International Management

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International Management

International Management


Thierry Davila

Submitted in Partial Fulfilment of the Requirements for the

Degrees of International Master of Business Administration

Date: March 27th, 2005

Course Tutor: Clemens Bechter


I affirm that the attached work is entirely my own except where the words or ideas of other writers are specifically acknowledged through the use of inverted commas and in-text references. This assignment has not been submitted for any other subject at Euro*MBA or any other institution. I have revised, edited, and proofread this paper.

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  1. Do you agree that China is or will be the lowest-cost manufacturing center in the global economy?  

Abandoning its isolationism, China has engaged in the global marketplace, competing with the biggest economic powers. In this battle, workers low wages is giving a strong advantage in terms of cost manufacture to china but other countries such as India are competing in this field especially in the Business Process Outsourcing market. China strengths are mainly based on:

  • Low human resources cost
  • Knowledge pool

These factors linked with an internal market that is representing in some field 20-30% of the world total market is giving further advantages to china in terms of manufacturing.

However since China opening to the new economy is very recent consequently the main weakness of this countries are:

  • Low R&D know how
  • Resistance to the change of a planned economy to a market economy

China managers will also need to adapt their skills from the traditional Chinese way of doing business to the global rules in order to become as efficient as the other global or international companies.

Finally, China main fear is that the central government reforms become a failure due to the social pressure and less growth in some regions of the country. In the event that wages are increasing as Chinese workers request to access to a higher standard of living, then China will loose any possibility to be the lowest-cost manufacturing centre. However it would probably remain the largest manufacturing centre in terms of production capacity.

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  1. What impact does and will China’s entry into the WTO have on the economies of other countries? Give some specific examples.

The accession of China and Taiwan to the WTO will have a significant impact on the Greater China economies and many others. Some countries will be winning a lot while other will be loosing, as a WTO member, China's exports and imports would grow at higher rates than if it were not a member.

The entry of China direct consequence is the entry of Taiwan and Hong Kong into the WTO; their economies will be affected in ...

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