1. The document provides an overview of China's business environment for British expatriate managers of Pasta & Pasta considering expanding into China. 2. It analyzes China's strong economic growth rate and large population as benefits, but also notes social inequality issues and uneven resource distribution across rich urban and poor rural areas. 3. The legal, political, and cultural environments in China are described, including China's emphasis on long-term orientation and group-focused culture as dimensions to consider, according to Hofstede's cultural framework.

1. China’ s Business Environment
Providing an overview of the business environment of China suitable for the orientation of
British expatriate managers…….Table of Contents3 1.0 Introduction3 1.1 China’ s Business
Environment Analysis3 1.2 Business/Market Analysis4 1.3 Legal Environment5 1.4 Political
Environment5 1.5 Social Cultural Environment8 1.6 Conclusion China’ s Business
Environment1.0 IntroductionWith the onset of globalization, it has become imperative for
businesses to seek new markets for commercial transactions and alternative investments.
Companies that have existed within a country or within a certain jurisdiction have had to
deal with market saturation due to entry of new businesses into the already complex UK
business environment. While some companies have been busy merging with their
competitors, other companies have chosen a different route; that of seeking foreign markets
through company expansions (Douglas & Craig, 2011). It is on the second premise that
Pasta & Pasta rely upon. Having conquered the British market, it’ s paramount to try
conquering other markets to expand the international outlook as well as capitalize on the
profits.However, entry into a new market may not seem easy, there are a lot factors to be
considered to guarantee successful entry into a foreign market. This paper is going to look
into the business environment in China so that Pasta & Pasta can make informed choices
before entering the market. In particular, the paper is going to look into the business
environment, legal environment, political environment, the values and norms of the country
as well as considering the Hofstede’ s model of cultural dimension. At the end of the paper
the British expatriate managers would be able to anticipate the type of environment they
are to encounter in China.1.1China’ s Business Environment Analysis1.2 Business/Market
AnalysisChina has posited positive growth rate in the last few years and this has attracted
investors to the country. With a growth rate of 10% every year, the market in China has
proved extremely viable for foreign investment. Pasta & Pasta Company could benefit from
this growth rate and hence expand the company’ s portfolio. The Chinese population is a
factor to consider because they provide ready market for the countries goods and services.
The Chinese market was ranked fourth prior to 2008 and it is expected to grow and topple
Germany from the third spot if the current economy growth persists. It can confidently be
construed that its (China’ s) economy is the most promising market because of its posited
economic growth. However, when investing in China one has to understand the
demographics of the country because there is uneven distribution of resources with the rich
living in urban areas while the poor live in rural areas. This has created social inequality
and hence encouraging political instability. Therefore the company has to look for ways to

2. create better relations with all the customers despite their class (Barbara, 2008).1.3 Legal
EnvironmentIn a bid to attract more foreign investors, the Chinese government has put in
place legislations, regulation, reduction of taxes and principles to encourage healthy
business competition. It has put in place comprehensive labor laws, safety laws, health laws
as well as enactment of copyright legislation to help companies preserve their innovation
while in the Chinese market. The copyright laws are of importance to Pasta & Pasta as they
will help in patenting new flavors it innovates for their products. This will promote fair
business competition. The Chinese government overhauled its old business legislations as
they only served to scare investors and hence failing to promote foreign investment.1.4
Political EnvironmentThe political environment in China is conducive for foreign as well as
local businesses. The country has recently enjoyed political stability which is a great
motivator for direct foreign investment. However, there is still civil unrest especially from
the lower class citizens who have not benefited from the current financial affluence of the
country.1.5 Social Cultural EnvironmentThe Chinese government is communist oriented;
this implies that the Chinese do encourage a free market. The main impediment in the
cultural environment is the unequal distribution of resources. This has created different
classes or social strata, with the margins of poverty between the poor and the rich being
very high. Such a disparity has narrowed the business scope of some businesses as they
have ended up structuring their products to suit the rich/wealthy in the society. Therefore
to have a national outlook Pasta & Pasta should structure their products to fit the whole
society in order to gain acceptance wholly (Gutierrez et al, 2011); this will also help the
company remain viable in the market for longer a period (Marian, 1997).When penetrating
a new market, several cultural dimensions have t o be considered as they make a company
appreciate and understand the values of work places around the globe. According to
Hofstede, there exist five principle cultural dimensions that have to be considered
(Hofstede’ s Cultural Dimension: Understanding Workplace Values around the World,
n.d):a). Power/Distance (PD). It is the degree of inequality prevalent in a society; this
inequality is condoned though by the ruling class as well as the subjects alike. If the PD
score is high it means that the prevalent conditions are tolerated and people conform to
their societal status. The reverse is always true. In the UK, Britain has got a low ranking in
the power distance perspective. The society in the UK and especially the higher class has got
a low PDI as compared to the working class in the same society. The situation however is
different in China with the country experiencing a higher PDI ranking. The society in China
believes that the inequalities between people are tolerable and hence acceptable. The
society tends to think that people should therefore not have ambitions that surpass their
rank. Therefore Pasta and Pasta should consider this when they are expanding to China.b).
Individualism (IDV). It is the potency possessed by individuals in their societal relationship.
The higher the IDV the more loose the connection between individuals and diminutive
sharing responsibility, the opposite is true too. In the UK the IDV is relatively high at almost
90%. It fosters what has been referred to as a ‘ ME’ culture as children are encouraged
from an early age to think on their own and find on their own what their unique attributes
are. This is different when compared to the Chinese environment where people favour a
‘ WE’ culture where people are more committed to a group. China has got a pretty low IDV

3. index at almost 20%. Therefore Pasta and Pasta should consider this too.c). Masculinity
(MAS). It refers to the way a society adheres to the traditional aspect of gender roles.
Societies with high MAS expect the men to be tough and act as the provider for the family.
Societies with low MAS have blurred responsibilities. Roles of both genders are not properly
differentiated. Women are allowed to work at the same rate with the male gender in society.
China has got a high MAS and it is a basically a male dominated society. Chinese work hard
and they sacrifice their leisure and family time and priorities work. the society has got
individuals who have left their families and have migrated to the city to work hard and
support their families. This has been replicated in the education with most Chinese students
putting much emphasis on their studies as they realize this is the only way they can succeed
in life. The UK is also a masculine society and has got the same score margin as China [i.e.
66%].d). Uncertainty/Avoidance Index (UAI). It refers to the anxiety degree of a given
society in different and unknown situations. Societies with UAI try their level best to avoid
situations that are ambiguous in nature. In such a society, the people are governed by rules
and orders. In low UAI societies there are fewer rules and the people are encouraged to
discover ‘ truth’ on their own. China has got a very low score in the UAI. The same can be
said of the UK society which has got the same low score [around 30%].e). Long term
Orientation (LTO). It refers to how society opposes short term values in favor of long term
values. This was Hofstede’ s inclusion after he realized that Asian states that were linked to
the philosophy of Confucian behaved differently as compared to Western cultures. They
tend to avoid losses as it may cause public embarrassment. The UK society scores lowly in
the LTO [25%] compared to a high score of about 118% in China.1.6 ConclusionPasta &
Pasta managers should consider all the requirements posited above for a successful
penetration into the Chinese market. Overlooking the recommendations could prove
disastrous in acquiring the new Chinese market and hence a failure in its
endeavors.ReferencesBarbara, B.J. (2008) Build Customer Relationships That Last, Seeking
and Keeping your Customers. Harvard Business Review-A Harvard Business Review
Paperback, No. 90063Douglas, S. P, Craig S. (2011). Convergency and Divergency:
Developing a Semiglobalmarketing strategy. Journal of international marketing. American
marketing association.Gutierrez S, G.J. et al. (2011) customer satisfaction; hospitality
industry perception. Source: Advances in Competitiveness Research; 2011, Vol. 19 Issue
3/4, p17-31, 15p. Guadalajara (Mexico)Hofstede’ s Cultural Dimension: Understanding
Workplace Values around the World. (Online) Accessed 29th April 2012 Retrieved from
http://www.mindtools.com/pages/article/newLDR_66.htmMarian, B. W. (1997) Clear IMC
goals build strong relationships. Marketing News Press order button now……….