If there is one truism about China, then it has to be its unique business environment. Politically China remains a communist country, but one with a dynamic economy. This combination was never achieved by another country (KPMG, 2004). China’s economy is huge and expanding rapidly, with an average growth rate of 8 % in Gross Domestic Product (GDP) per annum for the last 30 years. The Chinese growth is almost miraculous and in 2007 China’s GDP reached 3.42 trillion US dollars, while most analysts expect China to become the largest economy in the world in this century (Economy watch, 2009).
China’s admission to the World trade Organisation (WTO) in 2001 signalled the growing maturity of this market and is expected to further increase the investment opportunities (KPMG, 2004). However, the global financial crisis has hit China hard with the growth rate for 2009, while still positive, expected to slow. About 26 million Chinese lost their jobs within the last 2 months which led to social unrest throughout the country. The government therefore started evaluating a second stimulus package in order to keep the economy going.
Lieberthal and Lieberthal (2003) give insights why China has an impact on all multinational corporations worldwide. They discuss that China is not only attractive for manufacturing, but furthermore worth for foreign companies to sell their products to the ‘1 billion consumer’-market.
However, for most Westerners the Chinese culture is difficult to understand, which can be explained by the very different and in some instances opposing styles of negotiation. The ‘eight elements’ of Chinese negotiation by Graham and Lam (2003) were summarised in order to explain the high failure rate of multinational companies in the Chinese market.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- The Chinese Economy and doing business with it
- China's Economic Development and Global Impact
- The Chinese Consumer Pyramid
- Market Entry Strategies and Challenges
- Multinational Corporations in China
- Success Stories and Failures
- Importance of Guanxi and Local Considerations
- The Eight Elements of Chinese Negotiation
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to provide an overview of the Chinese business environment and the challenges and opportunities for multinational corporations operating within it. It examines China's economic growth, its evolving consumer market, and the cultural nuances that significantly impact business practices.
- China's rapid economic growth and its global implications.
- The complexities of the Chinese consumer market and its segmentation.
- Strategies for successful market entry and operation in China.
- The importance of Guanxi (personal connections) in Chinese business dealings.
- Cultural differences and their impact on negotiations and business practices.
Zusammenfassung der Kapitel (Chapter Summaries)
The Introduction sets the stage by highlighting China's unique blend of communist politics and a dynamic economy, emphasizing its rapid growth and the significance of its admission to the WTO. It also briefly touches upon the impact of the global financial crisis.
The Chinese Economy and doing business with it delves into China's economic development since 1978, examining its low-cost manufacturing advantage, its emergence as a major trading nation, and the structure of its consumer market. The chapter segments the consumer market into four distinct groups ('Rich', 'Professionals', 'Salaried class', and 'Working class'), analyzing their spending habits and potential for foreign product consumption.
Multinational Corporations in China explores the experiences of multinational companies operating in China, highlighting both successes and failures. It emphasizes the importance of understanding regional differences within China, the crucial role of Guanxi in building business relationships, and the unique aspects of Chinese negotiation styles, referencing the 'eight elements' framework.
Schlüsselwörter (Keywords)
Key terms and concepts explored in this paper include: Chinese economy, multinational corporations, consumer market segmentation, Guanxi, Chinese negotiation styles, market entry strategies, WTO, economic development, and cultural differences in business practices.
- Citar trabajo
- Nina Rakowski (Autor), 2009, China in the world economy and doing business with it, Múnich, GRIN Verlag, https://www.grin.com/document/124003
