THE THREE COMPELLING ECONOMIC REASON TO INVEST IN CHINA ARE:

 MARKET POTENTIAL: With 1.34 billion people, China has a big market. For this reason,
the Walt Disney Corporation is investing $4.40 billion in a theme park and resort in
Shanghai. Since 1981, China's economic growth has resulted in a decrease of more than
half a billion people who live in poverty.
 RESOURCES: China's vast pool of factory workers who are educated and productive is
another inducement to invest there. Additionally, it is clear from the case that China's
plan to produce 195 million college graduates by 2020 as well as its five-year economic
plan, which encourages millions of people to study energy efficiency, environmental
protection, biotechnology, etc., will result in the creation of a sizable pool of educated
human resources.
 STRATEGIC POSITIONING: China offers the greatest possibility for expansion in
capitalism's history. An economic revolution is taking place as a result of the nation's
approximately 10-fold economic growth. Ford intends to increase production in China
by a factor of two, while General Electric has moved its 115-year-old X-ray operation
from Wisconsin to Beijing.

THE THREE COMPELLING POLITICAL REASONS TO AVOID DOING SO:

 State capitalism is used in China, where the government manipulates market activity to
further its political objectives. MNEs operating in China as a result frequently find
themselves at a disadvantage.
 Large shares in Chinese corporations were bought by Western companies, but their
ambitions were derailed by political and legal issues. They eventually sold their
investments and changed their tactics.
 Political risk is the possibility that political decisions, actions, or circumstances will
change a nation's business climate in ways that,
- Investors paid a portion or the entire value of their assets.
- Make them tolerate return rates that are lower than anticipated.
- Endanger the viability of local businesses.

WHAT SORT OF OPERATIONAL SAFEGUARDS WOULD YOU ADVISE A COMPANY TO ADOPT IN ORDER
TO BETTER MANAGE THE RISKS OF CHINA’S LEGAL ENVIRONMENT?

The Chinese legal system is weakly protected, and laws are not consistently upheld. The
government also favors regional businesses. So, to mitigate these legal environmental risks, we would
advise a corporation to use the following operational safeguards:

 A firm must abide with domestic laws when opening and shutting down a
business. Employers must follow all applicable rules while hiring personnel,
acquiring credit, protecting investors, paying taxes, engaging in cross-border
trade, and executing contracts.
 Global companies must understand the culture in China.
 China must also be willing to embrace a different culture. By doing this, the
nation may encourage effective international cooperation between businesses
and nations.