China - a General Analysis

Page 1 of 51

China - a General Analysis

By | Jan. 2013
Page 1 of 51

by John Child

Oxford University Press

1. China’s Growing Role in International Business4
1.1 Trade5
1.2 Inward Foreign Direct Investment (FDI)6
1.3 Motives and Entry Mode8
1.4 Outward FDI11
2. China As An Environment For International Business13
2.1 Market Access14
2.2 Growing Competition16
2.3 Institutional Environment18
2.4 Forms of Business20
3 Implications For International Business Analysis21
3.1 The Role of National Institutions21
3.2 A Formal Analysis of China's Environmental Complexity523
3.3 Strategies for Handling Environmental Complexity25
3.4 Internationalization of Chinese Firms27
3.4.1 The Latecomer Perspective27
3.4.2 Institutional Analysis and the Role of Government28
3.4.3 Entrepreneurs and Institutions29
3.4.4 The Liability of Foreignness30
3.4.5 Modes of Engagement between Chinese and International Firms30

THIS article discusses China's growing role in international business. It begins by describing developments in the country's inward and outward foreign direct investment [FDI] and the forms adopted for such investment. China is both a host environment and active player in the international economy which has become both hugely significant, and which poses new challenges for international business analysis. We continue by considering the kind of environment that China presents for international business, one in which the state continues to be closely involved. In the last section of the chapter, we turn to the implications China has for international business analysis, concerning the role of national institutions, the strategies available to foreign investing firms for coping with environmental complexity, and issues posed by its patterns of outward FDI.

1. China’s Growing Role in International Business
China requires special consideration for a number of reasons. With...