What Does The Chinese Economy resemble With Its Relationship With International Business?

In an economy like the one we currently have, it makes sense for businesses to adapt. The same can be said for individuals who are considering starting their own business. In the face of economic uncertainty, millions of home-based business owners across the nation faced a similar predicament as the recent recession closed down many of the U.S. economy’s biggest engines and consumers remained home to maintain the spread of this virus. To survive, entrepreneurs adjusted on the fly, and devised creative new ways to alter their working models.

Today, there are more home-based entrepreneurs than ever, and many are experiencing unprecedented levels of success. Still others are struggling with their own entrepreneurial ventures in their respective industries. Still others, despite their best plans, are finding themselves mired in cultural isolation that keeps them from implementing the best marketing strategies into their home-based international business ventures. While culture is certainly a large part of owning a home-based business, entrepreneurs need to appreciate that culture can be both a springboard to success and a stumbling block to avoid total collapse.

As a matter of fact, some international business owners find themselves fighting a losing battle against online competitors who see huge profits through clever online strategies. For instance, in a recent spat between two popular Chinese Internet companies, one Chinese company threatened to take over a popular offshore Internet company because it was not adequately adept at handling Chinese-based clients. The Chinese firm, a subsidiary of a large state owned firm, decided to do a series of online marketing maneuvers that effectively dominated most of the online gambling and shopping industries in China. When this transpired, the Chinese government quickly stepped in and issued a series of directives that all but threatened to cut off the company out of its nationalized financial association with the Chinese mainland. Such censorship can be a significant problem and should be considered by all international businesses considering expanding into China or doing business in the Chinese market.

Another factor that complicates the business of doing business in China is that the Chinese tend to use a comparative advantage approach when doing business internationally. In other words, they tend to view things not in terms of local advantages, but rather in terms of how it would benefit their domestic businesses to do business with another country. For example, they may view foreign trade as something that would make their products cheaper, because it would allow them to service larger numbers of customers. It is often viewed as a zero sum game, wherein the gains of one transaction are nullified by the loss of another transaction.

China’s comparative advantage also helps it gain a distinct competitive advantage, because it has the ability to exploit various markets on different continents. At the same time, many foreign businesses are feeling the pinch in China due to the slowing economy. Many foreign businesses have reduced their staff levels in response to the slowing economy. These factors combine to reduce China’s attractiveness as a destination for international businesses.

One reason that makes China less attractive than an international business location is its own cultural environment. The Chinese people are competitive, and as such they are not interested in being pushed around. This, in turn, can create tension between the Chinese government and foreign corporations. Because of the Chinese cultural environment, some international businesses are forced to choose between having a good employee base or keeping decent employees. Because of this tension, the Chinese people are not willing to alienate their fellow citizens over a business concern.

When Chinese officials talk about the economy, they do tend to use the language of commerce, and the language of competition. However, if business were to be simply about creating jobs, then the growth rate would likely be much lower than it currently is. Instead, the Chinese government must ensure that the growth rate is above the average of other economically developed countries. If it is not, the Chinese government will find itself economically vulnerable.

As the United States looks toward China, the Chinese government continues to upgrade its economy. However, because China is still developing, there are many unknowns. The best way to know what the future holds for China is to look at the past. Over the last 20 years, China has quickly improved its economy, and it is well on its way to achieving the economic success of other countries like India and Brazil. In fact, over the last decade, the Chinese economy has out-scored its American counterpart, and that trend looks to continue in the future.

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