Investing in China - challenges

  China is a tremendous market with enormous population and low labor cost, which attracts a vast of foreign investors and entrepreneurs exploiting business opportunities. After China admitted to the World Trade Organization (WTO) in 2001, the WTO membership intensified Chinese power in the world economy, not only provided a more secure platform for China to access the international export markets, but also enhance the foreign direct investment. Refer to figure 1.1, it shows a significant growth of foreign direct investment between 1979 and 2000.  1.1
Source: Taube & Ögütçü , 2002 (citied by National Bureau of Statistics 1979-2000)
  In the past few decades, China experienced a dramatic economic growth, being the most important market and the largest world factory. According to Birgit (2004), since the economic and political reform in 1978, the GDP was increased by 9% on average annually between 1978 and 2000. It was an unprecedented figure over this period. The graph 1.2 as below indicates the GDP growth was rising steadily from 2003 to 2007, but there are receding slightly in 2008.
Source: Trading Economics Asset Management (2008)
  Nevertheless, Birgit (2004) states that the giant economic market and the considerable boom of China bring it a crucial emerging market for international business. However invest China to the overseas investors is challenging due to the complicated economic regulations and political factors. According to Chee & West (2004) provides a concept that China has a special business environment and a complex bureaucracy. Under the traditional socialistic institution, Chinese government still acts as the leading role in Chinese economy. Hence, “the rigid region regulation, sector ...
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