A Struggle Manifests Itself

"The Best Ways to Set up a Business in China"

http://www.bbc.com/capital/story/20140210-how-to-set-up-shop-in-china

"The Best Ways to Set up a Business in China," is an article dedicated to discovering the mistakes certain companies such as Kraft underwent when attempting to globalize and enter into a new location for their market strategy. Many companies look at China's huge population as a means of making profits. With such a large pool to sell to, dollar signs are in the eyes of all businessman. However, as Kraft, Tesco, Home Depot, and Google saw, it is not that easy to enter into the Chinese markets. This article expands the steps to enter into the "biggest consumer market." It offers a joint venture with a local Chinese company to "get a foot in the door" so to speak. Companies should have their own employees on the ground in the area instead of off-shoring. They should proceed with caution through the difficult Chinese market, corruption, and regulations galore. The Chinese are also very sensitive to taste, therefore, instead of companies trying to sell the products that have worked in the past, they must research the Chinese tastes and adapt their old products to create a new dynamic product specifically for the Chinese market. It is really the governments vs. corporations and which will gain more power as civil society is not a major part of this struggle at the moment.

What the real issue for companies is when globalizing their market plans to involve the Chinese market, is the difference in the capitalistic markets. The world is currently seeing a struggle for power between the western "Free Market Capitalism" and the eastern "State Capitalism." Free market capitalism is driven by the public and involves both political and economic freedom. The government has a reduced role in the economy which cements the individual's role in society. This type of market is considered a "spontaneous order" and is not designed by anyone, but is the result of human actions. The economist who proposed the free-market capitalistic perspective introduced the idea that collectivism breeds tyranny, which is seen in many countries where the government has taken supreme control. Companies have an easier time making a mark in a free-market economy. There is less regulation by the government and they can stress their own ideals, strategies, and product implementation.

State Capitalism, on the other hand, which is what China currently is involved in, seeks political goals first, then profit. The government (state) has more powers to make more decisions about heir economy, which can align with their political goals. For example, China's government required Google to censor what they broadcast on the internet because they restrict information to their public. There is increased government spending, lower taxes, and the government can intervene in what they would like to. The issue is that companies struggle in the State Capitalistic environment because the regulation is so tightly controlled as with China. It is hard to implement their own strategies and goals and they must also adhere to the government regulation and policies.

This issue of companies globalizing their market plans more by entering the Chinese market also contends with the debate of Free Market Capitalism vs. State Capitalism and if one is loosing power in society. Currently, some economists believe the free market capitalistic ideology is failing and state capitalism is taking over. This could also be because many of the BRIC countries and other emerging markets seem to be leaning towards the State Capitalistic ideologies rather then those of the Group of 7. Both have their drawbacks, however currently those with State Capitalistic economies are fairing better following the economic crisis of 2008. Whether state capitalism will take over the long standing success of the free market will need to be seen at a later time.....