Strategies to Entry China Manufacturing Market

The main reason for choosing this strategy is to minimize the cultural, economical and political difficulties and risks in the China market: In this unique market, the company needs a local partner who knows the culture and custom well so as to manage the labor force smoothly, and to prevent cultural conflicts. Also as "Guanxi" played an extremely important role in doing business in China, a local partner can provide a good net work, and overcome the formidable bureaucracy in getting things done quickly and effectively. On top of that, joint venture with a local firm can help the company can take advantage of a loosening of restrictions from the China government and gain access to China's domestic market while maintaining control over their activities; make use of the well educated, cheap labors in China for the production so as to lower its cost. Other advantages include: "improving access to local resources, favorable treatment from the Chinese government (i.e. with respect to tax exemption, obtaining financing, securing direct and indirect support) and greater ease in overcoming difficulties with foreign exchange controls." (Gross, 1995) Joint venture will allow the company to avoid tariff and quota issue, to gain more focus and control of product distribution and service in China and hence probably ensure penetration of a larger share of the Chinese marketplace. …