China’s large population and untapped market potential has made it an ideal paradise for investors and multinational corporations to invest into by trying to break into the market in different ways, mostly through joint ventures or research and development centers. Now, China has become the largest foreign direct investor for the past ten years as encouraged by the Chinese government. China has expanded into other markets, most notably in Sudan in which China has built oil refineries while helping to indirectly start an economic boom in the politically unstable country for which China has been called out for. Nonetheless, China has allowed more of its domestic companies to acquire other companies. China’s state food and exports enterprise China National Cereals, Oils and Foodstuffs Corporation (COFCO), the largest grain, edible oil and food conglomerate, has recently bought 4.9% of the stakes in the American food corporation Smithfield Foods, Inc. in 2008 and more recently acquired Maverick Foods Co. Ltd, a joint venture between the American Smithfield Foods, Inc. and the Belgian Artel Group. Stemming from its own economic growth and trajectory as well as from the changing international economic climate, COFCO’s buying of stakes in Smithfield and acquiring Smithfield’s joint venture Maverick Foods shows China’s rising status as a growing economic power with its own capital and resources. China’s acquisition of a significant foods company and its joint venture with the Artal Group starts back to the beginnings of the global economic crisis and the worldwide food shortage. As European and American assets decreased significantly, the Chinese renminbi has been greatly appreciated against the American dollar. Throughout its economi... ... middle of paper ... ...ro-market.com/Info/Macro_News_Info_156.html Introduction. (n.d.). Maverick. Retrieved April 5, 2010, from http://maverickfood.com/aboutus_en.asp?id=1 Outbound Agri-Investment Lures China’s Enterprises. Food crisis and the global land grab | Governments and corporations are buying up farmland in other countries to grow their own food – or simply to make money. Retrieved April 5, 2010, from http://farmlandgrab.org/2337 Smithfield Foods Announces the Sale of 4.95 Percent of Shares to China's Largest National Agricultural Trading and Processing Company COFCO Limited - Examiner.com. (n.d.). Burlington Vermont News, Restaurants, more by Top Local Experts. Retrieved April 5, 2010, from http://www.examiner.com/p-189836~Smithfield_Foods_Announces_the_Sale_of_4_95_Percent_of_Shares_to_China_s_Largest_National_Agricultural_Trading_and_Processing_Company_COFCO_Limited.html
I believe that one of the best investments I could make would be an FPI (foreign portfolio investment) into state-owned industries in China. Announced on April 23rd, the government has opened 8 state-controlled industries to investment. I’d recommend FPI (as opposed to FDI) in this venture because, while China is opening these industries up, they are not opening them up for control. Still, companies like Sinopec Ltd., a large oil company, are up to selling about 30% of the SBU that controls its filling stations, a unit valued at over $20 billion. As the middle class continues to grow and be able to purchase more items (like cars), the huge population’s demand for necessary products like these will continue to grow. Companies like Sinopec are adamant that they will not give up any control, and that’s why FPI would be preferable to FDI when it comes to these industries. Another significant reason that I’d prefer FPI over FDI in China is due to risk (political, socioeconomic, etc.) These companies say the reason they won’t lose control is because they don’t want to have to change their operational practices. With FPI, these companies won’t get paranoid that investors are trying to change them. The previous reasons are very specific, but China has general policies, procedures, and trends in place (good or bad) that make it plain for investors to see that they are wanted, and business is a priority. China has an autocratic government, which is very efficient in getting things done, so it is more conducive for companies to work in. China also has very low wage costs ($1.74 per hour). Also, China has some of the least progressive environmental regulations laws, which lowers costs. China’s GDP growth rate is still at 7.5% (14th in the wor...
Canada’s food system has increasingly changed due to the developing global economy. The rise in technological innovation and an increase in trade has affected Canadian’s choice of food products, ultimately affecting Canadian’s economy. The transnational corporations fail to admit where our food is actually coming from and where it is grown. These global corporations create new forms of production that replace local extraction of food for global production, resulting in higher profits. Purchasing food that was produced in other countries reduces the financial support for Canadians farmers, affecting Canada’s economy.
China’s trade with the world grew substantially in the first three decades of the 20th century, marking a historic time for the country. In the 1840s, the Chinese economy was strongly closed; however, when Great Britain and other powerful countries pressured their economy, China was willing to open international trade within their own economy. Over the next 60 years, China experienced a small opening of trade amongst other foreign powers, allowing transactions amongst foreigners allowed. The funded railroad aroused industrialization, as well as publicity and overseas shipping (Yan, 2014). The main reason for moderation in China is because they are so much more focused on production rather than consumption. Last year, China’s consumption accounted for 35 percent of their economy; a little over 10 years ago, it was rated that 50 percent accounted for their overall consumption (Reich, 2010). Foreign exports and imports arose dramatically, increasing the yearly expansion rate of trade to about 7.4 percent. The Chinese economies share in world trade grew a little under 2 percent from the late 1800s to the mid 1900s. By the early 20th century, comparative advantage was presented all throughout their economy (Yan, 2014).
Irony of this commercial tie between two countries is that despite of such important and huge bilateral commercial and economic relation this tie has been becoming complex and shadowed by tension because of several reasons. From U.S. perspective, many trade related issue appear because of a highly closed nature of the Chinese market. Although China has over a period of time has liberalized and opened up its econ...
Being one of the most robust emerging markets, China has attracted investments all over the world for decades since the beginning of its open and reform policy (Melewar, T.C., et al., 2004). After China was accepted by WTO (world trade organization) in 2001(Leïla, 2009), more and more foreign brands have been introduced into Chinese market, among which British brands are no exceptions. These brands of different categories are experiencing the fierce competitions in China, some of them are expanding business quite smoothly while many others are struggling grabbing the market share they have achieved, some losers have to quit the game in the end. Here are some typical brands running not bad in China:
With the development of China, the economy of China has become the World’s second largest after the US. On the other hand, the ...
The people Republic of China is one of the world’s most rapidly growing and developing economies. The introduction of China to foreign direct investment has given rise to a huge wave of multinationals from around the globe, establishing some important forms of operations and working in mainland China. (China Mike, n.d.)
Firstly, Brand X invested small amounts of capital in China from the early 1990s but without considering a business strategy based on factors unique to the under-developed Chinese system of commerce. Since China is developing countries, the legal system, infrastructure and guideline are developing.(xi) Brand X cannot only invested small amounts of capital in China and without considering a business strategy based on factors unique to the under-developed Chinese system of commerce because China’s undeveloped infrastructure, government regulations, and regional protectionism fragment distribution channels throughout China.( https://wweb.uta.edu/insyopma/prater/IJPDLM%20logistics%20in%20China.pdf) For example, the legal system in China is improving and it cannot protect the foreign investors at this moment. Also, because of the unperfected infrastructure, foreign investors are difficult to find the distribution in China. The product production is also affected since the system in China is not effective enough. The unclear guidelines are the main problem that is faced by the foreign investors since they do not know how to follow the guidelines. (xi)
China remains an untapped market with great growth potential for companies seeking to do business in there. Be aware that the Chinese community is weary of companies entering the country because they believe that most companies are there to make a fast dollar. However, if a western company follows a few simple rules and adheres to some cultural outlines, success in China can be achieved.
With a population of 1.357 billion (2013)3, China is the most populated country in the world. Along with the huge population comes a market that is unmatched by any other country of the world. Both domestic companies and foreign companies want to tap into this large market that just recently embraced capitalism and entered into the World Trade Organization.
...tempt to change their image globally of worrying only about the money they have invested in developing countries and not being concerned with who is in charge of those countries, or the human rights abuses that are a result. Secondly, China has large interests in Sudanese oil. Beginning a relationship with Sudanese oil production in the mid-90’s, China has continued to making growing investments in Sudanese oil every years since. Importing up to 80% of South Sudan’s oil exports every year, China has money to lose as the fighting continues, and even more money to gain should South Sudan regain its stability. With China’s tight grip on the Sudanese oil market, it could make it difficult for the U.S. to benefit from increased investment in South Sudan, and the U.S. could even be inadvertently aiding China’s financial gains from South Sudan.
China's development is praised by the whole world. Its developments are not only in the economic aspect, but as well in its foreign affairs. Compared with other developed countries, China is a relatively young country. It began constructing itself in 1949. After 30 years of growth, company ownership had experienced unprecedented changes. Entirely, non-state-owned companies can now be more involved in sectors that used to be monopolized by state-owned companies.
At present China earns $300 billion off of the United States. This is every single year from just one country. Also, as of 2011 China reclaimed its dominance as the worldwide leader in manufacturing output. This along with the fact that their currency is backed up by gold means that even though the United States is the richest country in the world right now, China’s domination of the world’s manufacturing output-a title formerly owned by the United States-shows it’s leaders’ planning for their future as the next superpower (Fogel,2010). This planning h...
The China of today is nearly indistinguishable from the China just a generation ago. Where the country primary source of income was split between agriculture and a fragile military industrial complex, now the dynamic has completely shifted as industrial manufacturing coupled with a capable financial sector have catapulted their economy to be, by some measures, in excess of the U.S. gross domestic product. Most economic and political forecasters seriously expect to see China become the direct challenger to U.S. sole superpower status.
China has also expanded their trading industries with countries such as South Korea, Japan, Taiwan, ASEAN, India, Russia and Hong Kong. This has not satisfied the Chinese greed for income as they also export and import goods to American countries, name...