Its growing infrastructure has been a boon for companies like Caterpillar, which produces tractors and other heavy equipment. Found inside – Page 78How to Invest in Australia for Chinese Jason Mattock ... investment schemes have different business structures with their own advantages and disadvantages. Potential Disadvantages/Risks. Companies would like to scramble a slice of this market because of great opportunities and low cost of production. When there are many competitors, capture the slice is not easy. There are two primary business models in which the PRC (Peoples Republic of China) accept which are Sales Office via Labor Dispatch and a Wholly Foreign Owned Enterprise (WFOE). Found inside – Page 115There is nothing you can do about it. Go to court, it is useless”. In a sense, for many Chinese businessmen, the institutional environment of China, ... According to Noe, Raymond A(2002), employees are the important assets in an organization that needs recognition and support from top management. On the other hand, Chinese with collectivistic and femininity in nature are group-oriented and loyal to the group. That is “Impact of cultural differences on achieving goals.”. Registered Data Controller No: Z1821391. Lack of Intellectual Property Protections. Many of the relationships were strained. International trade has always been an attractive idea for merchants and businessman since time immemorial. Cheaper labor. Europe was in a terrible condition in 1946. Despite this, other researchers claimed that employees in the country resist participation in decision making because of their unquestioning attitudes toward their supervisors. Moreover, it helps the company in building good reputation and gaining competitive advantages. However, the result was inevitable.]. Thus, Chinese involved a lot in communication and consultation among each other. Found inside – Page 8Despite competitive disadvantages in financing , U.S. business can sell to the Chinese in the many areas where we have the highest quality , the most ... Found inside – Page 100Ernst & Young (1994) Doing Business in China, HK. ... Major disadvantages are the still relatively high customs duties and complicated import formalities, ... To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! China has become the manufacturing hub of the world. capital 100.0 Pacific. Despite a difficult economic climate across the world, in part due to the COVID-19 pandemic, China’s economy has continued to grow by near double-digit rates over the last couple of years (8.44% growth in GDP in 2021). You’re not over there, so... 3. in political and economic values, resulting in similar cultures that make doing business with each other easier and less prone to serious incidents. UK-China trade amounted to £81.1bn in the four quarters to the end of Q3 2020. Found inside... to compare the advantages and disadvantages of one location over another according to various aspects. These include cost of doing business, taxation, ... In the two retail businesses I've started, I reached ou… Administrative licensing, including difficulties gaining business licenses and product approvals. Outsourcing is a popular method of doing business all over the world, and everyone from large corporations to small businesses can take advantage of its benefits. It benefits company in the long-run because the satisfaction of employees may lead the retention of good employees. Found inside – Page 7The Ambler and colleagues text also notes that Chinese businesses have ... trade - off between advantages and disadvantages ” when doing business in China . They are able to recruit more and thus produce more for less. With the economic development, business is developing more and more transnational. They were worth £12.4 billion in 2013, up by 18% from 2012. But doing business in Germany can still be a challenge for those unfamiliar with the local requirements. These are incredibly challenging times for multinational companies and businesses operating in the United States. The pros. Found insideBecause China was accustomed to products made by stateowned firms, ... With stateowned businesses, factories only had to meet production quotas and send the ... Advantages of doing business in Hong Kong. One of the most attractive business destinations in the world and Europe's top FDI country, Germany is known for being a secure and rewarding investment location. Despite the fact that China has modernized a great deal over the last 25 years, it can still be difficult to understand for an American doing business there for the first time. If this is true in the U.S., it's a hundred times more true … Issues in Global Business is a broad subject that consist a lot of stuff including various challenges and strategies implemented on different issues. By doing business with China, you can locate the manufacturing needed at a cost you can afford so you can stay in business here at home. Firstly, there are some contradictories existed in the article. When these theories applied in the level of participatory in decision-making in the article, the contradictory existed again. And while knowing the advantages of CSR can help you exploit those areas more, acknowledging the disadvantages may give you the edge that can help save your business in the long run: Entrepreneur® and its related marks are registered trademarks of Entrepreneur Media Inc. In this paper, based on the case of ‘Cross-Cultural Challenges When Doing Business in China’ (Appendix 1), the analysis of culture will be conducted. US has profited considerably through trade with China. As businesses shift manufacturing for instance from richer nations to third world or developing nations, they take advantage of the cheap labor, weaker labor policies, weaker environmental policies, and support of the governments in these countries. On the other hand, it creates a lot of problems and issues caused in cultural differences and end up with a failure. Found insideThereare some obvious disadvantages totheparallel function structure. ... to generalize which structure is more suitablefor doing business in China. TORONTO — Russia is a lousy place to do business, but a great place to make money. Tesla will be facing a very crowded market by 2021, and the company “won’t stand out as it does now because Chinese consumers will have many choices,” says LMC Automotive’s Zeng. To capture China market, companies should use the adequate strategy and work hard on it. We explain the advantages and disadvantages. general Overview In 2006, according to The World Bank’s official measure, China had become the world’s A well-established Hong Kong distributor will have familiarity with doing business in China, (including language skills, currency issues and shipping considerations). We are talking possible two to three times the cost you pay for power in the United States. The 3 main disadvantages of doing business in China are:-The understanding of the language English: As you know, the business language is English. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. However, a complete solution to the losses from trade is inconclusive and like always not fully repairable. Found inside – Page 146The Portable Encyclopedia for Doing Business with Hong Kong Christine Genzberger ... Disadvantages : Cost of office space and staff , plus added costs for ... Once again, cheap labor costs play a crucial role in this aspect. For example, some researches propose that decisions are typically participatory in collectivistic-high power distance countries like China. In contrary, Americans who are from individualistic low power distance are reluctant to invest time and effort to solve the conflict. Besides, limited idea is one of the weaknesses that company might face and lead to a threat if other competitors have better ideas. Found inside – Page 198It gives the firm valuable market power or cost advantage that outweighs the disadvantages of doing business abroad. In addition, the foreign market must ... Instead, they deserve more reward on their hard works. It indicates the ability to send an email. Though only about 3% of all businesses started usually go public, I felt compelled to write on the process of taking a company public because you might someday decide to take your company public. Selected According to Bhagwati, J. Moreover, in collectivistic country like China, it is recommended to use both equality and equity principle in reward system. For example, West Point, Georgia, lost approximately 16,000 jobs in the 1990s and 2000s as local textile factories were shut down in favor of offshoring (Copeland, 2010). Copyright © 2021 Entrepreneur Media, Inc. All rights reserved. China Window is always on the lookout for well-written China topic articles: Submit your China topic article Disadvantages of doing Business in China: By Manoj Shivnani : My more than 10 yrs experience in import & export with china has taught me that the main disadvantages of doing business in china are related to the language, the meaning of a customer and the meaning of … For years, I've told people I'm bilingual. Since some characteristic like high formality, low disclosure, and openness as well as centralization are common in most of the companies; employees seldom have chances to really participate in decision-making process. Doing business in countries that are rife with corruption can be arduous, frustrating, even dangerous. Foreign direct investment has reached a record level. F or a long time, I worked for various companies that were doing business in China, and I found they were making the same mistakes over and … Top 5 tips for doing business in Asia As European companies seek to capitalise on the US' trade war with China, showing an awareness of cultural differences will be key to establishing productive business relationships . Disadvantages of Corporate Social Responsibility Unfortunately, the CSR programs come with their own set of challenges and disadvantages. There were two bloody wars that the continent had fought in just one generation, with both conflicts escalating to global status. Found inside – Page viii... Surrounding Africa's Shift Towards China: Perspectives on the Pros and Cons of Doing Business with China Introduction Disadvantages of China's Presence ... Chad and Darfur), South America (e.g. Complete freedom of capital movement. They do not make immediate decision when the circumstance is uncertain. Hong Kong is an ideal place to invest or to do business. But at the same time, I wouldn’t recommend rushing into it. Governments have a range of policies to expand trade while minimizing the loss of jobs. Date Published: March 2011. Outsourcing to China gives you access to that factory’s cheap labor without having to train the employees, provide access to a computer, or endure any of the other hardships of hiring locally. So expect some of the same if you decide to work with Chinese factories. This is probably the reason that doing business in China is currently so challenging. It's that simple. In 2019, the Wall Street Journal reported Kraft Heinz, Coca-Cola, and Gap Inc. are “among those at the end of the long, often opaque supply chains that travel through Xinjiang.”. From 2010 to 2019, UK-China total trade (excl. Some domestic factories in the U.S. are limited in capacity and time, but this is never the case with their Chinese counterparts. The global COVID-19 pandemic has created economic upheaval and a level of uncertainty to a degree not seen in many years. However, in spite of the many positives of international trade there have been less obvious problems in the form of labor discrimination (86 percent said discrimination exists in China’s employment market; 51 percent see the discrimination as serious. Benefits and advantages of exporting out-weight all the disadvantages. At the center of every business plan is a focus on profit … But please do not EVER let the intimidation of working with a factory of China be the reason you don't do business there. Doing business in China often takes longer than it would in most Western … Especially at first. We outline several key advantages that foreign investors can maximise on to conduct successful commercial activities. Eventually, reader will not get bored easily to read the lengthy words. The biggest ecommerce company in China, Alibaba, handled more transactions than Amazon and eBay combined in 2013, totalling more than $240bn. Most times, when a Chinese factory tells you they can produce your order in four weeks, they produce your order if four weeks. Getting known In Dubai, things can go from zero to one hundred in a flash. They emphasize harmony and relationship (“guanxi”). Clean and efficient government. I'm not here advocating that you copy anyone. The Heritage Foundation has ranked Hong Kong as the world’s freest economy. China also has proven to be a growing market for U.S.-made fertilizer and chemicals.). Chinese exports is around $1216 billion (2007) to countries as US 21.0%, EU 18.1%, Hong Kong 17.0%, Japan 12.4%, ASEAN 7.2%, South Korea 4.7% (2004) while its imports is around $953.9 billion (2007) from Japan 16.8%, EU 12.4%, ASEAN 11.2%, South Korea 11.1%, US 7.9%, Russia 2.2% (2004). A Labuan Islamic banking business is an excellent way to access the region’s ‘halal’ economy; Labuan is an emerging Asian FinTech centre.A Labuan FinTech business can capitalise on rising regional demand for i) payments and currencies (crypto-currencies, … In conclusion, globalization motivates a lot of organizations to go globally and extend their markets. In America value systems, reward system pay for performance and individual achievement. The advantages and disadvantages of international trade can all be managed appropriately with good market research and an understanding of foreign cultures. 7 Advantages of Doing Business as a Public Corporation. As the business houses tend to take advantage of weaker policies in labor and environment, there will be environmental pollution leading to health and environmental complications; further … My hat's off to the Chinese who have done an incredible job learning our language. But, generally speaking, it's cheaper to manufacture in China (and for a variety of reasons). Nowadays, businesses and organizations do not only limit in specific geographical areas. Chinese believe that one’s success belong to group work not oneself. ... China. As a result, company can not only practise harmony but also satisfy employees and perform fairness in the organization. Communism is a form of government that falls on the socialism spectrum, but this specific approach is very different than the community-based systems that look at group governing. Globalization, on one hand is beneficial in creating opportunities for global collaboration. And learn to ignore them. Finding a Good Manufacturer Manufacturers in China are old school. 2011-10-24T17:53:00Z The letter F. An envelope. In my experience, their manufacturing quality is not necessarily any worse (or better) than that in the U.S. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. Close proximity to markets in Asia. Manufacturing employment in China fell from 98 million in 1995 to 83 million in 2002. From the article, we know that collectivistic cultures emphasize cooperation, interdependence, and group goals, and thus prefer to support group harmony. Reasons why many U.S. companies are choosing to leave China include: Increased labor costs Advantages and Disadvantages of International Trade in China. As businesses shift manufacturing for instance from richer nations to third world or developing nations, they take advantage of the cheap labor, weaker labor policies, weaker environmental policies, and support of the governments in these countries. The language used by authors is generally not difficult and easy to understand. Doing Business In addition, offers detailed , which exhaustively cover business regulation and reform in different cities and regions within a nation. On the contrary, Americans are tasks and achievement-oriented. After that, the recommendations will be given based on the case, as well as provide some critical ideas about global business. Getting known In Dubai, things can go from zero to one hundred in a flash. A. Electricity- The cost for electricity is significantly higher in China with several “hidden” costs that you should be aware of in their billing structure. Therefore, cross-cultural management is important for a company to go globalization and familiar with the particular country. The cost is minimal and the benefits are priceless. What about Louis Vittuon?" Food, consumption, demand, agricultural research, fertilizer, land, water resources, infrastructure, domestic grain, international grain market, economy, business, markets, tariffs, environment, health, productivity, pollution, energy, ... China’s major disadvantages in international trade is mainly reflected in the following three aspects 1. Learn vocabulary, terms, and more with flashcards, games, and other study tools. But if I could meet their requirements, then they wanted to do business. Related: Why the Second Time Isn't So Easy Either. Just remember to use the same words to refer to something as they do. … The biggest caveat to all of this is that manufacturing overseas typically only makes sense if you’re dealing with very large production runs. Manufacturing in China also comes with a lot of drawbacks, and these can only be offset when you are taking advantage of bulk ordering. According to Dess, Lumpkin and Eisner (2007), strategic management includes a lot of management and challenges which is a crucial thing for going internationally. I used an agent when manufacturing in China who was reponsible for ensuring the quality and accuracy of the manufacturing of our goods along the process. Thus, globalization is important and become crucial especially for those companies who are growing and expanding. Corruption, for one, remains a serious impediment to investment in the country, but there are huge gains to be had for companies that can navigate the business climate. Besides, although the content included a lot of “high” and “low” word and some statistics, it is not complex at all since authors have already summarized it into the table. UK exports of goods to China have more than doubled since 2010. Starting a Business - Taiwan, China Figure – Starting a Business in Taiwan, China – Score Procedures 88.2 Time 90.5 Cost 99.1 Paid-in min. Despite the fact that China has modernized a great deal over the last 25 years, it can still be difficult to understand for an American doing business there for the first time. In the contrast, Chinese who are high risk avoidance prefer comparatively safer always avoid risks. Not much more needs to be said. We're here to answer any questions you have about our services. At the same time, soybeans account for more than 50 percent of the total U.S. agricultural exports to China, which also plays an important role in China-U.S. trade. Thus, I would suggest that although one cannot claim the reward just for oneself, he or she can claim “more reward” according to his or her effort. Use photos to help illustrate your points. Trade does have enormous benefits but not without some corrections required and some inevitable losses in the form of job cuts. Found insideThe China trade act is a wel . come step in the direction of overcoming certain disadvantages in doing business in China , even under State charter ... According to Deresky (2006), Autocratic management is not well-received in this culture. Greg Shugar is Co-Founder of Thread Experiment, the world’s first brand of home bedding dedicated to men. Basically, Americans do not focus on long term business relationship and therefore tend to deal the business as soon as possible. Moreover, readers are able to know that which value dimensions affect which aspects to the organizations. Therefore, employees need appreciation and encouragement from their superior in term of motivation. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! Then there's the time difference. Substantial part of the economy of China depends on international trade. UK exports of goods to China have more than doubled since 2010. Quality Control Quality control is also an issue when it comes to manufacturing in China. making the firms and the country more competitive, increased the variety of products available to the consumers, domestic manufacturers matured and increased competition in local market (e.g. Multinationals can pollute more in China mainly because of an incomplete regulation system and loose supervision with few penalties that lead to a low incentive for keeping to the environmental law. Yet, with any factory -- overseas or domestic -- it will be important to stay on top of quality control because mistakes happen and shortcuts are made no matter where the factory is located. There are two primary business models in which the PRC (Peoples Republic of China) accept which are Sales Office via Labor Dispatch and a Wholly Foreign Owned Enterprise (WFOE). Hofstede and Bond’s value dimensions can be used in many aspects in the organization which included cooperative strategies, conflict management, decision making, level of participation, work-group characteristics and motivation system. Communication goes beyond language. Greg originally founded The Tie Bar and grew it into a $20 million business before a private-equity firm acquired the brand. Therefore, organizations should pay attention on the issue. Chinese factories work are far lower profit margins than those in the U.S. As a result, they are almost never able to accommodate one-offs and, generally speaking, their minimums are often higher than other countries. China’s benefits were as follows: its economy has been growing at a very rapid rate (for instance, China’s economy grew at an average rate of 10% per year during the period 1990-2004, the highest growth rate in the world. Found insideHow do we account for this continuing interest in JVs? We'll come onto the advantages and disadvantages of JVs in more detail in a moment, ... Moving Too Quickly. In addition, there is always the language barrier to overcome as well. On the other hand, collectivistic cultures focus on cooperation, interdependence, and group goals. One of the major disadvantages of international trade is that, many times, … Meanwhile, cultural comparison also will be evaluated between China and America. The main advantage of doing business in China is the fact that China has emerged as one of the world’s strongest economic forces, driven by the shear number of…show more content…. All work is written to order. That seems to be a barrier to entry for many and it should never be. China, with the widest land and population has become popular for foreign investors to go in. The 10 Biggest Problems With Doing Business In China. Benefits for UK businesses exporting to Bangladesh include: Strengths of the Bangladesh market include: annual growth rate of at least 5.3% over the last 16 years. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. Image and Reality. China’s affordability makes overseas manufacturing ideal for the common business. For example, if you're manufacturing shirts and you like the fit of Shirt Brand ABC, then buying Shirt Brand ABC and asking your Chinese factory to duplicate its dimensions and fit is an easy way to begin your product-building process.Quite frankly, no one does that better than the Chinese. Info: 1808 words (7 pages) Essay 2. Found inside – Page 55China Investment Compass also contains information on the advantages and disadvantages of doing business in each development zone , as well as comparisons ... Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. consumers earn more discretionary income, they want the quality, Trade also leads to higher GDP, better and more choices of products for consumers, increase in competition in domestic market leads to competitive prices which is good for consumers, competition also leads to better quality in goods and services, and reduces unemployment and poverty. Meanwhile, cultural comparison also will be evaluated between China and America. Doing business in China can be a powerful way to grow and expand your business, but don’t go into it lightly. As a result, readers will not confuse among each other. They can host the inventory and run the business from the United States, and enjoy a low overhead. Today, the average wage in Mexico is only 20% higher than in China. Furthermore, it is clear that authors discuss the Hofstede and Bond’s cultural dimension into several aspects and separate it into subtitles, which are general cultural differences, cooperative strategies, conflict management, decision making, level of participation, work-group characteristics and motivation systems. Both the US and China has suffered job cuts. Based on andecdotes from colleagues of mine (since I've never manufactured in the U.S.), I've heard this isn't necessarily the case in the U.S. On several occasions, I've heard the common complaint that domestic manufacturing capacity was limited in capacity or time or, at the very least, not nearly as robust as Chinese factories. Found inside – Page 62Those who are divorced are perceived to be of “less value” and in an SOE or governmental setting can suffer disadvantages such as missing out on promotion. ), saw a large growth in cities (population: 30% urban in 1950, estimated 60% urban in 2030, 19 mega-cities > 10 million, 22 cities with 5 with 10 million, 370 cities with 1 to 5 million, 440 cities with 0.5 to 1 million), increased the technology and business exposure of domestic firms and the countries technological expertise (China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites.) The challenge of China market entry has become an increasingly important one of Western companies of all shapes and sizes. Firstly, when there is a group of people doing one thing, they might chit-chat and do not concentrate in their work. China is the world’s second largest economy, and the largest measured on a purchasing power basis. Found inside – Page 142For example, while vertical authority seems to be a norm in both China and ... Although a single party control system has many disadvantages, in China, ...