Growing regional inequality in growth and income between the coastal and inland areas have influence the economic and policy issues in China. There are 2 reasons of foreign direct investment having limit spillovers to the inland city In China. Firstly, foreign direct investment and exports may have limited forward and backward relationships because the important proportion of export and foreign direct investment activities are only concentrate in the export processing zones which have little onnections to domestic company. Secondly, foreign direct investment and exports only work as engines of growth for the coastal regions but not for the inland area. China’s foreign direct investment policy has caused to the growing income completely different between coastal and inland city by focusing on specific regions.
In fact, the Chinese population continues to grow steadily and this could change the social and cultural trends. Another important point is the education; in fact China emphasize on the literacy rate that in China was over 90% (huebler.blogspot.ch, 2008). China is known to be a country where the population prefers to receive implicit messages and not to make any idea. For those wishing to open a business in China, the key to success is the relationship with the private relationships with various stakeholders. Another problem in China is corruption.
Individual vignette Many multinational companies seek to enter the Chinese market with the objectives of significant increase in profit and a large expansion of the market share. However it is not all of the powerful corporations that succeed in the Chinese market and there can be many reasons for this outcome. To name a few of the big corporations who have struggled in China we see Mattel, eBay and Home Depot. In the following vignette I will discuss the business situation of Home Depot an why it failed to enter China. The failure of Home depot in the Chinese market In 2006, Home Depot Inc., the world 's largest home improvement chain, entered the Chinese market with 12 stores situated around the big cites of China.
One of the western culture influence China’s culture by foreign direct investment helps the economy grow. The reason investors’ fascinated with the investment opportunities and the development of domestic market has been driving by the foreign direct investment (FDI). According to the Ministry of Commerce he state that China is a country playing vital role in export and import in the Worldwide by increasing 4.9 percent from the previous year to $8.8 billion, in September 2013. Investment from the United States and the European Union carry on rising with an 18 percent and 4 percent barrier, correspondingly, beyond the eight-month period whereas U.S. direct investment computed $2.5 billion in place of August 2013 and EU ranks achieve $5.4 billion. Another point is food and beverage scene and changing diets.
Essay # 2: Tax liability on China business operations of Indians China is set to emerge as the worlds largest manufacturing and exporting country. The nation has displayed resilience in spite of the global economic crisis and their GDP has seen a consistent growth. Since November 2001, China has seen a rapid growth in foreign investment and trade with the country joining the World Trade Organization (WTO). The implications of which include reduced tariffs on certain products and phased introduction in market access to several otherwise regulated industries. The sectors that are now open to foreign trade include advertising services, freight forwarding agency services, inspection services, franchising and trade and distribution.
The high number of fixed- asset investment has triggered the supply and demand pattern labor force. Due to low fertility rate and rising life expectancy, the ratio of elderly Chinese relative to those aged 15-64 is one to two, meaning approximately a third of the population is not capable of working (Banister, Bloom, Rosenberg, “Population Aging and Economic Growth in China”). The limited number of working age population prompted the end of cheap labor in China. In the January-August period of 2014, the amount of money foreign business plow into the Chinese market has fallen almost 2% from 78 billion USD in 2013 (Cendrowski, “Foreign Investments Fall in China). As foreign direct investment is a main driving force in the economy, China’s financial state will debilitate from the withdrawal of foreign direct
China will invest more in high-tech and high value-added technologies, for example in environmental-friendly and energy-saving shipbuilding like those utilizing wind and seawater, maritime equipment projects, and critical internal equipment within ships. In addition, offshore drilling rig industry has been developing as a future alternative to China’s traditional shipbuilding. The ongoing changes, which are all with military implications, are increasing emphasis on hull-block construction, investing in major new “greenfield” shipyards, and increasing Chinese firms’ ability to produce marine diesels and gas turbines. In the meantime, the shipping industry also works effectively on strengthening design and R&D competiveness in volume ship types, for instance, tankers, bulk carriers and container vessels (OECE-WP6
This lead to the decrease in economic growth where there is dropping in number of investors to invest in Malaysia’s market. This is because, the smaller the size market, the lower the demand of product. Investors are usually looking up the market size of the host country to determine whether to invest or not. Notably, a larger market size of a country will be more efficient and in utilizing their resources and exploitation of economic of scale (Charkrabarti, 2001 as cited in Moosa & Cardak, 2006). Traditionally Malaysia has small and medium-sized of businesses that were built around retail sector but the retail sector started to grow in terms of its size and quality service due to the increase in income and the tourisms arrival.
Foreign capital started to flow in the country. Small and medium sized businesses started developing very fast. The existence of the numerous new jobs created the need for a greater variety of specialists, including lawyers and accountants. Basically, after the release of China from the old system, the country created the possibility to achieve the economic interests of a growing