Investments in China

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1. Discussion of Findings
1.1 Advantages and Opportunites
There are many advantages of investing in China, one of them being that there are not many trade barriers within China’s economy. The reason for this is that China wants more businesses investing in their rapidly growing economy. As China currently have Free Trade Agreements with countries such as New Zealand, Australia and the United States, thus allowing easier and efficient exports and imports to and from China on a global scale. Free trade is the unhindered flow products and services between the countries that have no tariffs, duties, or any other trade restrictions imposed by government. (ADVFN, 2011). Another reason why investing with China is an opportunistic move for a potential investor is that China allows the foreign business to be fully owned by the foreign investor which is a very good sign. Another advantage of investing in China is that they have much cheaper and more affordable real estate cost and abundance of labour. For a New Zealand investor/exporter this results cheaper cost for operations and ultimately the main reason any investor invests overseas, to make a profit. Also Chia exports and imports many good and services in and out of China making them cheaper than most parts of the world. China also offers a variety of goods and services, capital and expertise which would be of benefit to any business and since being the most populated country in the world to date have an abundance of labour to offer, giving New Zealand investors much more to bargain with due to China’s markets.

1.2 Dangers and Disadvantages
A danger to a potential exporter (investor) which also counts as a disadvantage for business within China is how corrupt the economy of China actually is. China is one of the many countries in the world with a high level of corruption in China as clearly shown on the Corruption Perception Index 2011 (refer to appendix 1.1a) with a colour scale varying from yellow to red,...