ANALYZING THE IMPACT OF NATIONAL VARIETIES ON THE BUSINESS APPROACHES OF GLOBAL CORPORATIONS IN CHINA.

Abstract

Since the late 1970s, when China opened its economy and invited foreign direct investment, and when global companies such as Volkswagen, Coca-Cola, and 3M started investigating the market, there has been a significant shift in the way that multinational firms are seen in China. When more multinational corporations (MNCs) like Motorola, Philips, and NEC arrived in the 1980s, they were welcomed with open arms. The corporate tax rates that they paid were half of what the local firms were required to pay, and they did not have to pay any customs on the capital items that they imported. In general, they were held in high regard by both the government and the general public. As China and its people continued to gain a deeper knowledge of multinational corporations (MNCs) well into the 1990s, the foreign enterprises continued to be the objects of wonder and adoration. At that time, Chinese consumers demonstrated a predilection for the goods and services offered by multinational corporations (MNCs) that was practically unwavering. MNC initiatives are now subjected to a far higher level of scrutiny to see whether or not they align with national interests. In addition, multinational corporations are increasingly receiving local treatment. In support of this assertion is the impending equalisation of the corporation tax rates between domestic and international businesses, which is scheduled to take effect beginning on January 1, 2008. It is increasingly the case that multinational corporations are subjected to the same standards, if not harsher standards, than their local counterparts in areas such as employment standards and environmental standards. They are also discovering that those standards are being implemented in a somewhat more stringent manner.