Govenrment and Business Environment Case Study

Business Environment in China

OR

Abstract:
By 1990, China had become a popular destination for foreign direct investment (FDI). There was an unprecedented boom in the FDI inflows into the country. Many companies made China their preferred manufacturing base. However, a number of them had a different and unpleasant experience. With examples of five well-known companies including Pepsi, Amway, Asian Strategic Investments Corporation (ASIMCO), Yamaha and McDonnell Douglas, this case helps the reader to understand the experiences of some of these earlier entrants that had invested heavily in China.

Pedagogical Objectives:

• To discuss the factors affecting the functioning of foreign companies in the light of tough business environment existing in the country.

Keywords : Business environment in China, Special economic zones, Sichuan Pepsi, Amway (China) Company Limited, Asian Strategic Investments Corporation (ASIMCO), Yamaha, McDonnell Douglas, Bank of England, Foreign direct investment, Guanxi, Joint ventures, Intellectual property rights, Deng xiaoping, Low cost destination, cheap labour, Protectionism