Business in China

TR here is an article that was apart of an assigment for another class that is related to your post. It talks about how difficult it can be to relocate a foreign business in China. I found it interesting, so I made it into another post.
The article gives many examples of why starting a business in China can be good and bad. It seems to me that it would take alot of work. It is true that many companies want to go there to cut down cost, but is it worth it? If a company is to relocate to China or any other country for that matter, they must develop and follow a plan. The article talked about gaining the trust of government officials, get to know the culture, and be productive. The Chinese Government is right with being choosey on enters. Those who don't do this won't last. The only focus of a company shouldn't be to enter a country becuase it cost and you can pay the workers less, but more to make an impact on the culture. Help a struggling economy maybe? Companies need to show the respect neccessary, and not exploit workers by making cheaper, less quality products for a higher profit. I don't know, what does everyone think?


Jacob said...

I agree with you that companies should respect the people they hire when entering a country to do business by paying better than average wages. In addition, it would be nice if the entering companies would make it a priority to help the struggling economy. But, unfortunately companies are leaving the countries they are from in an effort to pay lower wages and to minimize cost. I am torn on the subject of large companies opening, "sweat shops," in less developed countries. On one hand the entering companies are providing jobs to people who had no job or money previously, while on the other hand, the companies are paying such low wages that their workers are still left in poverty type circumstances. It is unfortunate that our society is driven by making more money at the expense of anything it takes to get it.

Jada said...

Another issue of doing business in China that a company needs to consider is the dramatic increase in labor, housing, and taxes in cities such as Shanghai. Increase in start up costs may be a deterrent. However, the chinese government is aware that its 'coastal' cities have had this dramatic increase and are offering incentives for business to set up further inland where 700 million people are currently earning less thatn $1,000 a year. There is an opportunity here for cheap labor (not a sweatshop) and offering the laborers a chance at a better lifestyle as well with better paying jobs.

Dr. Tufte said...

-1 on Mason and Jada for spelling errors.

I like both comments.

I dislike the sweatshop label. The obligation of anyone is to make those around them better off. There is no threshold requirement that people be made better off than some specific level. Yet, that is what the "sweat shop" position entails: there is a hurdle to be cleared to be labeled good. I think it is morally inept to claim that an improvement isn't an improvement because it isn't enough.

Don't sweat it Jacob - arguments like this are common enough, and somewhat persuasive. That's why we ask what other people think. You don't have to agree with me ... but now you know.