Corporate Expansion Into China
...the global market arena inherently focused upon sustaining responsible development, we do not recommend expansion into China at this time.
China has made impressive, significant strides since reform in 1978 as markets have been introduced, government duties have been somewhat decentralized, and per capita incomes, as well as foreign trade have risen. These reforms have emerged China as a global economic presence; and, contributed to China’s mind-boggling economic statistics which include:
• 10.7% economic growth rate in 2006
• 1.5% core inflation rate for 2006
• Four consecutive years of double digit growth rates
• Ten percent average economic growth rate for the last 20 years
These astounding figures have catapulted China into the world’s fourth largest economy and third largest trading nation. The recent economic success in China has lifted approximately 200 million people out of poverty; and, greatly improved the quality of life for individuals within the region.
However, the economic success within China is tempered with substantial social and environmental costs and continuous challenges that threaten sustainable development within China, as well as the region. An ever-increasing income inequality gap continues to develop among the rich and poor as China’s richest 20% control approximately 55% of the country’s wealth. Environmental sustainability issues potentially jeopardize China’s continued economic growth, as China has become the world’s second largest emitter of greenhouse gases; and, China faces numerous other concerns such as acid rain and the depletion of water, as well as other natural resource supplies.
However, with that said, the determining factor that prohibits endorsing expansion into China is the incomplete and unbalanced nature of China’s governance reforms, as well as China’s inconsistent application of the reforms....
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