Business challenge faced by MNCs in China.pdf

International Journal of Business and Management December, 2008 169 An Analysis of Business Challenges Faced by Foreign Multinationals Operating the Chinese Market Jianlian Wu International Management, University of Nottingham Ningbo 315100, China E-Mail: zlixcwj1@, qqnamei@163.com Abstract China’s rapid economic growth has presented numerous opportunities and challenges for foreign firms there. Many large corporations have established a China centre to coordinate and control their operations in the country. As firms have increased their presence in China, their concerns are increasingly focused on implementing successful management practices and strategies. This article describes the challenges and difficulties that multinational companies faced in Chinese market. It analyses roles played by the human resource function in these China, culture differences, social environment and other factors. Keywords: Challenge, Multinationals, Chinese market 1. Introduction Over the last few decades, the process of globalization has created unprecedented opportunities for global business investment and trade. Many multinational companies are attempting to expand their business international by many entry strategies such as joint venture and subsidiary. While China, with over 1.3 billion population and 9.6 million square kilometers (China Popin, 2008) has become a valuable land for foreign multinational companies. They try to enter the Chinese market by using many different strategies. For example, Siemens set up its representative office in Beijing in 1982 (Fryxell, Butler, and Choi 2004); Coca Cola operated a wholly foreign-owned enterprise that produced beverage concentrate in Shanghai and is direct joint-venture partner in a similar facility in Tianjin (Weisert, 2001). Furthermore, China’s successfully accessed World Trade Organization (WTO) in 2001 had provided numerous opportunities for foreign companies; the i