Business

Investing in another country is becoming a very important consideration for organizations all around the world. This is because with the age of globalization here with catching up with every investor, it has become imperative that each one makes good use of it. This paper discusses the investment opportunities available for General Motors in the Chinese market, particularly as far as the market is concerned. It considers critical aspects such as the Chinese political climate, the legal system, and the probability that it will indeed be a better destination for American cars. It also discusses the role of government in the entire business process, and on this basis draws conclusions as to the viability of China as a market for cars made by GM.

International trade has become a very critical aspect in the overall economic performance of the world today. The fact that globalization is having its toll on businesses and countries around the world has served to increase the importance of international trade. In the modern world, therefore, it is in the best interests of any investor to consider outsourcing production to overseas markets or to shift business elsewhere where factors ideal for business growth and profitability can be easily accessed. With the global economic crisis still biting at home, it is important that more firms seek investment opportunities abroad (Wild, 2006a, p52). One such company that can make use of foreign investment potential available in China is General Motors.

General Motors Overview
GM has been greatly affected by the economic crisis, having to seek government funds in order to be bailed out of eminent collapse. As a result, the company has not yet managed to return to the level of profitability it needs. With the government owning a majority share in this Detroit-based auto giant, it is critically important that it seeks for alternative markets and new models of cars in order to reinvent itself as a leading auto maker in the world. The company faces stiff competition from local neighbors Chrysler and Ford, as well as the Japanese and world leading manufacturer Toyota. GM therefore needs to go beyond US borders in order to get back to profitability. China is an emerging economy and a country which offers a lot of potential for the future as far as motor vehicle investments are concerned. While direct foreign investment (FDI) might still be highly restricted, outsourcing production to the country is worthwhile (OECD, 2002, p111).

Political and Legal Systems
China is a rather closed-up nation with a Communist government which still closely monitors the flow of people, investment, and information (Wild, 2006c, p87). There is no real chance of getting permission to do business owing to these increased restrictions. But once one secures a deal with the Chinese Communist government, one gets access to all one desires in life. Legally, the government of China has been doing a lot to ensure it takes part in the global affairs, and has been lifting some of the unnecessary restrictions lately (Wild, 2006c, p89). It has been slowly embracing globalization as a new trend, upon realizing that it could not survive without trading with other nations. The Chinese government adheres to strict Communist ideals and capitalism is never a practice there. However, the country has continued to seek global cooperation as its own goods have been in need of other markets abroad. There are no elections in China but the ruling Communist Party has been the only party for so long. Only its leaders get elected (Wild, 2006c, p86).

Absence of Free Market Systems
The economic system of China is one that is determined by government measures and controls. Almost no business venture or investment is without government control. Although in the recent times the economy has shifted significantly towards a hybrid one, moderately free but with a lot of government interference, the opportunity for business investment for General Motors rests in the fact that local business do not get as much control as the foreign ones, and as such, the firm can outsource part of its productions to a Chinese-based firm in order to have operations going on without any undue interference from the state (Wild, 2006b, p7).

The legal system in China is rather discriminative, favoring investors from Communist countries or those countries which have opened up their territory for Chinese goods (Wild, 2006c, p86). It is a give-and-take kind of approach. However, given that the US has allowed China to invest in many areas, China will be willing to welcome GM to invest in the country. This is also because the country is in dire need of investors in its motor industry as demand for cars soars with the growth of the countrys economy (OECD, 2002, p112).

The Future Potential of China
In spite of the seemingly unfavorable conditions, China still offers the greatest potential for GMs future investment. It is an economy that is rapidly growing, and the sale of motor vehicles in the country has been surging recently. The key here is political agreement and mutual friendship (OECD, 2002, p111).

Conclusion
The fact that China is a rapidly growing economy is fact enough to be considered as a future market for GM. This is in spite of the legal and political conditions that otherwise make the country a rather unwelcome destination. Looking to the future and not the past or the present, it is easy to notice that China will become the one single nation that will make or break the economy of the world owing to its emerging economic supremacy and the fact that it is slowly opening up to foreign investments. The motor industry in the country is still not advanced enough to meet the huge demand, and the government has no choice but to let foreign investors establish their industries there. With the growing cooperation between the US and China, it is critically important that most US investments there will be welcome.