Assess the potential advantages and disadvantages of the Chinese market for international businesses.

A

The Chinese government has few funds to invest in culture and education because of the financial burden of population growth, resource depletion, and environmental degradation. Although the physique and general health of China’s population are quite good, general education is less than optimal. Illiteracy rates had dropped from in 1964 to 20.6% in 1987, but the aggregate reduction is insignificant. Admission at colleges and universities is tremendously competitive, with rates as low as 4.6%, compared to the world average university admission rate of 14.3%. Rates in Britain, France, and Japan are 23.4%, 18.3%, and 15.4%, respectively. An estimated 0.66% of China’s population has a college education, 7% has a secondary school education, and 36.1 % has at least a primary school education. Most Chinese people have extended families.

The dramatic impact of globalisation on the world’s economic interdependence is demonstrated in new figures on foreign direct investment released on Monday by the United Nations Conference on Trade and Development ahead of its annual world investment report next week. The figures showed the Chinese mainland rapidly catching up with the US as the world’s most popular location for foreign investment. But the stock in the Chinese mainland totalled US$448 billion, up from just US$25 billion in 1990. Combined with Hong Kong’s stock of FDI of US$433 billion, China takes the number two spot. Chinese industry has continued to progress in this way, and currently, foreign countries with branches and interests in China include McDonald’s. In contrast to the USA, the main exports are IT products, agricultural and manufacturing products. The imports are power generating equipment, plastics and pharmaceuticals.

The actual distribution of products tends to follow geographic boundaries. For economic efficiency, however, marketing activity should cross national boundaries. Communication through jets and satellites certainly helps to hurdle boundaries, if not to make them disappear. Marketing then tends to become multinational. The confinement of markets within national boundaries is neither economically feasible nor desirable since modern technology functions best in multinational mass markets. The free movement of resources across “frontiers” has been one of the keys to American marketing success, inasmuch as the United States, in reality, is a “common market” composed of 50 states. Customs unions, common markets, and other organisations for supranational efficiency, however imperfectly they operate, are designed to facilitate the creation of mass markets.

Chinese markets achieve economies in the social, economic, and even political policies of member countries by pooling resources, technology, and markets. In many companies, international marketing is often regarded as a minor appendage to domestic marketing operations. International markets are seen as sources of “additional revenue” while a business continues serving its regular markets. This is the usual perspective, particularly when businesses first enter the international arena. Eventually, however (as international market opportunities expand, foreign investments increase, profits expand, and the rate of growth of international markets becomes greater than domestic market opportunities), the focus changes.

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Academic.Tips. 2022. "Assess the potential advantages and disadvantages of the Chinese market for international businesses." January 13, 2022. https://academic.tips/question/assess-the-potential-advantages-and-disadvantages-of-the-chinese-market-for-international-businesses/.

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