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IB course
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NGUYỄN THỊ QUỲNH NGA AUG 10, 2021 01:00AM

The Only 1 International Players

1. Three compelling economic reasons to invest in China:
Members:

- Market Potential: with 1.34 billion citizens Nguyễn Thị Diễm Quỳnh - 1911155073
- Market Performance: rapid economic development catapulted Võ Hải Nhi - 1911155066
China from an also-ran in 1980 to the world's second largest Nguyễn Ngọc Cát Hân - 1911155029
economy in 2012
Bùi Lê Phương Hoa- 1911155035
- Resources: China's well-educated population creates an Nguyễn Phúc Lam Kiều - 1911155041
immense pool of productive labor. Wage rates for unskilled labor Nguyễn Ngọc Tường Vy - 1915535623
are less those in many other countries.

Question 1:

Three compelling political reasons to avoid investment in *Three compelling economics reasons to invest in China are as
China:
follows:
- China practices "State Capitalism" whereby the government - China has a great economy:  the current improvements in
manipulates market activities to achieve political goals. China economy's  makes its risks free to investment.

Consequently, MNEs doing business in China often find - A leader in science and technology:  the technology, research
themselves at a disadvantage. Western firms purchased big and development of China make the small business growth
stakes in Chinese companies. Political problems and legal rapidly with large interest.
difficulties short-circuited their plans. Eventually, like many - China’s well educated population creates a pool of productive
others, they sold their stakes and reset their strategies.
labor, at rates that are often less than those in many other
- Lack of effective protection of intellectual property rights can countries

be a particularly damaging issue to American companies.

* Three compelling political reasons to avoid investing in
- Political risk is the likelihood that political decisions, events, or China:

conditions will affect a country's business environment in ways - Negotiations with the Communist-led government can be
that,
difficult: it has a political system with a reputation for a lack of
+ Cost investors some or all of the value of their investments,
transparency and intolerance for dissent. Standards and
+ Force them to accept lower-than-projected rates of returns, conformity assessment. Rules stating how products are
and
designed, manufactured, sold, used and disposed of exist in
+ Threaten the sustainability of local activities.
China which all products must comply with before entering the
market. This can be a very foreign procedure to many
2. Operating safeguards for a company to adopt to better companies, and can impact the appeal of the country.

manage the risks of China’s legal environment:

- The nation has significant rules about the inflows and
Success in China requires a strong understanding of your outflows of capital that can change without public notice.

business capabilities, development of long-term relationships, - Corruption is pervasive in China. Transparency of

and in-depth knowledge of this market. Before making a government procedure and corruption are chief concerns of
decision to enter China, companies should consider their own companies moving into China, although as the new leadership is
resources, past experiences, and willingness to commit a ushered in, this is likely to change. 
significant amount of time assessing and cultivating * One criterion that could be traded off: The risk of suffering
opportunities. Successful entry strategies need to be targeted, from corruption when doing business in China is a criterion that
require well-qualified partners, measures to minimize non- foreign companies have to trade off for the opportunities of
payment risks, and a program for protection of intellectual doing business in this thriving economy, which offers the
property rights.
business a global environment to develop their market scale,
enhance tech level and invest in high profit generating sectors.
Members:
On the other hand, government has been taking measures to
- Cao Ngọc Quỳnh Hương – 1911155037
cope with the corruption issues so the risks of suffering from
- Huỳnh Khánh Linh – 1911155044
the problems will be mitigated.
- Nguyễn Thị Ánh Linh – 1911155045

- Phạm Thị Quỳnh Mai – 1911155047

Question 2: China is the complex legal and political
- Nguyễn Hoàng Tuyết Nghi – 1911155056
environment. Companies can minimize legal risk by applying
- Nguyễn Long Nhật – 1911155060 these operational safeguards:

- Conducting due diligence on the legal and financial - Lengthy negotiation with the government to do business:
background and reputation of key joint venture (JV) partners, Incorporating in China requires telling the government—in
acquisitions, senior managers, vendors, and suppliers before excruciating detail—who you are, what you want to do, how you
entering a formal relationship.
plan to do it, how much you intend to invest, and how many jobs
- Hire qualified and trustworthy managers and employees.
you will create. At each stop of the long march, national,
- Check the reputation of local government officials before provincial, and local officials ask how the investment encourages
committing to a particular locale.
capital formation, promotes exports, creates jobs, and transfers
- Prepare thoroughly its business plan and assess the risks of technology.

the activities supported by the company and the sector’s - Bureaucracy: Regulates activity based more on arbitrary
Chinese regulation
agendas than objective standards. Connections, not
- Conduct thoughtful and extensive investigation before competencies, often matter more.

investing in a Chinese company, buying property or creating a - Conflict between the central and local authorities: As Chinese
joint venture with another enterprise.
folklore warns, “The mightiest dragon cannot crush the local
- Implement internal control procedures and insist on the snake.” The center (located in Beijing) has no control over the
strict following of the legal and internal rules by the employees.
provinces due to the vastness of the country (9.597.000 km²).
- Both Chinese and foreign companies suffer as a result of weak When it sends people to investigate illegal pirating of CDs, local
IP protection in China. So, the key for any company seeking to governors block access to the factories.”

sell products in China is to create and implement a practical
and effective action plan which including: Evaluate what
intellectual property is important to the company; Review the
company's product portfolio and take action to register the
patents and marks that have not been properly registered in
China (subject to eligibility standard under Chinese law);
Register both the English and Chinese versions of the marks.
- State Capitalism: The government manipulates market
activities to achieve political goals. Consequently, MNEs doing
business in China often find themselves at a disadvantage. Exxon
Mobil, ABB, Caterpillar, and Vodafone purchased big stakes in
Chinese companies. Political problems and legal difficulties
short-circuited their plans, and they eventually had to reset
their strategies.

Also, a company should take precautionary measures within its

organization and that of its Chinese business partner to protect
its intellectual property. Criterion:

One criterion that we can based on to make a trade off between

Another team ( ☞ﾟ∀ﾟ)☞ compelling economic reasons and political reasons: Market
potential

Members: 

Nguyễn Hồng Trang - 1911155089 With near 1.4 billion people, China market represents a big part
Đinh Quỳnh Vi - 1911155101
of the pie and this part also has a strong buying consumption
Nguyễn Nam Phú - 1911155068
power. This will result in larger revenue and lower production
Châu Đỗ Ngọc Uyên - 1911155094
cost which will increase marginal profit.

Nguyễn Đoàn Hiền Thục - 1911155086

Phan Thu Thảo - 1911155078

2. Operation safeguards
1.
- Be clear about the cocept of legal system in Chinese society.
Three compelling economic reasons to invest: In contrast to some Western countries where legal systems rest
on the rule of law and its legitimate regulations transparently
- Market Potential: most populated country with buying power administered by public officials, China practices the philosophy
steadily increases.
of the rule of man, seeing the right of the “man” (once in the
- Rapid economic development: double real incomes per capita person of the Emperor, today in the form of the CCP) to act free
in just 9 years.
of checks and balances. Rarely does the Chinese criminal court
- Resources: the pool of productive and low-cost brainworker, end with anything other than a guilty verdict. There is really no
has doubled its number of universities over the previous decade, rule of law here, CCP make a decision ahead of time to make a
focus heavily on hi-tech education.
point.

- Strategic Positioning China represents the biggest growth
opportunity in the history of capitalism. The country is
experiencing roughly ten times the economic acceleration, on
more than 100 times the scale, resulting in an economic
transformation that carries over 1,300 times the force of change
than seen during the Industrial Revolution.
pirates. As following collectivist orientation, rule-of-man legacy,
Three political reasons to avoid investing:
- Business should establish information and IP securities when
doing business in China. China is well-know for being the theft
of intellectual property—patents, trademarks, copyrights, and so
on. So the U.S. authorities, noting the rarity of legal punishment,
charge Chinese officials with tolerating, if not encouraging,
and dubious enforcement of ambiguous laws—conditions that
create a political and legal morass. China is the premier
counterfeiter in the world.

-  Investigate in the requirements and targets of the

government to get the the project approved.   Incorporating in
China requires telling the government—in excruciating detail— versus the risks of doing so:

who you are, what you want to do, how you plan to do it, how - The cost of operating business in China, including legal and
much you intend to invest, and how many jobs you will create.
economic costs.

- Prepare thoroughly its business plan and assess the risks of 2. Suggested operational safeguards:

the activities supported by the company and the sector’s - Fully understand the environmental laws, regulations, and
Chinese regulation. In China, the rules often change standards of the host countries, as well as the key environmental
unexpectedly and create unclear regulations, obligations or risks for their projects.

prohibitions for companies.

- Prepare thoroughly its business plan and assess the risks of
the activities supported by the company and the sector’s
Chinese regulation.
– Conduct thoughtful and extensive investigation before

💋💋
investing in a Chinese company, buying property, or creating a
Yêu đi học chi joint venture with another enterprise.

- Implement internal control procedures and insist on the strict

Members:
following of the legal and internal rules by the employees.

- Lê Nguyễn Minh Hằng 1911155031;

- Businesses should work with their home governments to
- Nguyễn Quang Phúc Hảo 1911155033;
press the Chinese government to honor its commitment to open
- Trần Thị Minh Hương 1911155038;
markets, institute basic economic rules of the road, enforce
- Nguyễn Ngọc Minh 1911155051;
those rules it does have, and protect intellectual property rights.

- Đặng Thị Thảo Ngân 1911155054;

- Foreign Corporates should clear with the Chinese
- Hoàng Thị Phương Bảo Nhi 1911155062.
government (and within their own boardrooms) on what they
will and will not accept as the price of admission to China’s
1.
marketplace.

Compelling economic reasons to invest in China:

- Release existing computer code and patents for public use,
- Marker potential: 1.34 billion citizens, steady expanding form alliances with Chinese partners for joint production, and
market scope, reduced number of the poor, domestic markets in intensify their lobbying efforts with influential Chinese
early high-growth stages, etc.
government officials. Involving Chinese stakeholders in the
- Market performance: rapid economic development, the benefits that flow from technical innovation may over time
second-largest economy in 2012, etc.
promote greater enforcement protection.

- Resources: well-educated population creating an immense - China has political institutions that minimize the long-term
pool of productive labor (both factory and brain-workers), a risk of sweeping political change. Therefore it should have an
current five-year economic plan to study alternative energy, exit strategy also.

energy efficiency, environmental protection, biotechnology,

advanced information technologies, and high-end equipment
manufacturing, etc.

- Strategic Positioning: biggest growth opportunity in the

Dream team
history of capitalism, high economic acceleration (100 times the
scale), etc.
3.1.
Compelling political reasons to avoid investing in China:

- China practices “State Capitalism” whereby the government 3 COMPELLING REASONS TO INVEST IN CHINA:

manipulates market activities to achieve political goals.

Consequently, MNEs doing business in China often find + Market factors: highly populated - growing income -> increase
themselves at a disadvantage
in spending; “good” economic situation; good economic
- Political and legal systems make business operations a performance 
nebulous and frustrating process. Hence, many Western firms + Factor endowment: tremendous progress in infrastructure
sold their stakes and reset their strategies as purchasing big investment (still far to go), well-educated population
stakes in Chinese companies.
+ Strategic positioning: biggest growth opportunity in the
- Bureaucracy: its political and legal systems impose many
history of capitalism
time-consuming tasks. Moreover, China tends to stack the odds
against foreigners who are bold enough to forge ahead in the 3 COMPELLING REASONS TO AVOID INVESTING IN CHINA

face of an elaborate government bureaucracy and a fledgling

legal system. A bureaucratic system that regulates activities + Connections, not competencies, often matter  more. The 
based more on arbitrary agendas than objective standards. vastness  of  the  country leads to center authority has no
Connections, not competencies, often matter more.
control over the provinces. That means local officials, wherêver
- The long-running conflict between central and local Chinese they are headquartered, are often left alone by their comrades in
authorities further confuses issues. Even though the central Beijing
authorities in Beijing may appear to be all-powerful, the politics + The theft of intellectual property—patents, trademarks,
of powerful local fiefdoms often subvert their authority.
copyrights,  and  so  on. Relentless,  widespread,  and 
- IP rights: the theft of intellectual property—patents, sophisticated  robbery  of  their  intellectual property fuels
trademarks, copyrights, and so on.
China’s economic surge. MNEs can  lose  hundreds  of  billions 
A criterion to trade off the opportunities of operating in China annually  to  counterfeiting
+ Legislation is chock-full of ambiguities. Rarely does the
Chinese criminal court end with anything other than a guilty
verdict
A CRITERION TO TRADE OFF
People’s factor: Huge opportunities in consumer demand due to
overpopulation, when FDI has its affiliate in China, there is a rich
source of labor. 
1981. Hundreds of millions more, though poor, see a brighter
3.2. 
The operational safeguards that we would recommend
companies adopt in order to manage the risks of China's legal
environment are as follows
+ Should register and apply Intellectual Property in order to
protect the trademark, image, copyright of the business from
the theft of intellectual property in China. Meanwhile it is
complained that  there is relentless and widespread  robbery  of  years. China did the same in nine years. While China’s GDP
intellectual property and counterfeit goods, China rarely puts a
legal punishment. Therefore, businesses should use an IP
securities assistant when doing business in China.
+ Foreign companies need to avoid political problems and legal
difficulties relating Chinese socialist market economy while
doing business in China
+ Foreign companies and the Chinese government must
incorporate, work together in forming a corporation in China to
have the same vision and mission. 
Vương Tú Vy -1911155107
Nguyễn Quang Sĩ - 1911155075
Lê Ngọc Thanh Vân - 1911155100
Nguyễn Thành Vinh - 1911155103
Nguyễn Phạm Thu Uyên - 1911155098
Butterfly Players
Group Member:
Trần Thuý Hằng - 1911155032
Nghiêm Mai Yến Nhi - 1911155064
Tôn Nữ Thục Oanh - 1911155067
Nguyễn Tấn Tấn - 1911155076
 
 Nguyễn Thị Minh Hoàng - 1911155036
Question 3-1: Identify three compelling economic reasons to
invest in China. Then identify three compelling political
reasons to avoid doing so. Recommend a criterion one could
use to trade off the opportunities of operating in China versus
the risk of doing so.
 
Three compelling economic reasons to invest in
China.
 
Market Potential: With 1.34 billion citizens, China resets
conventional analytics. Consider that the Walt Disney
Corporation is building a $4.4 billion theme park and resort in
Shanghai where 330 million people—more than the population
of the United States—live within a three-hour drive or train ride.
China’s market scope steadily expands. Its economic growth has
reduced the number of poor by more than a half-billion since
future.
 
Market Performance: Rapid economic development catapulted
China from an also ran in 1980 to the world's second largest
economy in 2012; analysts see it becoming the world’s largest
sometime between 2016 and 2036. Growing income spurs
consumer spending. During the U.S. and British industrialization
in the nineteenth century, real incomes per capita doubled in 50
growth is slowing, it remains among the top performers in the
world. In response to this growth, exports to China have
increased
 
Infrastructure: In a multiyear program, China is investing
trillions on housing, offices, highways, airports, seaports,
waterways, dams, power grids, high speed trains and
communication networks.
 
Resources: China's well educated population creates an
immense pool of productive labor. Wage rates for unskilled labor
are less than those in man' other countries —perhaps 5 percent
of comparable costs in the United States, Japan, and Europe and
a third of those in Mexico and Turkey. Besides efficient factory
workers, China boasts a large and growing number of
productive, lower-cost brainworkers. China’s current five-year
economic plan directs millions to study alternative energy,
energy efficiency, environmental protection, biotechnology,
advanced information technologies, and high-end equipment
manufacturing.
Strategic Positioning: China represents the biggest growth
opportunity' in the history' of capitalism. The country is
experiencing roughly ten times the economic acceleration, on
more than 100 times the scale, resulting in an economic
transformation that carries over 1,300 times the force of change
than seen during the Industrial Revolution.
Three compelling political reasons to avoid investment in
China.
China practices “State Capitalism” whereby the
government manipulates market activities to achieve
political goals. Consequently, MNEs doing business in
China often find themselves at a disadvantage.
 
Western firms purchased big stakes in Chinese
companies. Political problems and legal difficulties are
short-circuited their plans. Eventually, like many others,
they sold their stakes and reset their strategies.
 Political risk is the likelihood that political decisions,
events, or conditions will affect a country’s business
environment in ways that: Cost investors some or all of
the value of their investments, Force them to accept
lower-than projected rates of return, and Threaten the
sustainability of local activities.
 
China relies heavily on export growth, and for this reason
the government still seeks to protect local firms, and
especially state-owned enterprises from imports, while
encouraging exports
 
Lack of effective protection of intellectual property
rights can be a particularly damaging issue to American
companies,  awareness of your company's strengths, the ability to develop
Recommend a criterion one could use to trade off the
opportunities of operating in China versus the risk of
doing so
 The criteria used to trade off here is the cost that foreign
investors must endure to minimize their risk of investing in
China and to develop their business in this prospective market.
Areas that will cost foreign investors are listed below:
Labor force: China is attractive to foreign investors with more
than 1.3 billion consumers and a labor force of just over 800
million workers. However, the population is unevenly
distributed. The vast distances between seats of authority helps
local officials evade the watchful eye of faraway bosses.
Piracy and Intellectual Property robbery: A sensitive tripwire is
the theft of intellectual property—patents, trademarks,
copyrights, and so on. MNEs complain that relentless,
widespread, and sophisticated robbery of their intellectual
property fuels China’s economic surge. Aggressive estimates link
nearly a third of the Chinese economy to piracy. To combat that
problem, the strategy for targeting organized piracy was
developed to stop the trade in these goods around the world,
and help businesses secure and enforce their rights overseas.
Moreover, foreign investors are well advised to evaluate the
types of manufacturing operations they wish to bring to China.
Investors that must bring in technology will need to develop
robust IP protection programs and apply information security
technology to separate sensitive information that could be used
to create competition from other information required to run
the business. In addition, employees who routinely come into
contact with intellectual property (IP) or financial information
should receive a summary pre-employment screening to verify
their resume details.
 
Legal and regulatory advice seekment: The principle of forming
a corporation “for any valid business purpose” does not exist
there. Incorporating in China requires telling the government.
MNEs endure protracted negotiations in obtaining permission to
open local operations. Foreign-invested enterprises that plan to
operate or invest in China or partner with a Chinese company
need to understand how the regulations apply to them before
entering into any agreements. Therefore, they need to wisely
seek legal and regulatory advice from experienced professional
firms in China.
Minimizing legal risk: Companies can minimize legal risk by
conducting due diligence on the legal and financial background
and reputation of key joint venture partners, acquisitions, senior
managers, vendors, and suppliers before entering a formal
relationship. Companies should also conduct pre-employment
screening of all employees and hire firms to screen and audit
vendors. Finally, companies may also wish to check the
reputation of local government officials before committing to a
particular locale.
 
Question 2: Operation Safeguards
In order to succeed in China, you must have a complete
long-term relationships, and a thorough understanding of the
market. Companies should consider their own resources, past
experiences, and willingness to commit a significant amount of
time assessing and cultivating opportunities before deciding to
enter China. Targeted entry strategies, well-qualified partners,
measures to reduce non-payment risks, and an intellectual
property rights protection program are all required for
successful entry strategies.
When founding and ending a firm, companies must follow
domestic regulations. Recruitment of personnel, mutual
protection of current workers, getting financing, safeguarding
investors, paying taxes, cross-border commerce, and contract
execution must all be done in compliance with relevant
regulations. Companies from throughout the world must be aware
of China's culture. Furthermore, China must broaden its horizons
in order to adopt the new culture. It is possible to achieve
successful collaboration between enterprises and countries
through knowing each other's cultures.
Cộng Đồng
Nguyễn Hồng Gia Hân - 1911155028
Lê Yến Nhi - 1911155063
Chung Ngọc Nhã Thi - 1911155079
Nguyễn Đan Thi - 1911155080
Nguyễn Quý Thương - 1911155087
Lê Thanh Tùng - 1911155093
Question 1:
3 compelling reasons to invest in China including:
Significantly increasing market potentials in China
China’s market scope steadily expand. Moreover, its economic
growth has reduced the number of poor by more than a half-
billion since 1981. Based on that basics, China’s market
performance has rapidly developed from an also-ran in 1980 to
the world’s largest sometime between 2016 and 2036. Therefore,
the real income per capita also increases overtime to improve
the standard of living and economic development. Furthermore,
Chinese population ranks 1st place in the world, which possibly
create a large potential buying market.
High-standardized infrastructure and technology
China has invested a great deal on its infrastructure including
airports, offices, highways, etc., which creates a good basis for
attracting foreign investors due to the convenience of
transportation and setting up infrastructure. Moreover, the
technology is also developing greatly in China, which
consequently could create a good base for foreign investors
without having to spend too much capital on reconstructing.
Abundant resources
China has an immense pool of productive labor based on Chia
well-educated population, with a wide range of literacy,
technical skills and wages.
3 political reasons to avoid investing in China including:
Copyrights are inconsistently protected: Intellectual
property is the legacy of a business. Legal vacuum and
lack of transparency in China are likely to lead to IP
problems.
The financial system is murky and favors state-owned
entities, which, despite all the private-sector growth, still
make up 40% of China’s economic activity, according to
the OECD
China - US trade war: has an impact on equity price and
investment growth. The war resulted in a decrease in
equity price, loss in market capitalization and eroded
investors’ confidence. The war is going to continue  biotechnology,  advanced  informa-tion technologies, and
A criterion one could use to trade off the opportunities of
operating in China versus the risks of doing so is the cost.
Although the basis of technology, labor and mass production in
China can help to reduce cost when operating in China, some
political reasons above can also raise the cost. Therefore, when
operating in China, there is a must to consider the cost, which is
the most important criterion possibly used to trade off.
Question 2:
Regulatory risk in China is high. Although many sectors of
China’s economy have become more market oriented, numerous
restrictions and a massive bureaucracy still hinder full
implementation of regulations and make the approval process
unpredictable. Here are some operational safeguards
recommendation to improve the risk management of the legal
environment in China
Work with the Chinese government to honor its
commitment to open markets, institute and enforce basic
economic rules, and protect intellectual property rights.
Diversification can reduce risk  government still seeks to protect local firms, and
Prepare an exit strategy under bad circumstances.
Tailor the global approach to compliance and invest in
more localized procedures and specialist teams
Having a strong understanding of your business
capabilities, development of long-term relationships, and
in-depth knowledge of this market
Conducting investigations on the legal and financial
background and reputation of partners before entering a
formal relationship
Sixy
Members
Lê Thị Mai Trinh - 1911155090
Thẩm Quỳnh- 1911155074
Phương Uyên - 1911155097
Thúy Vy - 1911155106
Nguyễn Khánh Trinh - 1911155091
Phan Đỗ Quyên - 1911155072
Câu 1:
1.1 Three compelling economic reasons to invest in China
Market potential & performance: China's market scope
steadily expands. Most domestic markets are in early
high-growth stages. Many MNEs that came for low-cost
workers stay for increasingly well-off shoppers. Also,
growing income in China spurs consumer spending.
China's real incomes per capita doubled in 9 years.
Resources China’s  well-educated  population  creates 
an  immense  pool  of  productive  labor.  Wage  rates  for 
unskilled  labor  are  less than those  in  many  other 
countries. Besides  efficient  factory  workers,  China 
boasts  a  large  and  growing  number  of  productive, 
lower-cost  brainworkers. China’s current five-year
economic plan directs millions to study alternative
energy, energy efficiency, environmental  protection, 
high-end equipment manufacturing.
Infrastructure: China is investing trillions of renminbi on
housing, offices, highways, airports, seaports, waterways,
dams, power grids, high-speed trains, and
communication networks.
1.2 Three compelling political to avoid doing so
Difficulty from China’s State Capitalism : the
government manipulates market activities to achieve
political goals. Consequently, MNEs doing business in
China often find themselves at a disadvantage. Ambitious
Western firms such as Exxon Mobil, ABB, Caterpillar, and
Vodafone purchased big stakes in Chinese companies.
Political problems and legal difficulties short-circuited
their plans. Eventually, like many others, they sold their
stakes and reset their strategies.
Bureaucratic system: regulates activity based more on
arbitrary agendas than objective standards. Connections,
not competencies, often matter more. 
Unfair treatment between local and foreign firms: China
relies heavily on export growth, and for this reason the
especially state-owned enterprises from imports, while
encouraging exports. Therefore, foreign firms and local
firms are treated unfairly.
Câu 2:
China's legal system is not well protected. Rules are not enforced
properly. Government is also biased towards local companies.
For foreign businesses to operate well in China, they need to:
Conduct thoughtful and extensive investigation before
investing in the China market. For a clear and detailed
view of this market
Prepare thoroughly its business plan and assess the
risks of the activities supported by the company and the
sector's Chinese regulation.
Prepare for transferring risks: For political risk, the risk
transfer can basically be achieved in three ways. The
 most common way to deal with political risk today is Strategic Positioning: China is experiencing an economic
through insurance. The second way is to hedge the risk acceleration higher than any country in the world. Most
through a bank or other high value companies are now venturing to relocate to
financial institution.The third way is to transfer the activity or China, aiming at the high-income population.
activity exposed to the risk through different forms of => China represents the biggest growth opportunity in the history
unbundling. The latter signifies contractual arrangements such of capitalism. The country is experiencing roughly ten times the
as joint ventures,franchising and various forms of counter trade, economic acceleration, on more than 100 times the scale, resulting
shifting part of the risk to an outside entity in an economic transformation that carries over 1,300 times the
IP protection programs and apply information security force of change than seen during the Industrial Revolution. 
technology: In order to minimize the risk of *Political Reasons
counterfeiting in China, foreign investors are well advised China practices State Capitalism: The Chinese
to evaluate the types of manufacturing operations they government manipulates the market activities just to
wish to bring to China. Investors that must bring in achieve political goals. This being said, the government
technology will need to develop robust IP protection has its own standards in accepting any company to
programs and apply information security technology to operate.
separate sensitive information that could be used to => China practices “State Capitalism” whereby the government
create competition from other information required to manipulates market activities to achieve political goals.
run the business. They must also regularly monitor Consequently, MNEs doing business in China often find
supply and distribution networks and the marketplace. themselves at a disadvantage. Ambitious Western firms such as
Exxon Mobil, ABB, Caterpillar, and Vodafone purchased big stakes
in Chinese companies. Political problems and legal difficulties
short-circuited their plans. Eventually, like many others, they sold
their stakes and reset their strategies.
(Some observers argue that, when it comes to doing business in
China, the number one rule is to throw away the rulebook. Sage
foreign investors abandon the notion that Western ideas
Chợ Nhỏ automatically work in China. The principle of forming a
corporation “for any valid business purpose” does not exist there.
Members:
Incorporating in China requires telling the government—in
- Lăng Ngọc Thúy Hằng _ 1911155030
excruciating detail—who you are, what you want to do, how you
- Lê Nguyễn Bình Mình _ 1911155048
plan to do it, how much you intend to invest, and how many jobs
- Lê Nhật Quyên _ 1911155071
you will create. MNEs endure protracted negotiations in obtaining
- Trần Trúc Thiên _ 1911155081
permission to open local operations. At each step of the long
- Nguyễn Ngọc Anh Thư _ 1911155083
march, national, provincial, and local officials ask how the
- Nguyễn Thị Minh Thư _ 1911155084
investment encourages capital formation, promotes exports,
creates jobs, and transfers technology. If you hit the right targets,
1. Identify three compelling economic reasons to invest in only then does the government green-light your project).
China. Then identify three compelling political reasons to Questionable political channels: It is challenging enough
avoid doing so.  to even get accepted to operate in the country but once
*Economic Reasons the operations have started, the issue of city and
Market Potential: China has a market scope that is provincial officials’ power trip can now be an issue as
steadily expanding. China has more than a large well. A lot of authorities have different rules and can
population and citizens have high income and are being involve a lot of issues when running a business.
updated to the latest version of any kinds of goods. That's => Foreign investors often navigate mysterious political channels.
why their spending ability and buying power have The long-running conflict between Chinese central and local
skyrocketed in recent years. authorities further complicates matters. Because of the country's
=> FDI in China in 2019 was $137 billion this number shows that vastness, local officials, whether based in the smallest town or the
many enterprises invested in China due to its market potential, greatest metropolis, are frequently left to their own devices by
and as we knew, investors tend to commit capital to higher-end their Beijing counterparts. There are national regulations, but
industries like healthcare, information technology, engineering, how they are implemented from Beijing to the provinces is another
and luxury goods =>One special thing ab china economics follow matter. “The central frequently lacks authority over the provinces,”
“success domino effect." => the more FDI a region attracts, the observes one observer. Local governors prevent access to the
more it grows factories when the government sends investigators to investigate.
Market Performance: The country has rapid economic The concept of legality: The country doesn’t have a clear
development. They were able to generate such wealth in basis on what is legal, even what is right or wrong. It is
just 9 years and now have incomes doubled which is instead based on the right of the man, which in this case
astounding. This is still at their early stages and yet the is the CCP. This means that anything can be right or
results are highly visible. wrong depending on their decision. 
=> China has reported high single-digit economic growth over the =>Political risk is the likelihood that political decisions, events,
past two decades, especially with Tencent or Xiaomi, which makes or conditions will affect a country's business environment in
it the fastest-growing major economy in the world. these following ways:
 Cost investors some or all of the value of their
investments
Force them to accept lower-than-projected rates of
return
Threaten the sustainability of local activities. 
=> China practices the philosophy of the rule of man, seeing the
right of the “man” (once  in  the  person  of  the  Emperor,  today 
in  the  form  of  the  CCP)  to  act  free  of  checks  and  balances. 
Besides being the law, the CCP is seen as above the law and given
the legitimacy bestowed upon it by its ostensible “mandate from
heaven.”. Rarely does the Chinese criminal court end with anything
other than a guilty verdict. Rather, explained an FBI Special Agent
and legal attaché at the U.S. Embassy in Beijing, “there is really no
rule of law here . . . they (CCP) make a decision ahead of time to
make a point.”
Vũ Thành Nam - 1911155053
2. What sort of operational safeguards would you advise to a
company to adopt in order to better manage the risks of
China’s legal environment?
Since China's legal system is not well protected. Rules are not
enforced properly. Government is also bailed towards local
companies. Here are some safeguards recommended:
China is a State Capitalism country, which sometimes
might lead to negative impacts like monopolism and the
government will do all to protect their local firms.
Therefore try not to disrupt the local business
environment by lowering the price, pushing promotion...
in the long term.  Its economic growth has reduced the number of
Consult the CCP and possible sources. This is to have an
understanding to prevent risks in such an unstable
country from arising...
It should work with their home governments to ask the
Chinese government to honor its commitment to open
markets, institute and enforce basic economic rules , and
protect intellectual property rights. Insist them to follow
the world trade organization's rules.  nineteenth century, real incomes per capita
It should understand competition prevailing. Chinese
companies are protected by the government. but are not
skilled with the knowledge of distribution and marketing.  China  represents  the  biggest  growth
It should diversify risk by not only concentrating in China
because the relationship between China and some of the
countries are not going well, especially the US.
Considering risks arising from these relationships would
help the businesses in China to minimize the risks when
they look for partnership outside the country.
China has political institutions that minimize the long
term risk of sweeping political change. Therefore it
should have an exit strategy also. 
Internet censorship in the People's Republic of China
(PRC) has made some controversial events censored from
news coverage, preventing many Chinese citizens from
knowing about the actions of their government, and
severely restricting freedom of the press. Moreover, the
Chinese government prohibits or strictly licenses wholly-
or partially owned foreign firms seeking to provide value-
added telecommunications services such as Internet-
based calls, video conferencing services, online search
and data processing, or virtual private network (VPN)
services. Therefore, doing business in China means the
directors along with employees having to switch to the
Chinese network. In some cases, it is necessary for the
headquarters outside the country to switch to some
Chinese available platform too since there is no way to
break its Internet system.
Công chúa ngủ trong rừng Thành Nam và
Nhật Trường
Members
Nguyễn Thị Trà My - 1911155052
Liêu Võ Khánh Huy - 1911155039
Trần Minh Luận - 1911155046 
Nguyễn Nhật Trường - 1911155092
Nguyễn Duy Minh - 1911155049 
Bùi Thị Thùy Liên - 1911155043
3.1
Three compelling economic reasons to invest in China
Market Potential
A population of 1.4 billion people and GDP of $12.2
trillion have earned China a reputation as a
economic powerhouse of the world.
Its market scope steadily expands
poor by more than half- billion since 1981
Most domestic markets are in early high-growth
stages
Market Performance
Analysts see it becoming the world’s largest 
sometime  between  2016  and  2036
During the U.S. and British industrialization in the
doubled in 50 years
Strategic Positioning
 
opportunity in the history of capitalism
Infrastructure 
In  a  multiyear  program,  China  is  investing
trillions  of  renminbi  on  housing,  offices, 
highways,  airports, seaports,  waterways,  dams, 
power  grids,  high-speed  trains, and
communication networks
Three compelling political reasons to avoid investing in China
Bureaucratic system
Connections, not competencies, often matter
more.
Chinese leaders regard state control of business
activity as the most reliable path toward
harmonious prosperity
The long-running conflict between central and
local Chinese authorities. The center often has no
control over the provinces.
Underdeveloped formal legal system
Legislative gaps, hazy interpretation, lax
enforcement, and philosophical disagreements
 China practices the philosophy of the rule of man.
The CCP is seen as above the law and given the
legitimacy bestowed upon it by its ostensible
“mandate from heaven.”
The world’s premier counterfeiter
The theft of intellectual property
American companies lose hundreds of billions
annually to counterfeiting
Local and provincial authorities rely heavily on
pirates to power local economic growth
China excels in making high-quality knockoffs.
Recommend a criterion one could use to trade off the
opportunities of operating in China versus the risks of doing
so 
Strategic Positioning: With the biggest growth opportunity
China presents, many MNEs have expanded quickly their
production and sales in China. This strategic positioning point of
China helps create big growth opportunity in China, however,
has to suffer from the great control of the Government for
national political reasons as China practices “State Capitalism”.
Therefore, China being strategic positioning is a criterion one
could use to trade off their big growth opportunity of operating
versus the risk of being not able to predict what the changes in
law for political reasons may come and affect their business.
3.2
Operational safeguards that one should take to better manage
the risk of China’s legal environment
Prepare carefully with full information about China
culture and legal environment, covering all potential
risks.
Protect the digital security of your company.
Put in place preventative measures and effective internal
controls. This should ensure chops can only be accessed
by trusted individuals who need them as part of their job.
Pay attention to the arbitration system, be clear in
contract which system will be applied. (international ones
highly recommended).
Purchase intellectual property insurance.
Những cô gái dui nhộn
Question1 :
Three compelling economic reasons to invest in China.
 1. Diversification
Unlike any other world market, this market has a lot of
commodities that allow the investor to diversify his/her
portfolio. Therefore, diversification caters to the investor’s
requirements and thus he can create better avenues for earning
profits.
4. A firm's director of Chinese operations should be
2. Potential market:  around disruptions caused by public health crises,
A populous country with 1.34 billion people. China's rapid
economic expansion propelled it from an afterthought in 1980 to
the world's second-biggest economy in 2012.
many of them have skilled knowledge. Companies should
3. Infrastructure
China is spending trillions of dollars in homes, offices, highways,
airports, seaports, rivers, dams, power grids, high-speed trains,
and communication networks over a multiyear period.
 
Three compelling political reasons to avoid investing
1. No independent judiciary. 
The government manipulates market activities to achieve
political goals, so there's no independent judiciary.
2. China's political decision affects investors’ benefits. 
For example, Following the G20 meeting in Toronto in 2010,
China reluctantly let the yuan rise. This made Chinese goods less
competitive.
3. US-China trade war
The fact that the US and China reacted fiercely with tariff
measures on imported products into their markets, not only
harming these countries themselves but also affecting many
other countries.
Recommend a criterion one could use to trade off the
opportunities of operating in China versus the risks of doing
so.
Since China has low manufacturing costs, cheap labor, and
high production capability, China is leading in the mass
production of products. This results in products' lower price
and easier access to various markets.
Question2
China's legal system is not well protected. Rules are not enforced
properly. Government is also biased towards local companies.
The operational structure that we would recommend companies
adopt in order to manage the risks of China's legal environment
is as follows:  
1. Companies must respect domestic rules when starting
and closing a business. Activities such as recruiting
employees, obtaining credit, protecting investors, paying
taxes, trading across borders and executing contracts
must comply with applicable law.
2. Foreign companies with the Chinese government must be
able to work together in opening up the market such as
having the same vision and mission, mutual
understanding of existing rules, and mutual protection of
existing workers. Chinese workers should be prepared to
follow foreign worker's way of working.
3. Global companies must understand the culture in China.
In addition, China must open up to accept the new
culture. By understanding each other's culture, we can
produce good cooperation between companies and
countries.
responsible for implementing a system that can work
environmental calamities, or large-scale social unrest.
5. Though China has a large and cheap labour force, not
create partnerships with universities and colleges to
train students in their desired way.
 6. Companies should collaborate with their home Nguyễn Ngọc Thảo Nhi - 1911155065
governments to encourage China to keep its Dương Ngọc Hồng Vân - 1911155099
commitments to open markets, implement and enforce Đặng Vũ Thúy Vy - 1911155105
basic economic norms, and protect intellectual property Châu Lê Mỹ Uyên - 1911155095
rights. Insist that they respect the regulations of the Nguyễn Quang Khải - 1911155040
World Trade Organization.

Team member: 
Nguyễn Trúc Mai Phương - 1911155069

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