Courtesy of the globalization flows and of the ongoing trade liberalization, in conjunction with sharply declining costs of communication and transportation, there has been a sharp increase in the tradable goods globally over the last fifteen years…
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Simultaneously, a veritable explosion in e-based connectivity since 1995 as well as the emergence of a completely new global Information Technology outsourcing industry has resulted to the networking of service and product providers globally (Heshmati, Sohn, and Kim, 2007:116). Consequently, hastily expanding trade in both goods and services is becoming an increasingly powerful engine in driving the dynamics of growth and development to a global state. This paper will account for the rise and growing role of multinational enterprises form Asia Pacific in the global economy and particularly in Europe. Aims of Chinese multinationals in international business strategies When it comes to global economy, no nation is self-sufficient. Each needs involvement at different levels in trade in order to sell what it produces and acquire what it lacks as well as produce more efficiently in some economic sectors than its trade partners. As conventional economic theory supports, trade promotes economic efficiency through provision of wider variety of commodities, regularly at a lower cost, notably because of specialization, economies of scale, and the related logical advantages (Rudman, 2006:149-151). Documented evidence asserts that, international trade is a subject of contention because it can sometimes be a disruptive economic and social force as it changes the conditions of wealth distribution within a national economy, predominantly due to changes in prices and wages. As of this moment, a small group of developing countries is transforming the global economic landscape. Led by China, Japan, India, and Brazil, these expanding economic powers pose a variety of challenges and opportunities for European economic interests and leadership of the global economy. Chinese hesitant stance suggested the precise nature of global flows and the impacts are still poorly understandable. The rise of Chinese investment in European nations differs from earlier waves of investment from the United States and thereafter from Japan. A huge number of Chinese firms are heading abroad to become globally competitive instead of going to exploit advantages developed at home. With this aspect, according to European policy makers, Chinese investors resemble in behavior Korean multinationals (Feenstra and Wei, 2010:517). While in Africa and in Latin America, many Chinese investments are seeking to secure energy resources, those into Europe or North America are more likely to be in search of market or strategic assets. Direct Chinese investment among European countries is still relatively insignificant. However, over the last past few years, it has and still is showing a clear upward movement. The EU, according to some sources, accounted for merely one percent of Chinese outbound M&A in terms of value between 1999 and 2005. Numerically, he Greenfield investment projects outpace acquisitions despite the fact that many of these tend to be minimal. Greenfield investments wise, although the amount of venture in European projects funded by China increased by 500 per cent since 2000, it commenced from a low base thus remains modest. A report released by the French Agency for International Investments (AFII) pointed out that, Chinese firms accounted for a mere 0.5 per cent of all manufacturing projects and 0.9 per cent in job creation in Europe between 2002 and 2005. The growing role of China in European market accounted for 1.2 per cent of Greenfield investments over the period between 2004 and 2006 (Tang, 2010:5-7). These margins depict Chinese worth within European trading market as it surpassed Korea by creating over 7000 jobs in Europe in period between 20
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It aims not only to make profits that are larger than those of a local company are,but it aims to make its presence felt throughout the country.When a company seeks to satisfy the demand of international consumers for its product,by starting a commercial enterprise in those areas as well,it is known as direct foreign investment.
As an organisation seeking to expand to foreign markets, one has to take into account the vigorous criticisms of commentators on multinationals. These criticisms fall into an alarming number of bands, but particularly the cultural impact of multinationals on developing nations.
The globalizations of the market have resulted in some of the dramatic changes with relation to supply and demand globally. One example of such change is the FDI (Foreign Direct Investment). FDI has increased at a rapid rate even faster than the global GDP.
These multinational companies have grown beyond their domestic corporate markets by establishing new subsidiaries in host countries, and by acquiring companies through mergers and acquisitions the world over. Asian corporations are
It is evidently clear from the discussion that the rise and growing role of multinational enterprises from the Asia Pacific in the global economy can be accounted for in different fronts. Case in point is that these multinational enterprises get support from respective governments to pursue their agenda in the global market.
The fast growth of these firms into international markets can be attributed to cheap labor, as well as low interest rates on loans from their respective governments. In countries such as Japan, South Korea, and Taiwan, innovation has been a major issue of concern for
These investments come in a number of ways. First, the foreign direct investment comes from the West as people from these regions buy shares from firms in Asian Pacific region. As competition has mounted, firms from the West