Managing Multinational Operations

Managing Multinational Operations

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Abstract

Documentation of how and why companies take advantage of foreign opportunities, especially through foreign direct investment exists. China is one of the many countries, which has fascinated the flow of foreign direct investment and has become the largest recipient. The many factors, which favor the foreign investment with the opportunity to grow has vastly attracted most Multinational corporations from all over the globe. As an emerging economy, with a fast growing economy, china has many opportunities with favoring policies, which promote the business of an organization. This paper will briefly examine the economy of china, and later focus on the factors that Acme or any MNE would consider when doing business with china.

Introduction

Recently, china has recorded tremendous growth in foreign direct investment. This trend is particularly significant to the economy of the country. In the year 2004, china recorded the largest recipient of foreign investment, ahead of United States of America. Consequently, the flow of multinational business in the country has made china extremely competitive in the world market. Since the adoption of reform and opening-up policy in 1970s, china has formed the greatest attraction for foreign companies.

China Economy

China is among the fast growing economies in the world. Current rates show that china has an average growth rate of 11%. While they concentrate on manufacturing industries, china enormously uses high technology in producing their products. Among the factors that significantly contribute to the fast growing economy is the availability of cheap labor and ready market for their products. Additionally, the productions of quality product, which make them highly competitive in the world markets positively, affect their economic growth (Bureau, 2005).

Factors Acme or any MNE would consider before investment...