Question

Discuss China’s efforts to encourage investment in its underdeveloped areas. What effect will investment have on these areas? How can firms prepare for the unique challenges of operating in these areas?

Answer 1

China is promoting its "go-west" approach to raise funds fro its developed western region that aims to decrease the gap between the developed eastern region and underdeveloped western region.  This plan has great significance to the west region and is very helpful to achieve long-term and sustainable development if the country.

The western china contains around 2/3rd of the territory and contains more than 50% of the resources but is not as prosperous as eastern China. China is trying to develop favorable conditions and make a smooth implementation of the western region development program.

The main strategy to develop the infrastructure of the western region includes the development of transport, hydropower plants, telecommunication, and energy by attracting foreign investment and enhance on ecological protection, promotion of education, and prevention of talent flow to the eastern region.

The investment will cost the economy of the western region and also help to develop basic infrastructure such as transport, hydropower plants, telecommunication, and energy, etc. by attracting foreign funding.

The firm would face many challenges such as geographical challenges, cultural challenges, political challenges, etc while working in these areas. Firms should consider all the factors and [potential risks regarding working in these areas. They should also make a strategy for a particular area in order to cope up with these challenges and become successful in the western China region.