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Fdi In China Case Study

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On the other side of coin, firms that chose to make FDI in China have been facing either benefits or challenges or both. China has been considerably successful in attracting FDI since the implementation of economic reform in 1979. Coca-Cola is a good and remarkable example for firms that have FDI in China. Coca-Cola has a presence in over 200 countries worldwide and is acknowledged as the most recognized brand in the world. Coca-Cola had its first bottling manufacture factory established in Beijing in year 1981, it was an impressive FDI and until now, there are 35 bottling companies and 29 manufacture factories for Coca-Cola existing across China, while also having more than 30,000 people working in Coca-Cola, not to mention, 99% of the staffs are locals.
As one of the biggest Multi National Company (MNC), it has faced a close competition with Pepsi-Cola in the unfamiliar and high versatile local market environment when it started its FDI. Internalization theory is used as a conceptual framework to analyze Coca-Cola’s evolving modes of entry into the Chinese market. Internalization theory proposes that in the event of high transaction costs which are caused by market imperfections, it is normally less costly …show more content…

It also means investment in manufacturing and service facilities in a foreign country aiming to engage actively in managing them. It is playing a very crucial role in the economy development of a country. A joint venture being set up by an Australia production company in China would be a good example of an FDI. Recent years, throughout year 2008 to 2014, FDI in china has been increasing simultaneously and this is taken as an advantage for end users while a threat for local producers and firms. Nevertheless, there are a few general factors that happened to make a positive increment for the FDI in

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