Lego in China

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3. ECONOMIC
China has several factors that contribute in strengthening their economic position. One of the contributors is their government policy. ‘Chinese government has stressed the importance of develop IT sector to the whole economic development of the country, with considerable commitments to massive investments in infrastructure positive effects of IT on its economic development’ stated by (Li, n.d.). With more advanced IT departments, China is able to attract more investments from foreigners. Not only that, China also created flexible investors policies. With developed IT structure and a supporting policy, Lego will have no trouble penetrating China’s market. China was known as the most populated place on Earth, hence creating a high demand for products available in market. This will keep the market activity going, given that there is enough supply for everyone. Hoshiko (2011) demonstrated that ‘Cheap labor rates are the keystone to the Chinese economic boom’. With a population above 1.2 billion, labor isn’t one of their main concerns. With low cost of labor, production cost will also drop, this enable them to produce inexpensive goods. If Lego decided to enter China’s market, they will also gain this advantage; they’ll be able to produce their products at a lower cost. Bradsher (2012) has written that ‘China’s exports to all countries rose 9.9 percent in September from a year earlier, led by especially strong exports to Southeast Asia’. All of these factors in the end helps China’s economic activity, and making it more appealing for investors to come in and plant their money inside of China. ‘The government said Tuesday that it planned to nurture as many as 50 state-owned enterprises to become globally competitive companies while maintaining control of companies engaged in key industries’ (Anon., 2006). We can see what the government is doing here, they are trying to nurture their companies to complete globally, and giving less concern in internal...
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