and China in pursuit of required resource inputs.

What issues will determine the likely path of commodity prices?

What is the different form of payment China using in some developing countries?

What are the advantages of that method for each party?

Why is China willing to pay substantially more, at times, than the Western firms have in the past?

Answer 1

Solution:

Organizations are facing exciting and dynamic challenges in the 21st century. In the globalized business, companies require strategic thinking and only by evolving good corporate strategies can they become strategically competitive. A sustained or sustainable competitive advantage occurs when firm implements a value – creating strategy of which other companies are unable to duplicate the benefits or find it too costly to initiate. Corporate strategy includes the commitments, decisions and actions required for a firm to achieve strategic competitiveness and earn above average returns.

Over the years, China has shown tremendous growth not only in the field of technology but also in erecting a world class infrastructure for producing and exporting labor-intensive products. India is no longer a third world economy and is now slowly surpassing is successor.

There is a growing trend of large number of numbers of skill intensive jobs being outsourced from developed to developing countries. Despite this, a large numbers of skilled workers are also moving from developing to developed countries often in search for jobs and for education in higher institutions as well.

With the development of Internet and Telecommunications, it is more likely that more developed areas in industrialized countries will ultimately lose some of its manufacturing and service activities and will be in greater competition for jobs with developing countries. There are already a set of developing countries (India and China) that are fast becoming significant exporters of medium and high-technology goods including vehicles, telecommunications equipment, computer parts etc.

The scenario for trade in the current period seems more conducive for controversies where developing countries are in continuous deadlock with their industrialized counterparts. Increased economic integration has led developed countries to form their own group and it has given the same opportunity to the developing nations as well

There is a global industrial shift from the regions of developed countries to the regions of developing countries especially, from the Western part of the world to Eastern part. The reason for such transformation is that ever since the companies started to expand their operations abroad, one of the key factor in their search for the cheapest locations was to seek a low-cost labor-intensive manufacturing process.

With Chinese export companies spreading their operations in the form of FDI into the United States by establishing new affiliates and expanding the old ones, a likely fear that arises is that the U.S. imports from China might decrease.