1. What kinds of advantages can Chinese companies obtain if they move production into the United States? There are several advantages Chinese companies obtain by moving their production to the United States. For starters, they would be able to sell to companies that only purchase American made products. Also, the money earn from the U.S. base production generates profit for China; which allows the companies to help its country economy by expanding its business in both countries and providing jobs for the unemployed. Lastly, the companies would receive a huge tax-credit and save significantly on shipping.
2. What are some possible disadvantages and threats of moving production to the United States? Some American is not open to the fact that international companies are moving their production on United States’ soil. In fact, U.S. citizens are willing to boycott and financially hurt the companies if such a move was to happen; especially in an economy where American own businesses are failing.
3. Will more Chinese companies make investments in the United States as opposed to China and the future? Fully explain and justify your choice. I believe that there will be an increase in Chinese companies making investments in the United States. For starters, it will help the companies’ international business relationship. To add, there are several stimulus packages the companies would qualify for (such as the economic tax credit) by doing business in America. Also, their profit would increase. The U.S. dollar is more than Yens. So, they would be making twice as much money in the U.S. on the same product sold in China at a cheaper rate. And, the cost to ship would decrease, because the companies would not have to pay duties on products being shipped within the United States. Therefore, it is beneficial for Chinese companies’ to invest in the U.S.
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