Foreign Investment Case Study

Globalization has been a very controversial topic through out our word today; China has been a great example of what globalization can do to a developing country. But when we look deeply into the roots of china we realize china may not have benefited as much as some think. China has had one of the richest cultural backgrounds in the world. This majorly changed as globalization worked its way into the heart of china; changing the culture with it. After china opened its doors to free trade it became a central for factory lines.

Chinese reform measures even anticipated the rush of foreign investment by opening newly expanded industries to out-of-country investors. Effects of this sudden change in economic strategy by a world power can be felt by practically every nation of the globe involved in international trade. The change in the amount of imports and exports to and from China will increase the demand on countless markets, from automobile, to petrochemical, to pharmaceuticals, and optical fiber. Also, with all the foreign investment China is receiving, the socialistic republic will only grow more and more interdependent upon the world economy. However, the impressive growth rate of China's economy is not without its shortcomings.

China has recently fallen into an economic slump. Because it is so involved with other countries around the world, this economic slump that China is going through is also affecting the other countries as well. The environment has also been affected negatively by globalization. There are many polluting industries, wastes, ecologically destructive practices, and air and water pollution. The reason this is happening is because people see China as a vastly growing country, corporations and companies want to move there because of the great opportunities they see to grow.

This cost of production to labor ratio is an important factor for foreign businesses to take part in China’s growing economy. Ever since China open its doors to the outside world, it has widely become a fighting space for foreign investors and business to raid in and take advantage of the vulnerable but growing economy, during that period. This has led to China today being one of the highest countries with foreign investments. Before China’s Open Door Policy in 1979, China was in a crucial point in trying to grow its economy. Balancing out the growing population and the need for jobs led to the idea of foreign investors and opening their doors to the rest of the world.

With the development of economic globalization and trade liberalization, degree of openness has gradually become a momentous factor that affects countries’ economy. On account of “Protocol on the Accession of the People 's Republic of China” and the WTO’s principals, China’s degree of openness is expected to rise after entering into the WTO. (This argument helps explain thesis statement (b)) B. China has the largest population in the world. Therefore, due to textile industry’s labor-intensive property, it’s obvious that China has a comparative advantage at producing textiles.

Foreign direct investment has played a vital role in the transformation of the Chinese economy in China, with value contracted increasing from US$ 52.1 billion (1998) to US$ 115.1 billion (2003). In geogra... ... middle of paper ... ...itten the full word Foreign direct investment and then in the brackets he has put the abbreviation (FDI). The article also give snap shot of the foreign companies who misjudge the Chinese culture, competition, size the market, and some other factors, have been badly affected by investing in china. The writer has given a name of the reference book in the article " The china dream" by Joe Studwell. He has also given an example of Dupont an American investor company in china to make the article easy to understand.

Outsourcing is not a strange word for China, the World Factory. China is earning this name by the 30-year experience of OEM, ODM and assembly manufacturing. However, the economic crisis has become a watershed for both the US and the PRC on topic of international labor cooperation. According to the statistics, the foreign capital is retreating from China, and nobody knows where it went. Chinese government started to eliminate labor-intensive industries and expand domestic demand by investing funds.

The Fall of The Orient. Zhiwu Chen, a professor of Finance at Yale School of Management, had once addressed two pivotal questions to the world: “Why has China’s economy grown at such a fast rate during the last 30 years, and is this growth rate sustainable?” Over the past decades, China’s uprising as a huge economy power was undeniably prominent, first in Asia and then to the eyes of the world. The most popular answer as the world knows it is because China has “vast and cheap labors”, but that is not necessarily true. The idea of China’s development has been supported not only by huge labor force. Instead, it was also driven by all the changes that happen in the world, which allowed China to gain from its labor force, and also improvement in technological developments, and social reformations (Hayat).

This became possible as the result of China joining WTO in 2001, which opened the market for Western companies by removing the trade barriers. -1- Economic: Economic factors are crucial to Tesco since they are directly related to profits, costs, prices and demand. One of such factors is unemployment rates. Following the economic downturn the percentage of unemployed people have grown rapidly in the UK as well a... ... middle of paper ... ...ntering the new market is always risky, however Tesco have managed to minimize that risk in the past by entering into partnerships and strategic alliances with local companies. By further expansion in Asia, Tesco could generate more profits from demographically high opportunity markets.

This paper is about the important of economic growth because is linkage with the globalization. The globalization brings the world into new level which makes us as a community to more interdependence to each other’s. This paper also explains how China develops their economy based on the historical, from close door system to the openness door system. The China’s rise as global economic superpower over last 30 years is example of globalization. It also examines the political influence during the Deng Xiaoping development policies in the Chinese Communist Party toward China economic.