International business has grown so rapidly in the past decades because of strategic imperatives and environmental changes. Along with the growth of international business, some more issues have been becoming very phenomenal in relation to ways of doing international business as well as aspects of redefining global competition. In this essay, will cite some articles to interpret the phenomenon related to international business, such as Foreign Direct Investment (FDI) and Anti-dumping issue which are mostly associated with events of international business in China.
2. Topic 1: Foreign Direct Investment (FDI)
Trade is the most of obvious form of international business but not the only form. Another major form is international investment, whereby residents of one country supply capital to a second country. 1 Regarding international investment, on of form is defined as Foreign Direct Investment, on which it could be firstly cited two articles then make in-depth analysis associated with academic referencing for that. 2.1 Relevant Articles Summary:
2.1.1 Article one: ‘Bank praises nation for FDI success’ A World Bank report on China’s foreign direct investment (FDI) policy praised the country for its success in attracting foreign capital and suggests it further encourage FDI inflows. China has attracted about one-quarter of FDI flowing into developing countries in the past decade. The World Bank attributed China’s success in attracting FDI to its improved investment climate and competitive employment costs, as well as its rapidly expanding domestic market in recent years. From 2006 to 2010, China is expected to receive 30 percent of the projected $250 billion FDI inflow to developing countries, the World Bank estimated. The report suggested that China simplify investment approval procedures, which it said are complicated, and help foreign companies raise funds within China. (for full article, see appendix 1) 2.1.2 Article two: ‘China’s FDI in Africa on the rise’ Africa is growing into an important destination for China’s foreign direct investment (FDI). Still behind investment in other economies within Asia, Latin America and the Caribbean, China’s FDI in Africa is on the increase. A report on Asian FDI in Africa jointly released by two UN organizations said that China can be expected to become one of the continent’s largest FDI sources in the not too distant future. China is Africa’s third largest trade partner, following the United States and France. The fact that this past year China invested $50 billion in 48 African countries speaks volumes about the growing trade relations. The reason is the complementary nature of China and African countries’ economic development. (for full article, see appendix 2) 2.2 Related Analysis in respect of Foreign Direct Investment 2.2.1 What is Foreign direct investment (FDI)
Foreign direct investment (FDI) is defined as a long-term investment by a foreign direct investor in an enterprise resident in an economy other than that in which the foreign direct investor is based. The FDI relationship, consists of a parent enterprise and a foreign affiliate which together form a transnational corporation (TNC). In order to qualify as FDI the investment must afford the parent enterprise control over its foreign affiliate. The United Nations defines control in this case as owning 10 percent or more of the ordinary shares or voting power of an incorporated firm or its equivalent for an unincorporated firm. 2 FDI may take many forms, including the purchase of existing assets in a foreign country, new investment in property, plant and equipment, and participation in a joint venture with a local partner. Perhaps the historically significant FDI in the United States was the ＄24 that Dutch explorer Peter Minuet paid local Native Americans for Manhattan Island. The result: New York City, one of the world’s...