China’s Market Size

China’s attractive market size and the economic advantages of opening
factories there raise a host of controversial issues. Without even touching
upon human rights issues, it is easy to see the problems inherent in
China’s demands that multi-national corporations transfer modern management
skills and technology. Ideally, the relationship would be reciprocal: if
companies choose to locate production facilities in China then they should
be willing to share valuable information such as technological and
managerial expertise. However, doing business in or with China is more
complicated and tricky than this. Boeing and other companies would indeed
risk losing sales if they transferred technology and/or managerial
knowledge. Chinese companies that capitalize on this knowledge and
technology would create an incredibly competitive market that would drive
prices down and would also probably lower standards of quality. The
repercussions for the environment as well as for human rights could be
potentially devastating, as Chinese companies could operate with fewer
restrictions and regulations in these areas. Because production costs would
be potentially much lower for Chinese companies than for multi-nationals,
it would be nearly impossible to compete with Chinese companies on the
However, it is possible to strike a balance. If Chinese companies
glean knowledge from the multi-nationals that locate there, such as
Volkswagen, Isuzu, and Boeing, then perhaps import taxes could be levied on
Chinese goods; that would at least ensure a fairer market. Transferring
technology could benefit industries that might benefit from further
innovativeness; if Chinese companies are taught the fundamentals of an
industry it is likely that the industry as a whole could benefit from added
Because the bottom line is the most important thing for such
corporations, however, the most likely outcome of

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