China is a country in the Southeast of Asia. It borders Mongolia to the North, India in the south, and the two Korea’s to the east. According to the textbook, china’s population is 1.3 billion which is the most in the world coming ahead of its southern neighbor India who are second. (Luthans & Doh, 2012, p. 230).
According to CIA world Fact book, the common languages in china are Standard Chinese or Mandarin (Putonghua, based on the Beijing dialect), Yue (Cantonese), Wu (Shanghainese), Minbei (Fuzhou), Minnan (Hokkien-Taiwanese), Xiang, Gan, Hakka dialects (CIA World Fact book, 2013)
China has always been one of the more civilized nations throughout the history of time until being surpassed during the 19th century by the other European nations. Under the reign of Mao Zedong and his communist party, an autocratic socialist system was formed in China and continuous to flourish till today to the detriment of the people. Today China is led by Xi Jinping who is the 7th president of China. Technology
China views technology as a key to attaining its economic goals, and ha a literacy rate of 95.1%. One of the steps that China is taking to avoid it heavy reliance on its huge labor force is by creating more skilled workers producing more than 10,000 Ph. D. in 2009 which is more than any other country. Also according to English.news.cn china published 121,500 academic papers which is more than any other country, and is about 9 percent of the world total. China’s influence in science and technology doesn’t just stop at scientific work however; they also have some of the world’s bigger technology companies.
Huawei and Lenovo are two examples of such, which specialize in telecommunications and personal computing. China is also in a constant competition with the united states for the lead in the super computing race. China is also the world’s leading investor in renewable energy technology; this is an understandable investment considering their population and the need to find an efficient way to provide for its large populations needs. Trade and integration
According to the text china has a mixed economy with a combination of both state owned and private firms. (Luthans & Doh, 2012 p.230). There have been attempts recently at privatizing some of the state owned enterprises in china, but these attempts are still moving relatively slowly as all the most successful companies are all still state owned. According to Forbes China has three companies in the current top 25 companies based on market value which include PetroChina, ICBC, and China Construction Bank which are all state-owned. (Forbes 2011) China officially became a member of the WTO in 2001 meaning they had to change a lot of their regulations to allow businesses to be able to operate more freely which opened them up to a lot of foreign investment.
This could be considered one of the main factors that helped lead to them becoming the world’s leading exporter in 2010. This was not the case before as investors were scared away by their high tariffs, and foreign ownership limitations. According to Transparency International China ranks 80 with a score of 39 out of 100 on the corruption perception index 2012. According to CIA factbook China had a GDP of $9,300 in 2012 which is a 7.8% increase from the last year and ranks 124 in the world. These are not great numbers for a country that has the second largest economy from a nominal GDP stand point but the good thing is they are growing.
Migration of labor China is noticing increased urbanization at a rate of 2.85% which brings their total to 50.6% according to CIA Factbook. This percentage seems small until you remember they have a population of 1.3 billion. China is noticing a lot of people who worked in farmlands or were involved in agriculture moving to urban areas and away from agricultural jobs.
According to the International Labor Organization, in 2009 China had 229.8 rural migrant workers, and 145.3 of this people worked outside of their hometown more than six months in the year. This is just more evidence to show the increase in urbanization which is taking place. The majority of these migrant workers can be found in the construction and manufacturing industry, and can be found predominantly in the eastern half of the country in the bigger cities such as Beijing, Shanghai, and Guangzhou. Transportation:
China is continuously looking for new ways to connect all of its major provinces and cities especially those with populations over 200,000 residents. According to Forbes, China’s national Trunk highway system at 85,000km in 2011 is the world’s longest national freeway system. This is more than that of the US who come in at 75,932km. It is also important to note that China has no intention of stopping there as they continuously looking to expand on their highways system while the US system is not expected to grow significantly going forward.
China has now surpassed the US as the largest automobile market, due to the rise of private ownership of vehicles. They had over 13.6 million car sales in 2009 and they are predicted to go up to even 40 million by 2020 which is a very encouraging sign for automobile industries. There is a noticeable correlation with the increase in cars due to availability of new roads, and China’s GDP.
Even with all of this new additions to facilitate easy transportation majority of the population of China is still extremely poor and in some cases will never be able to afford a car or even if they can afford one find it more stressful to drive due to the high amount of traffic they have prefer to use the other means of transportation. High speed rail lines as well as rapid transit are just other forms of transportation that the Chinese are coming up with to ease the flow of traffic.
China is also expending a considerable amount of resources towards the construction of airports. In 2012 they began a $250 billion five year project to expand and modify their air travel, to a certain extent however all of these changes don’t benefit the public as 80% of the air space is limited to military use only. The rest of the population who cannot afford the other mentioned modes of transportation end up being limited to bicycles, and buses. Environmental pollution:
As was the case in any major industrial country before China they have major environmental problems, which are also compounded on the fact that the overpopulation of the country was already a factor to begin with. According to CIA factbook, China ranks first in carbon dioxide emissions from consumption of energy. This comes from their 13.6 million cars, as well as other factories found all over the country. Pollution in China is so bad they have 16 of the world’s 20 most polluted cities. Water pollution is such a severe problem that almost 298 million people in Chinese rural area do not have access to clean drinking water; also almost 40% of China’s rivers have been polluted by agricultural and industrial waste.
Similar to their neighbor India thick smog can be felt in the big cities like Shanghai, and Beijing which was a big concern during the Olympic which were just hosted in China. The government is taking measures to prevent the spread of this pollution as they now are the leading investors in renewable energy commercialization with more than $52 billion being invested in 2011. Implications on international management:
In summation from all the information given so far as an international manager I would definitely have to say that China is a very attractive destination for foreign investment. In every section of this analysis I alluded to a subject that companies could capitalize on primarily due to the huge population found in China meaning there is almost always room for another competitor and because this is still relatively a growing country with a lot more potential.
Secondly China is a very educated country as mentioned earlier with a lot of people who are educated but due to their ascription based society are not given a fair shot at success, also due to their lower wages compared to the US would be a favorable location for outsourcing jobs.
China still is a totalitarian country but it has been loosening up on its rules which is a favorable condition for MNC’s interested in foreign investment. As mentioned when talking about transportation China had over 13.8 million cars sold last year and are projected to reach 40 million by 2020. This means more car sales obviously, more construction from road, insurance, maintenance jobs, unfortunately more fatalities as well which are all opportunities for MNC’s which capitalize on any of the following. The biggest and only fear that MNC’s would have when considering expansion to China would be their communist government and its ability to apply any changes it likes whenever it likes.
References Luthans, F., & Doh, J. (2012). In the International Spotlight: China (p. 230). In “International Management: Culture, Strategy, and Behavior” (8th edition). McGraw-Hill. 2012 Perception Corruption Index. Retrieved from Transparency International at http://www.transparency.org/cpi2012/results on 9/27/2013. The CIA World Fact Book. Southeast Asia: China retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html on 9/25/2013. FRANKENSTEIN, JOHN. "Living The China Dream." America 209.10 (2013):
14. MasterFILE Premier. Web. 2 Oct. 2013. China publishes the second most scientific papers in international journals in 2010: report Retrieved from English.news.cn http://news.xinhuanet.com/english2010/china/2011-12/02/c_131284862.htm 2 Oct. 2013 The World's 25 Most Valuable Companies: Apple Is Now On Top Retrieved from Forbes. http://www.forbes.com/sites/scottdecarlo/2011/08/11/the-worlds-25-most-valuable-companies-apple-is-now-on-top/ 2 Oct. 2013 The International Labour Organization retieved from
http://www.ilo.org/beijing/areas-of-work/labour-migration/lang--en/index.htm Once China Catches Up--What Then? Retrieved from Forbes. http://www.forbes.com/sites/currentevents/2013/09/17/once-china-catches-up-what-then/ 2 Oct. 2013