Members: 06/28/24

Guevarra, Alethea
Mañebo, Isabella
Ramos, Sofia
Ruda, Sheena

MGT 1111 Sec 4

According to the textbook, "A country with democratic political institutions, market-based
economic system, and strong legal system is clearly more attractive to do business in."

1. Do you agree with this statement? Explain.

Sofia: I agree with the said statement. In democratic institutions people can start any business
and work together without restrictions. One company can help another and it creates a ripple that
spreads across the country. In return, this makes monetary growth more prominent domestically and
also in the world. Global stability or better said stability has boosted the interests of businesses. This
creates more job openings, more employers, and more employees (R.Rossington, 2021).

Sheena: I personally agree with the statement above. Democracies often have stable political
environments, with regular elections and defined protocols for leadership transitions lowering the
possibility of rapid political instability. According to Williamson (2014), it is proper since
democracy is better at securing the supply of public goods such as education, health care, and
infrastructure; managing markets more effectively; and channeling conflict into political
compromise rather than political violence. Individual and corporate rights are protected in
democratic nations, resulting in a safe environment that stimulates investment, innovation and
growth. In addition, it provides companies the security and confidence they need to prosper in
competitive markets by protecting their property rights, free expression, legal remedy, and
responsibility.

2. Would you ever consider doing business in China? (considering that China is not
democratic) Explain.

Isabella: Would I consider doing business in China? My answer would be a no. Let’s take a look
at the pros and cons of having a business in China as a Filipino. In doing a business it is
important to think first of the location, the rules and regulations in that location, the target
market, the cost of your resources would be in that location, other barriers to include, and the
benefit you can receive that should be higher than it will cost you.

Firstly, personally, I think that China can be a good location for business in terms of having a
huge population and in fact they are the second most populous country. Having a massive
amount of potential consumers is beneficial for a business. Additionally, there's an expansion of
the middle class in China according to Safeguard Global, resulting in high potential customers as
they tend to be capable of purchasing high quality products or expensive items.

However, despite the benefit of having many customers, we also have to consider the rules and
regulations in China since there are a lot of differences between us and China. According to
Ashley White, China’s government has strict regulations that foreign companies have to follow
when developing and using products in China.

Secondly, as mentioned earlier, there is high potential of consumers but we have to take note of
the customers’ preference in China because they are different from customers’ preferences in my
country as they are more predictable for me since I am also a Filipino.

Thirdly, I know China as one of the suppliers of some of the businesses here in the Philippines
since they are cheaper and profitable but doing a business in China can be different and difficult.
The pricing in China is rising caused by developing new utilities, roadways, and public services.
Furthermore, attracting skilled employees to work for me can be a problem.

Fourthly, since I’m a Filipino who’s considering whether to do business or not in China, the most
visible barrier I recognize is the language and culture. I believe that in business, communication
is one of the keys to be profitable and as of now I can’t speak Mandarin.

Lastly, China is not democratic country. The Chinese government has influence in business.
China tends to prioritize domestic business. Meaning, domestic businesses are more protected
making the foreign businesses to be more at risk. That’s why doing a business in China is riskier
than it would benefit me.

Alethea: Due to the government of China, I will not consider doing business there. It is currently
politically risky to invest there and with the communist government, it is highly expected that
they will be more controlling towards businesses. In communism, the government dictates the
production output of the business. The government also own all the businesses and properties,
they can also take them away from the people if they wanted to.
References:

O’Neill, A. (2024). Countries with the largest population 2024. Statista.

https://www.statista.com/statistics/262879/countries-with-the-largest-population/

White, A. (2023). The 10 Challenges Of Doing Business In China. FDI China.

https://fdichina.com/blog/challenges-of-doing-business-in-china/#:~:text=The%20gove
nment%20challenges%20are%20one,and%20using%20products%20in%20China.

Doing business in China: Advantages and Disadvantages. (2019). Wolters Kluwer.

https://www.wolterskluwer.com/en/expert-insights/doing-business-in-china

Pros and cons of doing business in China. (2023). Safeguard Global.

https://www.safeguardglobal.com/resources/pros-and-cons-doing-business-in-china-2
23/

Batabyal, A. (2020, October 19). China makes it incredibly hard for foreign businesses to operate
but they stay because the money is just too good. The Conversation.
https://theconversation.com/china-makes-it-incredibly-hard-for-foreign-businesses-to-operate-bu
t-they-stay-because-the-money-is-just-too-good-147546

R.Rossington. (2021, August 11). The relationship between democracy and business. CEO

Today.https://www.ceotodaymagazine.com/2021/08/the-relationship-between-democracy

-and-business/

Businesses Under Communist Systems. Course Side-kick.

https://www.coursesidekick.com/business/study-guides/boundless-business/businesses-un

der-communist-systems

Link to the ppt:

https://www.canva.com/design/DAGJa8U8TLM/XxNinR8OVIlwNqp-8NOMsA/edit?utm_conte
nt=DAGJa8U8TLM&utm_campaign=designshare&utm_medium=link2&utm_source=sharebutt
on
Screenshot of Report: