Question

1. Identify three compelling economic reasons to invest in China. Then identify three compelling reasons not to do so. Recommend a criterion one could use to trade off the opportunities of operating in China versus the risk of doing so.
2. Transformations such as the Comeback happen quite rarely. Their infrequency, however, only amplifies their revolutionary impact on our lives. Identify from the case how your life has changed, or will likely change, given the comeback of emerging economies. For a point of comparison, think about what you have learned through your studies about how the transition from the Agrarian to the Industrial Revolution changed the way people changed their lives.

Answer 1

1) :- three compelling economic reasons to invest into china

In China business see favorable opportunity like

A) market potential:- it has market potential with 1.34 billion citizen.

B) market performance:- rapid development in china show its progress from 1980 to world largest second in 2012.

C) infrastructure:- in his program. China is spending trillion on Housing, office, highway, airport, seaport, waterway, dams, power grid, high- speed train and communication system.

D) resources:- china is highly educated country and they have immense pool of productive and skilled labor.

E) strategic Positioning:- he represents biggest growth opportunity in field of capitalism. Country is experiencing roughly 10 times the acceleration on more than 100 times the scale resulting economic transformation.

Three compelling reason to avoid investment in china

A) China practices state capitalism and government dominate market activities to achieve politics goal so MNEs do business in china find themselves at a disadvantaged.

B) Western film purchase big stack in China but due to government intervation , political problem and legal problem short circuited their plan again and again.SO most of them sold their stack.

C) Political risk effect the country business in this way

• cost some or all the value their investment

•force to accept lower than projected rate of return

• threaten local Activities.

Other problems

Lack of skilled workforce/labour
- Cultural & language differences
- Weak legislative system
- Monopoly
- Discrimination
- Lack of transparency/information

Other IMPLICATIONS:
- Replication strategies won't work, adaptation is key
- Competitive pricing strategy needed (local companies actively competing with foreign firms)
- Not enough to produce in China, but to offer a compelling product must develop R&D and test the product in China
- In China, there is always a person behind a person, a story behind a story, never "what you see is what you get"
- Must question, ask and seek yourself through the layers of socio-cultural complexities
- All business in China is local, and all localities differ from each other.