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Multinational Business in China

Multinational Business in China

Multinational business refers to the entry of international companies in foreign countries. It is a business that has its branches, subsidiaries, offices or production capacities in more than one country. Multinationals have capacity to expand production and their other operations around the world and to mobilize industrial plants (offshore) from one country to another. Mergers and alliances allow them to have growing power and influence in the world economy. Multinational companies were born as a result of market expansion. The first company that can be considered in the current history of multinationals was the Muscovy Company; it is English Company founded in London in 1555, dedicated to the commerce between England and Russia.

Scope of the Paper

The paper aims to discuss multinational business in the context of Chinese Economy. It will specifically highlight the dimension of distances, institution, industrial cluster and diffusion of technology with respect to China.

Dimension of Distances

There are several factors that affect multinational business arrivals in china;

Cultural and Social Factors

China's old culture has fascinated the West for a long time: Confucianism and Taoism, Qigong and acupuncture fertilize our own world. Social factors include the local culture, traditions, values and unwritten norms that are present and prevalent in the country. China is rich in its traditional and cultural values. It can be said that when you are in China as a guest they will treat you with greatest hospitality, but when you plan to live there permanently you have to follow the established cultural and traditional values of China. Chinese people deeply value their cultural and national heritage (Tian, 2007). It has been commonly observed that Chinese do not speak any other language even when engaged in international dialogues. Same is the case with currency; Chinese business prefers dealing their day-to-day business transactions in Yuan. Therefore, it is important for the business to consider these factors in the routine practices and take necessary measures to adapt in the cultural and business environments of China. The Chinese Culture Foreign Policy invested significantly in the spread of Chinese language and culture. The coming years will use China to continue to grow. China's growth in the future will put their stamp on the world economy. China will increasingly assume the role of a global player (Ellis, 2011).

Geography

China is the most populous country in the world. The form of government of China is a socialist republic ruled by a single party, the Communist Party of China, and its administration is divided into 22 provinces, 5 autonomous regions, 4 municipalities, and 2 special administrative regions (Bond, 2009).

China is bordered by 14 countries in north with Russia and Mongolia , to the east by North Korea , to the south by Vietnam , Myanmar, Laos , Bhutan and Nepal , to the west with India , Pakistan , Tajikistan , Kazakhstan , Afghanistan and Kyrgyzstan . It also overlooks the east on the Yellow Sea and the East China Sea and south-east on the South China Sea (Tian, ...