Doing business in emerging economies - Essay Example

sized manufacturing and supply company, catering for target markets within the United Kingdom’s population of approximately 59 million people (UK Census, 2001). The products ranges of perfumes and cosmetics are aimed at the medium to higher earning bracket of males and females. The executive management has been following world trends of local companies entering emerging markets, and the above average returns some of these companies have shown in a relatively short time has spur them to look at the possibility of going global with Madam Cosmetic’s.

After a lot of collaboration it was decided to evaluate the opportunity and risks of investing in China. This instigating factors for this decision was the market-reforms that was implemented in China which resulted in the largest reduction of poverty and one of the fastest increases in income levels ever seen. China toady is the sixth-largest and fastest growing economy in the world. In 2004, its $1,65 trillion economy was about one-seventh that of the U.S. China’s rapidly expanding economy and 1,3 billion population for business, and most global companies, are either already involved in the Chinese market or have plans to do so soon (Julian Chen. 2005). China is currently one of the fastest growing economies in the world, driven by excessive government spending and a huge influx of money through the investment of Major International Companies.

It is advocated as the country which presents a golden opportunity for businesses to expand and increase their profits. To proof this fact we need to look at the Macroeconomic indicators. According to the Asian Development Bank, China has grown at an average rate of 7.6% over the last five years. This growth was mostly in the private sector and has forced market fundamentals to change to address gaps and inefficiencies of state-owned enterprises. China’s low vulnerability to external shock has helped it to maintain macroeconomic stability despite structural