Managerial Economic Concepts and Socio-Political Tools - Essay Example

Managerial economic concepts and socio-political tools need to be taken into consideration.

From the video Can the U.S. Maximize the Benefits of Chinese Foreign Direct Investment? Chinese companies' operation in the United States has proved to be economically beneficial to the locals and the national economic performance at large. The firms like to offer employment opportunities to United States citizens and this has helped reduce the unemployment rate with a significant boost in the overall national income level (Moran,2013). The comparative wage rate between China and the United States indicates a significant gap with the latter having higher rates and more skilled personnel. It is therefore economically feasible for the United States to allow Chinese firms to operate locally and offer a minimum wage rate. This reflects outsourcing of jobs that have seen states like South Carolina boast higher employment levels. It is also important to note that the United States does not experience exploitation as most of the Chinese firms outsource other factor input from other countries with value creation activity as the central activity in the United States.

The socio-political framework of the United States is strongly hinged on the American way of doing things including workplace practices and that has placed them at a vantage point. Take the case of Haier who was compelled to hire an American executive manager to effect America-style human resource practices. This means that the United States has a substantial participation in the Chinese foreign direct investment entities hence increasing the gain to the local economy. United States firms have a competitive edge against other multinationals of foreign origin and for China to penetrate and establish its production plants, there is an increased level of productivity and revival of dead industries. The case study of Top-Eastern Group which specializes in making drill bits gives a picture of gains made so far by local industries and the reabsorption of previously laid-off workers. Since global consumer behavior shows a trend of greater preference for made-in-United States products, export of the Chinese-owned, American-made products boost the competitive rating of United States products (Moran,2013). The political foreign relations between communist China and the capitalist United States stand a better chance of improving with significant bilateral trade agreements. This has been evident in the hospitable and courteous welcome of Chinese firms by North Carolina people and increased cooperation between the two nationalities.

Foreign direct investment by China to the United States has helped in reducing the loss of skilled personnel to other nations as they get acceptable wages. Since the United States and China do not have military cooperation, high local participation helps in keeping this gap hence sustaining the political and economic interaction between the two states (Moran, 2013). This has been boosted by the United States' patriotic observance and portrayal of their allegiance to the national flag that must always fly high even in foreign-owned firms. Improved regulations like reduced taxes and friendly foreign policies are likely to open more job opportunities to United States citizens from offshoring and outsourcing brought in by increased Chinese firms' investment.