China, India, and Multinational Enterprises

Relevance According to the global economic outlook of the International Monetary Fund (IMF), advanced countries with deficits need to compensate for the decline in domestic demand by increasing international exports. Emerging markets such as China and India are offset by shifting from international markets to domestic markets in their own countries. The International Monetary Fund also forecasts that China will outpace the US economy by 2015 and India is expected to be comparable to the US economy by 2020 (International Monetary Fund (IMF), 2011).

Due to the globalization of the world economy and the liberalization of developing Asian countries such as India and China, it has become less difficult for multinational companies than it was a few years ago. Such entry by multinational telecommunications companies in third world countries and developing countries has been found to be beneficial for both foreign companies and domestic telecommunications markets. These multinational corporations are entrances to new technologies that enhance the use of telecommunications by making life more comfortable and relaxing. Each market is different from telecommunications field, technology, society and culture in economics, politics, law, institution, government regulation and policy. For countries like India, which is almost the same as Europe, almost all areas of life are very different. There is a big gap between wealthy people and poor people, educated and uneducated, and urban and rural areas.

Compared with China, India is known for its heterogeneity, which differs in culture, religion and language. Although this may be a problem for multinational companies, we currently live in a world where companies are increasingly adapting to the local environment, so in order to succeed in the Indian market it is It is necessary to adapt. Nonetheless, despite being focused on local culture, many Indians speak fluent English, unlike many Chinese companies that often have language barriers. The Indian market is certainly a great advantage for companies trying to overcome heterogeneity related problems. Especially India can provide niche markets for international investors. In addition to experienced technicians, there are also democratic political systems and Western style financial systems in India.

As an emerging market, China has attracted more and more foreign investment from multinationals in the past few decades. China is an ideal place for international investors as it provides cheap labor, abundant natural resources, huge potential market, and a stable political and economic environment. More importantly, the rapid development of China's economy has dramatically increased the number of Chinese customers who strongly desire world-famous luxury goods in recent years. Therefore, the coach recommends establishing factories and retail stores in China to reduce operational costs and to respond to the growing needs of Chinese customers.