The document discusses factors to consider for multinational companies investing in China. It outlines China's encouragement of foreign direct investment and the attributes of its market, currency, and trade environment. The essay also examines political, employment, cultural, and social implications for long-term investment projects in China. Key factors discussed include import/export restrictions, labor laws, currency value manipulation, hierarchy-based business culture, and differences between national and local regulations.
Artykuł podejmuje zagadnienie instytucjonalnych aspektów internacjonalizacji przedsiębiorstw. Autorzy koncentrują uwagę Czytelnika na roli, jaką odgrywają formalne instytucje
w procesach umiędzynarodowienia przedsiębiorstw, w szczególności w zakresie zagranicznych
inwestycji bezpośrednich. Celem artykułu jest prezentacja oraz próba oceny polityki wsparcia
zagranicznych inwestycji bezpośrednich wychodzących z Polski po okresie globalnego kryzysu ekonomicznego 2008. Autorzy najpierw podjęli studia literaturowe w odniesieniu do instytucjonalnych aspektów umiędzynarodowienia, następnie przeprowadzili badania jakościowe
z zastosowaniem metody wywiadu bezpośredniego z reprezentantami instytucji makro- i mezoszczebla (ministerstwo, władze regionalne, organizacje otoczenia biznesu). Wywiady pozwoliły na scharakteryzowanie podmiotowego oraz przestrzennego zorientowania polityki wsparcia zagranicznych inwestycji bezpośrednich wychodzących z Polski oraz na zasygnalizowanie
wyzwań, jakie rysują się przed tą polityką po 2008 roku. Uzyskane rezultaty stanowią punkt
wyjścia do dalszych, bardziej szczegółowych badań w przyszłości.
* Projekt badawczy: No. 11430010 Small Grants Program of the International Visegrad
Fund „Outward FDI policies in Visegrad Countries”.
India Presentation - Business EnvironmentTim Enalls
This is a PowerPoint about India's business environment created for a presentation in an MBA program.
For more content from me, visit the following URLs:
https://analyticsexplained.com
https://www.youtube.com/analyticsexplained
Artykuł podejmuje zagadnienie instytucjonalnych aspektów internacjonalizacji przedsiębiorstw. Autorzy koncentrują uwagę Czytelnika na roli, jaką odgrywają formalne instytucje
w procesach umiędzynarodowienia przedsiębiorstw, w szczególności w zakresie zagranicznych
inwestycji bezpośrednich. Celem artykułu jest prezentacja oraz próba oceny polityki wsparcia
zagranicznych inwestycji bezpośrednich wychodzących z Polski po okresie globalnego kryzysu ekonomicznego 2008. Autorzy najpierw podjęli studia literaturowe w odniesieniu do instytucjonalnych aspektów umiędzynarodowienia, następnie przeprowadzili badania jakościowe
z zastosowaniem metody wywiadu bezpośredniego z reprezentantami instytucji makro- i mezoszczebla (ministerstwo, władze regionalne, organizacje otoczenia biznesu). Wywiady pozwoliły na scharakteryzowanie podmiotowego oraz przestrzennego zorientowania polityki wsparcia zagranicznych inwestycji bezpośrednich wychodzących z Polski oraz na zasygnalizowanie
wyzwań, jakie rysują się przed tą polityką po 2008 roku. Uzyskane rezultaty stanowią punkt
wyjścia do dalszych, bardziej szczegółowych badań w przyszłości.
* Projekt badawczy: No. 11430010 Small Grants Program of the International Visegrad
Fund „Outward FDI policies in Visegrad Countries”.
India Presentation - Business EnvironmentTim Enalls
This is a PowerPoint about India's business environment created for a presentation in an MBA program.
For more content from me, visit the following URLs:
https://analyticsexplained.com
https://www.youtube.com/analyticsexplained
MULTINATIONAL CORPORATIONS #2 - Role, Benefits, Advantages & DisadvantagesSundar B N
This PPT includes MULTINATIONAL CORPORATIONS #2 which covers
Benefits to Host Country
Benefits to Home Country
Disadvantages to HOST country
Disadvantages to Home country
Criticism to MNC
As one of the world’s largest economies, China holds the promise of huge market potential and revenue opportunities for businesses worldwide. However, detailed planning is
critical for success in China.
Does Macroeconomic factors Impact on Foreign Direct Investment in emerging ec...AI Publications
Foreign direct investment is essential for economic growth of a country. It acts as a promoter for the economic development of a country. Keeping this in mind, the objective of this study is to determine the effect of macroeconomic variables such as interest rate, real exchange rate,inflation rate and stock market on foreign direct investment in Pakistan. For this purpose,study used the authentic annual data for the period of 27 years i.e. from 1990-2016. We are use for analysis E-View software, The empirical analysis involved using the ADF test to check the stationary of the data.Results revealed that interest rate and exchange rate have significant negative effect on FDI and stock market index has negative and unsignificant effect on FDI while inflation rate has positive and significant effect on FDI.
This article aims to show how 3 countries in Asia (Japan, South Korea and China) have promoted their development and thus to demonstrate the absurd neoliberal economic policy of Michel Temer government in Brazil that seeks to limit public spending over the next 20 years to create the economic environment necessary for attracting private investors and, consequently, boost economic and social development of Brazil. In practice, Temer government believes that private market forces are more capable than the developmental role that his government could make to boost the Brazilian economy. The economic policy of the Temer government is diametrically opposed to those adopted by Japan, South Korea and China that have in the state key role in the development of these countries in the second half of the 20th century.
Fostering Competitiveness of the Philippines to attract Foreign Direct Invest...Roby Camagong
This business report provides fact-based insights and analysis to help the Philippine government (Department of Trade and Industry and Philippine Central Bank) make the right decisions and trade-offs in making their economy more competitive to attract foreign direct investments from the US.
Foreign Direct Invectments in Developing countriesMunashe Kamwemba
the presentation is focusing of developing countries and the impact of Direct Foreign investments as well as factors that influence and promote investment in the area .
MULTINATIONAL CORPORATIONS #2 - Role, Benefits, Advantages & DisadvantagesSundar B N
This PPT includes MULTINATIONAL CORPORATIONS #2 which covers
Benefits to Host Country
Benefits to Home Country
Disadvantages to HOST country
Disadvantages to Home country
Criticism to MNC
As one of the world’s largest economies, China holds the promise of huge market potential and revenue opportunities for businesses worldwide. However, detailed planning is
critical for success in China.
Does Macroeconomic factors Impact on Foreign Direct Investment in emerging ec...AI Publications
Foreign direct investment is essential for economic growth of a country. It acts as a promoter for the economic development of a country. Keeping this in mind, the objective of this study is to determine the effect of macroeconomic variables such as interest rate, real exchange rate,inflation rate and stock market on foreign direct investment in Pakistan. For this purpose,study used the authentic annual data for the period of 27 years i.e. from 1990-2016. We are use for analysis E-View software, The empirical analysis involved using the ADF test to check the stationary of the data.Results revealed that interest rate and exchange rate have significant negative effect on FDI and stock market index has negative and unsignificant effect on FDI while inflation rate has positive and significant effect on FDI.
This article aims to show how 3 countries in Asia (Japan, South Korea and China) have promoted their development and thus to demonstrate the absurd neoliberal economic policy of Michel Temer government in Brazil that seeks to limit public spending over the next 20 years to create the economic environment necessary for attracting private investors and, consequently, boost economic and social development of Brazil. In practice, Temer government believes that private market forces are more capable than the developmental role that his government could make to boost the Brazilian economy. The economic policy of the Temer government is diametrically opposed to those adopted by Japan, South Korea and China that have in the state key role in the development of these countries in the second half of the 20th century.
Fostering Competitiveness of the Philippines to attract Foreign Direct Invest...Roby Camagong
This business report provides fact-based insights and analysis to help the Philippine government (Department of Trade and Industry and Philippine Central Bank) make the right decisions and trade-offs in making their economy more competitive to attract foreign direct investments from the US.
Foreign Direct Invectments in Developing countriesMunashe Kamwemba
the presentation is focusing of developing countries and the impact of Direct Foreign investments as well as factors that influence and promote investment in the area .
This is our second DIY chicken coop. There are vast improvements with this coop, compared with our first.
1) The sloped, nesting box (big one)
2) The taller coop that allows us to walk in to maintain the coop
3) covered lower walls to keep dirt/manure that chickens kick around in side the coop
4) more sunlight
The power of observation: 5 ways to ensure teacher evaluations lead to teache...Learning Forward
The teacher’s ability to assess student learning, analyze outcomes, and adapt instruction to meet student needs may not always show up on a state standardized exam. However, principals who pay attention to a range of measures of teacher effectiveness can provide more meaningful teacher evaluations that promote teacher growth. Discover several areas in which principals can concentrate to ensure growth-oriented evaluations.
1Running head INTERNATIONAL BUSINESS PRACTICESMGM3552.docxeugeniadean34240
1
Running head: INTERNATIONAL BUSINESS PRACTICES
MGM355 2
MGM355-1403B-02
International Business Practices
Roderick D. Goodrum
Individual Project Phase 5
Colorado Technical University
Instructor: Lester Willis
09/17/2014
Introduction
Establishment of a business in a foreign land depends on strict evaluation and analysis of various factors inclusive of; the barriers to entry in the foreign nation, the legal systems, customer base, potentiality of growth, economic performance, and the cultural framework of the natives there. Failure to scrutinize such factors might impact success of the business negatively (Schill, 2014). This paper discusses the factors that a regional bank needs to consider before expanding into a foreign nation, China for this case. It uses Union Bancshares (UNB), a Californian based regional bank as an example.
Possible challenges in the new environment
This may be analyzed in three perspectives; educational discrepancies, cultural differences, and other social demographics. Culture refers to the values and norms held by members of a given society; the good and the bad defined by a society. Cultural conflict is felt a great depth in the work place, if the workers therein are from different ethnic origins. For UNB to ensure it gains a positive reputation in the public sector, the company’s management will need to employ workers from diverse cultural setups. Despite this move being positive in some way, the conflicts arising in the work place due to differing cultural expectations might hamper work progress negatively leading to poor performance. Another challenge is education level of potential employees within the locality within which the company plans to establish itself. Specific technical personnel might be inadequate in China compelling UNB’s management to outsource workers from far geographical locations, this is a costly process.
Legal and political environments
The legal systems in China are flexible rather than static. This poses a great challenge to foreign investors since laws regarding foreign investors might change negatively at the time of their investment. In People’s Republic of China, laws governing the business sector are made in the National People’s Congress (NPC) and the judicial system is vested with the power of ensuring all parties comply. When making a foreign direct investment, the first step is to describe in detail the pros and cons of the business to China’s economy, if the pros exceed the cons then the business is listed under the permitted category as long as all other factors have been fully satisfied. China is a politically stable nation despite its long term poor relation with Taiwan. This is a positive indicator for UNB since business operations are not likely to be disrupted due to political clash.
Government involvement in the private sector
A comparison to the US business practice is made to gauge the level with which the government intervenes in private businesses in Peop.
UHY Dawgen Chartered Accountants (Incorporating Paul Goldson & Company) is a professional service firm providing audit, accounting, tax and business advisory services from 5 strategic locations in Jamaica. . UHY Dawgen Chartered Accountants (the “Firm”) is a member of Urbach Hacker Young International Limited, a UK company, and forms part of the international UHY network of legally independent accounting and consulting firms. UHY is the brand name for the UHY international network.
Joint Ventures in China: Features and main issues of one of the most common and risky foreign investment vehicles in China. If the initial reasons for foreign investors to venture with a Chinese partner were basically the compulsoriness of the law, “tempting” low labor and production costs, tax incentives and friendly tax policies, and the “mirage” of a boundless market, it is important to understand, nowadays, that these reasons are disappearing and foreign enterprises have more safe alternatives, if a joint venture is still a useful and profitable vehicle to operate in China.
Foreign Direct Investment. Political Economic Digest Series - XVIAkash Shrestha
In this issue, we will be discussing about Foreign Direct Investment (FDI).
Foreign Direct Investment has been a very productive tool for the economic growth of many countries. Recently after the government made the decision to celebrate 2012/13 as investment year and after the agreement with India i.e. Bilateral Investment Promotion and Protection Agreement, the topic of Foreign Direct Investment has been highly discussed among the lawmakers, policymakers and general public. The examples provided in this issue of different countries regarding FDI has shown how the growth rate is positively affected by the investment from outside the country.
In the sixth of a series of reports, commissioned by HSBC, we look at China’s overseas direct investment (ODI) into developed markets and how cooperation between Chinese companies and their developed-market partners is evolving.
This paper uncovers key insights on potential collaboration between Chinese companies and businesses from the developed world. I
A Theoretical Framework (Modelling) for International Business ManagementYasmin AbdelAziz
The international framework with all the institutions and organisations
that determine country’s economic and support policy in emergent situations.
2. Impact of globalisation on international and national policy and activities. 3. The
national framework, which fairly complicated because there are many active players:
a) National economic policy: understanding it and the environment for trade
activities. b) National economic structure and competiveness of the domestic
companies. c) International management capacities. d) Local or regional environment
and conditions for the companies. e) Focus on the world market conditions and their
development
Comparison beween Multinational Financial Management and Domestic Financial Management?
Discuss evolution and International Financial Management System?
Write Special features of foreign exchange?
Describe the country risk Analysis in International Business?
Short notes on:
(i) Franchise system
(ii) Short term assets and liabilities
(iii) Foreign direct investment
1. Unit 4 IP: Managing Multinational Operations 1
Deveye Hademeon
American Intercontinental University
Unit 4 Individual Project
FIN630-1203A-05: Global Financial Management
Project Type: Unit 1 Individual Project
July 1, 2012
2. Unit 4 IP: Managing Multinational Operations 2
Abstract
Global expansion has become a core business strategy for companies around the world in the
necessity to increase their operation fields and maximize their revenue. Over the last decade,
essentially between 2000 and 2010, the number of corporation that expanded their business
across their national borders is considerable. Although this business practice carries some risks
and disadvantages, it’s necessary to mention that the list of companies trying to go global or at
least operate internationally is so long. For that reason the concept of global expansion as a form
of business investment has become an object of study to promote its understanding and the
knowledge of the factors associated.
3. Unit 4 IP: Managing Multinational Operations 3
Among factors that contribute to a particular country’s economic growth need to be
counted foreign investments. In fact countries are interested in making it easier through policies
and regulations arrangements for multinational companies to make investments in their
economies. Nevertheless, it is very important to acknowledge the fact that multinationals are also
interested in investing in foreign countries to growth their own revenues and market shares. Over
the last decade one of the countries that have interested American and Europeans firms for
foreign investment is China with its large market. In a brief description, the purpose of this essay
will consist in presenting the Chinese market with the attracting advantages it offers. That brief
description will be followed by the factors that need to be understood and be taken into
consideration when a firm is interested in starting long-term investment projects in China.
Among others, those factors that will be exposed count import/export restrictions, labor relations,
supplier financing, tax rules, depreciation schedules, currency properties and restrictions, and
sources of short-term and long-term debt.
It becomes evidence that no one can talk about the global economy without referring to
China. Actually known as the People’s Republic of China, that country is part of the East Asia,
covering over 9.5 million kilometers squares with a population of over 1.3 billion people. Being
the world’s most populous country, China serves as a large market, reason why it attracts many
multinational companies in term of business investment. After its adhesion to the World Trade
Organization in 2002, China opened a free trade area in the Asian market and became a “heaven”
of international investments. Nevertheless, it’s necessary to have some knowledge of the country
as a market as well as of the factors that govern it.
The first attribute of the Chinese market is the “disposition of China in encouraging
foreign direct investment (FDI).” FDI consists of capital investment made by a multinational
4. Unit 4 IP: Managing Multinational Operations 4
company in another country, an investment that gives that company a measure of control over its
operations In the host country. According to Eun and Resnick (2009) that type of investment
“…involves the establishment of new production facilities in foreign countries, to include the
merger and the acquisitions of existing foreign businesses.” In fact, since its adhesion to the
World Trade Organization, “China has remained a primary recipient of the world’s destination of
FDI in recent years, where FDI accounts for 27% of the value added production, 4.1% of
national tax revenue, and 58% of foreign trade” (Fogel, 2010) for companies in different
countries throughout the world to include the United States, the European Union; even Asian
countries invest in China by outsourcing part of their business productions. The motive is that
China have developed a FDI management plan in 2006, instructing the Chinese Government to
gradually relax restrictions on foreign holding of domestic enterprises in the necessity to
motivate foreign investors in directing their capital towards high-tech industries, modern service
industries, high-end manufacturing, infrastructure development, and ecological or environmental
protection, and to set up production, assembly, and training institution within the territory.
The other attribute is the local currency and its exchange rate. The Chinese currency, the
Yuan has dominated trade transactions in China even in cross-border trades where that currency
is rivaling the U.S. dollar as Chinese officials are interested in seeing their currency play a bigger
role in cross-border investments. The Yuan is impacting foreign investment because it has been
manipulated and continues to be manipulated by the local officials to be held at a lower level in
the exchange market. In fact, after its appreciation of 21 percent against the U.S. dollar at the
beginning of the third quarter in 2008, the Yuan went flat as desired by the country’s authorities
in the necessity to encourage exports. A depreciated Yuan had and continues to have a big
impact on the world economy, reason why President Obama and his administration urges
5. Unit 4 IP: Managing Multinational Operations 5
continually China to reconsider the value of its currency and to make every effort to have the
Yuan appreciated for as mentioned by the U.S. Treasury Secretary, “the appreciation of the Yuan
could be a win-win situation for the world’s economy.” (Fogel, 2010) Nevertheless, a
depreciated Yuan will advantage foreign companies investing in China when it comes to convert
their capital assets into their own currencies.
Trade also needs to be considered as a factor impacting foreign investment in China. The
exchange of goods and services in the Chinese market is made in form of import and export
through cross-border trades based on various trade agreements existing between the country and
its economic partners that include the U.S., the E.U., Japan, countries of East Asia, and countries
in Africa that become an open market for products manufactured in China.
Political implications need to be considered as well due to the fact that China has in place
policies and regulations that might lead to the naturalization of industries operating on its
territory. This situation forces many multinational companies to operate in the Chinese market
through mergers with local companies, fostering its business policies that can lead and in fact
had led in the past to the risks of confiscation, expropriation, currency inconvertibility and
contract repudiation. It’s necessary to consider also the constant battle between the central
government and the provincial and local governments over applicable laws, whether they need to
be observed or not, making it difficult for companies operating in China to know exactly what
the business rules are (Chang, 2009).
Employment in China is another picture to look at when expecting to invest in business in
that country. In 2008, the Chinese federal government had adopted a new labor to protect
employees from being abused by their employers. Before then, the employment law in China
6. Unit 4 IP: Managing Multinational Operations 6
was liberal, giving companies the opportunity to abuse their employees, to discriminate against
them based on some social factors such as sex (situation that was preventing women workers to
be treated equally to their men coworkers). China’s tendency to “…shift toward capitalism and
to promote its economic growth had attracted the world attention toward labor laws and
regulations in that country, forcing the government to trig the new labor laws that are strictly
enforces in its business environment today.” (Villa da Costa, 2009) The new provision requires
that job offerings be done on contracts that should not be signed by anyone under age of 18 (this
to suppress minor employment that was going on decades ago); “the contract must include
details such as job description, working hours, and compensation, and it must be created during
the first month of employment, to adopt more transparent principles in support of positive
employer-worker relations.” (Villa da Costa, 2009). Employees are required to be insured, and
the insurance of employee injury specially is reserved to the country’s institutions, and should
not, in any case, be provided by private insurers like it’s in the United States. Thus, in case it
happens, injury to employees where there is a lack of insurance can lead to criminal prosecution
against the employer.
Cultural values and social behaviors also play an important role in the Chinese business
environment as factors contributing to business emancipation in China. The main attribute is that
“the Chinese culture and society are defined as collectivist in that the most important values
include the importance of the family, the hierarchical structure of social life, the cultivation of
morality and self-restraint, and the emphasis on hard work and achievement to contribute to a
social development.” (Fogel, 2010) In other term, the Chinese society values family and social
unit over individual expectations. Indications of social and cultural factors in China show high
“power distance” ranking, sign of high level of inequality of power and wealth within the
7. Unit 4 IP: Managing Multinational Operations 7
society, a high “long-term orientation” as Chinese like willingly to overcome obstacles with time
and strength, a low “individualism” ranking due to the existence and predominance of
communist rules to foster a collectivist society where everyone takes responsibility for fellow
members of their group based on loyalty and strong social relationship. These indications
determine Chinese’s attitude in seeing foreigners as representing their company rather than
themselves. Rank is thus very important and one thing to keep in mind during business
interactions is rank differences and hierarchy, although the preference of face-to-face meetings
predominates over writing and telephone communication. Also, it is important to see and take
into account the demarcation between social and business relations; intertwining the two can
cause drastic failure in business process in China.
Conclusion
The different attributes that govern a long-term investment in China are regrouped in
three categories. There are thus economic implications, political implications, and socio-cultural
implications. For Acme considering making a long-term investment in a country like China, it’s
necessary to take into account each of these implications to determine in which way they will
advantage or alienate the company’s investments. These factors enumerated here are just few
among others, and a thorough market research might require sending a representative on the
ground to experiment the way the business life is ruled in China. Business benchmarking is also
a good suggestion, as it will help in learning about the way these factors have in one or other way
help other companies during their business expansion into the Chinese market.
8. Unit 4 IP: Managing Multinational Operations 8
References
Chang, G. g. (2009). China Political Risk Management. Retrieved June 29, 2012 from
http://www.chinariskmanagement.com/Political.html
Eun, C. S. & Resnick, B. G. (2009). International Financial management (5th Ed.). McGraw-
Hill Company, Inc., New York, NY.
Fogel, G. K. (2010). Business Environment in China: Economic, Political, and Cultural Factors.
Retrieved on June 28, 2012 from the EBSCOhost Database.
Villa da Costa, M. (2009). Employment laws in China. Retrieved on June 30, 2012 from
http://www.internationalhrforum.com/2009/05/04/employment-laws-in-china/