Emerging China

Assignment 1

Manage China's entrance in terms of investment and knowledge sharing into a sovereign country

MBA/11/2823 Ahamed Kishor Hameed

Course : MBA 503: Business Communication

Instructor : Prof. Uditha Liyanage

Co Instructor : Ms. Shyam Hettiarachchi

Term : January – March 2011

Postgraduate Institute of Management

University of Sri Jayewardenepura

1. Introduction

In this report we look at why Chinese Foreign Direct Investments should not be allowed freely, and should be managed. This report analyses the current status of Chinese investments globally and list downs concerns which prevails globally with regards to heavy Chinese investments.

The old world referred to China as a sleeping giant that it was better to let lie, because when it awoke it would shake the world. In fact, some economic historians argue that we are not witnessing the birth of a new economic power but rather its rebirth. Following the fall of Imperial China in 1911, after the instability, came the declaration of the People’s Republic of China by Mao Zedong in 1949. His rule was marked by major social and political disorder, until Deng Xiaoping came to power in 1978. This year formed a divide, a before and after in the recent history of China, with the implementation of structural reforms and a process of implementing the “open door policy”. All of this has converted into a period of growth and development that has continued into the present day.

Present day China’s cost advantages and its status as the world’s most populous country have caused it to be dubbed “the world’s factory” or “the biggest potential market in the world”. Over the last 30 years, this Asian giant has experienced one of the most rapid and spectacular economic transformations, with growth rates of over 10% a year. From the “open door” policy in 1979, to the “go global” initiative in 1999, and final liberalization of Outward Foreign Direct Investment (OFDI) by private firms in 2003,...