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International Business in China - Assignment Example

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This paper “International Business in China” is a recommendation to a small start-up business company on where to locate if it wants to make a name in a foreign market. Three countries have been selected as viable and lucrative business locations—China, India, and the Philippines…
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International Business in China
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This new economic system has paved the way for progress. Currently, China is the sixth-largest economy in the world recording the highest growth in real Gross Domestic Product (GDP) at 9.5% during 2004. China's GDP was recorded at US$1.96 trillion during the same year which is equivalent to 1/7 of the United States' economy. China is now known to be the "new economic giant" (Gulob, 2003). A small business trying to break into the foreign market can well establish its operation in China. As one of the recently emerging and developing an economy, China poses various business opportunities.

Simultaneous with the rise in its GDP is the increase in the countries' per capita GDP. This, in turn, indicates a higher income for individuals and more money to spend. A small business entity can take advantage of this rise in income by offering the Chinese market new and innovative products. Another reason why China is considered is its relatively lower wage rate. On average, a Chinese gets $0.40 a day (Hennock 2002). This vast pool of cheap workers can be utilized to the advantage of a small entity as it does not have a large resource to cover the high amount of expenses.

This implies a huge cost saving for entrepreneurs to invest in other capital needed in their operations.Philippines The Philippines is one of the world's developing economies in Southeast Asia. Economically, the performance of the country is not impressive due to the constant devaluation of its currency and economic unrest due to political issues (Philippines 2005). However, this country is a promising destination for a start-up business entity. Foreign investments are highly encouraged in the Philippines.

In fact, the Bureau of Investments offers numerous incentives such as: income tax holidays; exemption from taxes and duties on imported spare parts; exemption from wharfage dues and export tax, duty, impost and fees; tax exemptions on breed and genetic materials; tax credits; and additional deductions from taxable income to foreign investors (Fiscal Incentives 2005). Another advantage of doing business in the Philippines is its cheap pool of skilled workers. The average wage rate in the country is $3-$6 a day (Manpower Costs 2005).

However, the country boasts of its over a million secondary school graduates and 350,000 college graduates annually.The Philippine market is also distinct for its highly Westernized way of living. A large factor that contributed to this is the long period of colonization under the United States. Filipinos are known to have colonial mentality and are very "Americanized." This has a good implication for a small firm as this indicates a large acceptance and preference for foreign products.India India lags behind the economic giants Japan and China in the Asian continent.

India is one of the world's largest markets in the world with a population of 1.1 billion. The country continues its economic development following the market-oriented reforms in 1991.

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