There is an abundance of labor in China due to the fact that the country has the highest population in the world. The workers in China are more disciplined than its American counterparts and have higher respect for the job. A major obstacle to doing business in China is that companies must abide by the governmental rules of a communist nation.
Companies that want to expand internationally have to seriously consider expanding to China. Abiding by the governmental rules is a constraint that can be overcome by the abundance of business opportunities for companies operating in China. The business rules of China are not as strict as in the past. Prior to China’s entrance in the World Trade Organization (WTO) in 2001 companies that wanted to penetrate China had to form a 50-50 joint venture with an established Chinese company (Cnn, 2001). Today firms from the United States or other parts of the world can form whole owned subsidiaries in China. I think that the rule that sales in China have to be contingent on a company establishing its operations there is not that bad. Operating a manufacturing center in China is an extremely profitable proposition due to the lower operating costs in comparison with other parts of the world.
Exploiting the Chinese retail market is a very beneficial proposition. In China due to the industrialization movement and economic growth there is a growing middle class that is eager to purchase consumer products in order to increase their quality of living. The massive population of China can help any company increase its sales numbers in a short amount of time. Short term gains are very important to increase the immediate profitability of a company. There are opportunities for market penetration in China in many industries. Overcoming the cultural barrier in China is important towards the success of an enterprise that establishes operations there.