Chinese Market and Asian and African Countries - Essay Example

Foreign companies feel insecure in Chinese government expectations because they will be forced to bargain away business secrets and intelligence in exchange for sales which may not be wise in the long term. The question this paper seeks to answer is whether foreign companies in china should risk the loss of sales by refusing to transfer knowledge or just go along with the Chinese government's terms and conditions.

These global companies should flatly refuse to move production to China considering that it is a communist country and the risks involved. It is very unfair for the Chinese government to subject these global companies to rules such as for them to make sales in china; they have to relocate production in China because they have not lacked the resources back in their countries. Chinese companies want to learn modern management skills and acquire technology from these non-Chinese companies. This is taking advantage of these non-Chinese companies just because China offers an attractive market in terms of size and growth rate.

Global companies should instead try to penetrate the Chinese market in another dimension. Aggressive marketing can overcome this bottleneck that China presents to global companies. (Krott & Williamsson , 2003). The shift in production to China benefits China more because it creates employment for its people and at the same time they acquire vital skills, especially in technology. This is a great danger to the mother companies because there is the risk of rival companies acquiring this technology.

 At the same time, you cannot ignore the lucrative market that China is offering. Moreover, the manpower in China is so cheap, thus saving global companies a lot of money in production and operation costs. (Krott & Williamsson , 2003) The fact that there is a ready market for these companies in China is quite irresistible. Additionally, China can be a central distributing point for the rest of Asia and also African products.

When this global companies partner with China even under such unsavory conditions they have a lot to gain in terms of production and operation costs. This is because china has a very high population and thus available cheap labor. China is also advancing in technology at a high rate. This is so because the products that are being manufactured by genuine Chinese companies are of good quality and very technologically advanced. Arguably and perhaps admittedly, China is catching up with technology. With these considerations, even non-Chinese companies can gain a lot technologically from China. These global companies can also merge resources and research more on the products to enhance their quality.

Conclusion.

The world is becoming a global market and the transfer of technology is inevitable. This shift in production to third-world countries like Africa and Asia is a trend that has come up in recent times. Therefore it is just a matter of time before even bigger global companies shift their production in these Asian and African countries without any conditions attached to it. This is because what they will gain far outweighs the losses.