The paper "Reasons Why I Favor Conducting Business in China as Compared to India" is an outstanding example of a business case study. The political and legal systems of a country greatly influence the way in which business runs, and its likelihood to succeed depending on the type of business. Despite the fact that there has been the globalization of business, firms are still governed by the rules of the country in which they operate. Established democracies such as those found in the United States, Japan, Europe and Australia offer high levels of political stability.
However, most Asian countries such as India and China have more authoritarian governments. China, for instance, has a strong government system, but with limited individual rights. China’ s government is the dominant force that controls the country’ s economy. However, more private companies have risen up over the past decade. There are several issues these companies face such as the protection of their privacy, individual and intellectual rights in their attempt to do business with China. The authoritarian government in China favors those who understand how to work with the nuances of this new system.
The Chinese government controls internet sites. This has promoted Baidu, a search engine based in China that filters content viewed and downloaded from the internet. Most emerging markets such as China and India face industrial disputes caused by issues related to the tension that exists between permanent and contract employees, low pay, and non-transparency. These factors lead to the halt of many manufacturing businesses, especially in India. The risk attached to starting up manufacturing businesses in India is evident. When compared, I consider conducting business in China less risky and more beneficial in terms of returns and protection of patent rights.
India is reluctant to offer these patent rights and the issuance of a business license takes a lot of time and money which shouldn’ t have been the case initially. Reasons why I favor conducting Business in China as compared to India China ranks second among the world’ s largest economies. China and India account for 19.2% of the world’ s GDP, with China at 11.5% and India at 7.7 %. They are also close in their high population.
However, India has lagged behind in the reform of its financial sector and banking sectors as well. China opened up to foreign direct investment in the 1980s whereas India did so ten years later or so. More Foreign Direct Investment goes to China as compared to India because more Multinational Corporations have been exposed to the administration system of China and rules governing business. The Political Regime in China and its Effect on Business The political risk in China could present problems to foreign businesspeople in the country. These risks are possible government interferences that can affect the business people adversely.
The possible political risks in China are such as the possibility of nationalization of industries and contract repudiation on contracts made with the government. However, with the many changes in China’ s political structure, these dangers have gradually faded away. When compared to India, China has more promise of conducting business safely and successfully. Over the past three decades, China has evolved towards becoming a capitalist political economy. It, therefore, focuses on the accumulation of capital, market competition and market economic growth. China has also sought to enhance international economic integration.
The political economy of China has increasingly become capitalist in nature. However, this development is still underway and China is yet to be comparable to countries such as the U. S, Japan and Australia. One of the constraints an entrepreneur would be the effect of the Chinese culture on China’ s political economy.
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