China Investments. What makes china an attractive location for inward Essay

China Investments. What makes china an attractive location for inward direct investment by multinational enterprises - Essay Example 2007, p. 400). With this in mind, this has provided capital for the companies to expand even further as there is a steady flow of funds, and the only direction of the company is forward. This is evidenced by the lack of good performance by Chinese companies that are enlisted in the local stock market, whereas those that go to foreign markets have a better performance (Liao 1998). This is to mean that the availability of capital to invest in China is part of its main reasons that it is attractive to foreign investors as their investments can be guaranteed to have returns. In addition, there is plenty of capital in China, but without vehicles to see that the capital is used in constructive projects, there are increased investments as the capital resources are more than the investments available. This is to mean that the country is strategically placed to receive direct investment by multinational firms that want to benefit from the funds available, as well as the resources found there. With little investments going on, there are plenty of opportunities and funds that are unexplored, creating the need for foreign investors to come in and create partnerships with the existing firms and capital holders in order to drive the economy forward, as well as have the funds released as part of a joint venture. Competitiveness Competition in China is a major contributor of the attractiveness of the Chinese business appeal in that the industries and businesses found in China thrive based on tight competition. This is so because of the dynamics of technological innovations that keep investors and businesses on their toes. As such, each investment needs to keep growing lest it is phased out due to being conservative and sticking to conventional means of handling business. The attractive aspect, therefore, lies in the competition, where different firms working in the same sector compete against each other to stay afloat, which are a healthy form of competition to keep the econom y of the country running (Tung-lung & Weichun 2011, p. 153). In addition, the contribution of competition in the business environment of China for investors is brought about by foreign direct investment. This is done through new investment that uses the above strategic information to ensure that the available capital is put to good use. As such, new businesses compete against older ones as the new ones have an edge owing to technological innovations, while the older ones have an edge based on their experience. This is the perfect environment for any business that wants to grow from scratch and make a name for itself as they all need to evolve and adapt to new requirements and technologies, which makes China a dynamic economy and which is an attractive feature for multinationals seeking to establish new investments. Apart from this, there are numerous malpractices in China that act as a magnet for foreign investors and multinationals to set up their businesses. This is because there are illegal practices in China that are only practiced in that country and not anywhere else, which makes the country more competitive than the rest in the global economy. The country has an intricate web of illegal subsidies that range from land, capital and utilities to tax breaks that other countries cannot compete with. This makes the country very appealing in terms of its practices that see investors flock into the country. Competition goes again as far as innovative measures to overcome foreign competition, where there are incentives such as those that see the American market receive more goods from China than those that go into China from the United States. This is an attempt to see to it that competitors in America