Imagine you are an American diplomat in 1970

Imagine you are an American diplomat in 1970
Imagine you are an American diplomat in 1970

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Imagine you are an American diplomat in 1970

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Imagine you are an American diplomat in 1970. You are part of a team sent to a strategic Third World country in hopes of making an alliance. Soviet diplomats have been there before you and have suggested to the leaders of this Third World country that the United States should not be trusted as a partner because of how Americans treat their own minority populations. You have been asked to provide a formal, written rebuttal to the Soviet claims.

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After giving the matter some thought, you have decided to base your rebuttal on key changes in both foreign and domestic policy over the past 50 years to convince this Third World country to join with the Americans as allies in the Cold War. You realize that you cannot simply “sugarcoat” things and be believable, therefore you plan to provide a thoughtful response that does admit inequities in American society in addition to discussing ongoing changes and positive policies.

What are the key three points you want to get across in your rebuttal?

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America as a superpower

America as a superpower
America as a superpower

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America as a superpower

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Choose one of these thesis statements as your position (make it the last sentence of your introductory paragraph):

THESIS STATEMENT 1: By examples from different decades since 1950, it is clear that the international policing role and strategy of the United States was once essential, but should now be discarded as ineffective and counterproductive.

THESIS STATEMENT 2: By examples from different decades since 1950, it is clear that the international policing role and strategy of the United States during the Cold War has become even more necessary in this period of terrorism and instability.

� Whichever thesis statement you choose, plan to make that thesis statement the last sentence in your introductory paragraph. The general subject is America’s international “policing” role as a superpower for the last 70-plus years. You may modify the wording slightly to fit more precisely the position you wish to take. This is NOT a simple statement of a topic; it is a statement of a position you are taking about that topic. p.s. Valid arguments and “A” papers can be made with either thesis. So, you choose the one you think is the stronger position.

America as a superpower

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In your paper, use specific examples’two from the Cold War years (roughly 1950-1990) and two from post Cold War years (the past three decades, roughly 1991-2019). After giving general consideration to your readings and your research, select one of the positions above as your position your thesis. (Sometimes after doing more thorough research, you might choose the reverse position. This happens with critical thinking and inquiry. Your final paper might end up taking a different position than you originally envisioned.) Organize your paper as follows, handling these issues with this FOUR-PART organization (see Template also):

1. Part One-one paragraph. INTRODUCTION AND THESIS STATEMENT. The position you choose will be the thesis statement in your opening paragraph; make it the last sentence of the paragraph.

2. Part Two-two paragraphs normally. FOUR EXAMPLES. To support your thesis, use four specific examples, two from the Cold War years (1950-1990) and two from the post-Cold War period (1991-2019). The examples should be specific and clearly support your thesis. In these paragraphs one generally must have in-text citations to support your specific examples and to show where the information was found. Make the examples SPECIFIC. The FORMAT SAMPLE paper can also help on this part.

America as a superpower

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3. Part Three-one paragraph normally. DEALING WITH THE OPPOSING VIEW. The opposing view is the thesis statement you did NOT choose. Identify that opposing view and explain why the opposing view is weak in comparison to yours. No new research needed; just one paragraph of critical thinking suggesting why your thesis/position is stronger than a different view. Approach it this way: You adopted a thesis statement. The opposing view is the thesis statement you did NOT adopt. You might start this paragraph by saying “Some may disagree with my thesis and argue that ——- . “THEN”you spend 3 to 5 sentences giving a reasoned argument why your thesis is stronger than the opposing view.

4. Part Four-one paragraph: LEGACY TODAY AND CONCLUSION: Consider your life today: In what way does the history you have shown shape or impact issues in your workplace or desired profession? This might be unclear at first since it is foreign policy. (But, super-power status does inevitably provide advantages in a global economy.) This might be easy if you work in cyber security, criminal justice, IT, etc.

You can consider the legal impact of terrorism on the justice system, privacy issues, etc. Even a business must now plan accordingly. Every profession now must have security safeguards, have emergency incident preparations, plan what to do with data, etc. A few comments on these things for your profession-and some comments on how this impacts our lives in general. The FORMAT SAMPLE PAPER also has good suggestions for this part.

America as a superpower

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After the fourth part concluding the paper, be sure you have the numbered list of sources at the end. And be sure each source listed is also used and cited clearly in the body of the paper. The FORMAT SAMPLE paper illustrates this.

Length: The paper should be 500-to-750 words in length. 500 is a minimum. 750 is a guideline as a maximum. This word-count does not include any title page or sources list.

Research and References: You must use a MINIMUM of four quality academic sources; the Schultz textbook must be one of them. The other three may be from the list below or from other quality sources you find in the university’s online library. (Sticking with the list is a safe strategy; using other quality sources from the university’s online library is permitted.) This is guided research, not Googling.

Source list for Assignment 3: Some sources are “primary” sources from the time period being studied. Some sources below can be accessed via direct link. For others, they are accessible through the permalink to the source in our online library: Sources below having as part of the URL have a permalink to that source in our university’s online library. (The link takes you to the library log-in; you then log in, and then the source appears for you right away). Each source below is shown in SWS form, so if you use it, you may easily copy the entire entry onto your paper’s sources list. (On a paper, never list an item as URL only.)

America as a superpower

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SWS Form for the textbook:

Kevin M. Schultz. 2018. HIST: Volume 2: U.S. History since 1865. 5th ed.

Choose sources relevant to the topic and position you are taking:

G. H. W. Bush. March 6, 1991. Address before a Joint Session of the Congress on the Cessation of the Persian Gulf Conflict.

S. Chace. Summer, 2015. The Cuban Missile Crisis: Leadership as Disturbance, Informed by History.

J. F. Dulles. Jan. 2, 1954. Secretary Dulles� Strategy of Massive Retaliation.

M. Klare. July 15, 2002. Endless Military Superiority.

T. McCrisken. April/May, 2013. Obama�s Drone War.

America as a superpower

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C. Paul. 2008. Marines on the Beach: The Politics of U.S. Military Intervention Decision Making. eBook.

C. Powell. Feb. 6, 2003. Transcript of Powell�s UN Presentation.

R. Reagan. March, 1983. Remarks at the Annual Convention of the National Association of Evangelicals.

Kevin M. Schultz. 2018. HIST: Volume 2: U.S. History since 1865. 5th ed.

S. M. Tarzi. Sept. 2014. The Folly of a Grand Strategy of Coercive Global Primacy: A Fresh Perspective on the Post-9/11 Bush Doctrine.

America as a superpower

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Impacts of FDI on Employment in China

Foreign Direct Investment (FDI)
Foreign Direct Investment (FDI)

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Impacts of FDI on Employment in China


Foreign Direct Investment (FDI) has been defined by different scholars, with the common definition referring to an investment where a firm gets acquisition and control over another foreign firm or such a firm set up its subsidiary in another foreign country. Taking many different forms, such investments could include mergers and acquisitions, intercompany loaning facilities, reinvestment of profits in foreign countries and development of new facilities overseas.

A clear distinction is drawn between FDI and portfolio investment, which involves the investments in the security of another country, either equity or debt securities (Sornarajah, 2011).

Due to the rapid changes resulting from globalization, better opportunities arise in the FDI arena. Foreign investments have flowed to different countries and had great impact on these countries’ economy. Developing countries, for instance, have endeavored to set policies that are competent and able to attract foreign investors. China, in its developing stages, managed to conceptualize the Reform and Opening Policy as early as 1978, a move that started revolutionary policy guidance for Foreign Direct Investment in China (Hale & Long, 2011, p. 16).

Since its beginning, FDI in China has undergone rapid developments.  Within 1979 and 1986, a total amount of about $8.304 Billion was transacted as a result of FDI with the main players being Taiwan, Hong Kong and Macao (Chen, 2011, p. 93). This good trend was distorted from 1987 through 1991, when China’s legal system was unsound and incapable of attracting foreign investments

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Mainly referred to as the Rapid Development Stage, happened between 1992 and 1997 after China embarked on their socialist market economic system, hence improving tremendously the opportunities for investments. During this time, China’s FDI hit the highest at $196.7 Billion.

Though the following years witnessed a dwindling trend in FDI, this changed in 2001 to the present, due to China’s involvement in the World Trade Organization and its conducive environment that attracts investments internationally. Mostly, the main sectors which China concentrated on to stabilize their FDI included technology and telecommunications, banking, retail and wholesale growth.

Other than this, China promulgated new government policies that were business friendly. By the year 2011, the country had invested in over 400,000 enterprises that were internationally funded (Deng, 2013, p. 213). Apart from the inflow on FDI, there was massive effect of such investment to the indigenous firms in China. Such effects are referred to as spillover effects, which are usually divided into monetary and demonstration effects.

Due to their technological advancements, multi-national firms are competent compared to the local companies hence giving excessive competition grounds. As a result, local companies seek better managerial skills, technological equipment and production efficiency to meet the standards of the multinational companies (Zhang, et. al., 2016, p. 180). Despite being advantageous, this kind of competition between firms can be detrimental on the local firms, where multinational companies using technological advancements and productivity snatch market shares from local firms.

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There are various forms of FDI in China, including; equity joint ventures, wholly foreign-owned enterprise, joint exploration, FDI shareholding and contractual joint ventures. As its name may suggest, equity joint ventures are owned jointly by foreign and Chinese companies, individuals or other governmental organizations. Both companies manage the company together, hence sharing profits and risks together on determined scales as per capital contributions.

Contractual joint ventures, on the other hand, are somewhat similar to the equity joint venture, only that obligations and duties arising on the parties are laid off in a contract. Wholly foreign owned refer to foreign companies, individual and enterprise investments who establish themselves in China. In this scenario, all capital derives from such foreign firms. FDI shareholding involves the purchase of equity by foreign investors, hence leading to foreign invested enterprise.

Joint explorations, on the other hand, refer to various economic cooperation on the international arena, usually divided into exploration, exploitation then production. In many instances, joint explorations venture into exploitation of natural resources (OECD, 2013, p. 53).

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As earlier mentioned, FDI has a spillover effect. Particularly, FDI ensures creation of jobs, explained through the greenfield and brownfield analogies. Greenfield analogy can be explained as an investment that creates new production lines in host countries, through starting of a new company. Brownfield investment, in contrast, involves overseas mergers and acquisition. Due to its nature, brownfield investments cannot be certainly denoted as job openers, considering no new companies are created.

Another effect of FDI experienced in China is the crowding-effect, considering many multinationals are investing in the country. Local firms are overly pressurized to exhibit good performance, or risk winding up. This leads to severe pressure on employees. The inter-dependency between FDI and employment is usually affected by diverse variables, including population, exports and growth of domestic economy (Michael, 2013, p. 24).

Literature review

In the recent years, China has been trying to support the foreign direct investment to enhance its purchasing power via wages and to create job opportunities. Through understanding factors that impacts on employment, particularly those associated with FDI, China can realize its potential expansion of its productive sector and the required production innovation techniques to improve its economy.

It is because FDI can create jobs through the direct hiring of individuals for the new industries. Moreover, the enhanced aggregate domestic employment via various types of jobs created, income distribution, wages levels, and skills transfer will result in indirect effects. The increased FDI inflow to China has led to the creation of many job opportunities, and as a result, many people have been employed (Hu, 2011).

Therefore, FDI has positively impacted on employment in the long-term since individuals who could have been unemployed, now can have jobs. However, since FDI bring new business culture and technology, its influence relies on the interaction between the growth of the productivity, labor specialization, and output growth.

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FDI has led to the improvement of technology, skills, and trade in the long-term in China. Moreover, it has facilitated adverse effects on jobs and wages as realized in China in the short-term. The findings in China in both secondary and tertiary firms for the period 1985-2008 indicated that FDI growth led to the creation of employment, enhanced skills and technology, and trade for the period.

FDI needed high-skilled personnel to work in their organizations that had sophisticated technologies, hence, necessitated an individual to acquire skills that matched FDI requirements, making one to have improved skills in the end. However, in situations where there was a bidirectional linkage between employment and FDI, in the short-term, FDI led to the loss of jobs because of displacements of workers, according to Liu (2012).

Furthermore, on one hand, new technology made industries more competitive that allowed them to employ more employees and to grow. On the other hand, new technology led to decrease in demand because of substitution of many low-skilled workers by fewer high skilled employees. Therefore, new technology had both merits and demerits attributed to job creation and employment.

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Recent empirical evidence studies show that China should not expect to have any job opportunities despite the benefits she gets from FDI (Zia & Rizvi,2011). It is because elasticity growth associated with employment in China is extremely low, which makes employment enhancing policies be priorities. Initially, when foreign investors and their companies came, many people were employed, but over time the rate of absorption became low. T

he new companies were able to attain the required number of employees in their organizations with time, meaning new people could not be employed leading to low elasticity growth associated jobs.

When China is studied using the two-sector dual economy model to show the influence of foreign investment on domestic capital accumulation and underemployment, it shows that foreign investment lower manufacturing sectors in the long-term. The manufacturing sector decline because some of the local companies were not able to compete adequately with foreign organizations associated with FDI as they had a lower level of technology and skills.

FDI also had a large effect in the high-wage manufacturing firms than on a one-for-one basis and crowds out domestic capital. The study of FDI effect using analysis of panel information to find labor demands roles for white and blue collar employees showed that FDI had significantly positive outcomes. However, the positive effect, especially with the blue-collar jobs, declined with the rise of the skilled intensity of manufacturing companies (Liu, 2012).

According to Duan (2011), labor market, market size and market potential, clustering and cluster, macroeconomic policies, openness, and scientific research level account for the reason of determining the FDI location. Labor productivity and labor costs also influence FDI location, which indicates that improved workforce skills level attracts FDI. Thus, FDI favors high-skill workers because they are the ones mostly likely to get employed in the new job markets, and makes low-skill workers liable to lose their employments due to replacement.

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Ownership that is so crucial in the creation of the jobs affects employment in China. Research indicates that the major reason for inadequate employment creation is because the state own enterprises absorb employees quickly than the private sector. The low absorption rate is attributed to the fact that both joint ventures and foreign-owned multinationals that are supposed to employ many people belong to the private sector.

Thus, it means that the private sector has a higher capacity of creating more employment opportunities when compared to the state-owned enterprises (Sjoholm, 2011). In a similar analysis of employment, Hale & Long (2012) found out that FDI indirectly and directly impacts jobs. According to them, FDI can directly increase jobs and indirectly lower jobs by improving productivity levels indirectly and supplanting domestic investment. However, when the effects of the two are combined, FDI has significant positive influence in China.

Liu (2012) analyzed the effect FDI has on employment creation in China as far as manufacturing companies are concerned. Liu relied on the industry-level data in the Chinese manufacturing industry for the period 2000-2009. Also, Liu presented an analysis of direct and indirect job impacts. The findings indicated that both the private domestic industries and FDI have higher employment growth than the non-private domestic companies in China.

Furthermore, firms with other types of ownerships had less advantageous features than the FDI, in particular, their access to the export market, when the cross-ownership comparison is done. The conclusion was that FDI had led to employment creation in the Chinese manufacturing sector.

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The impact of FDI on employment may not be beneficial to China. Hu (2011) illustrates that when crowding-out is taken into consideration, the crowding-out only becomes significant when foreign multinational enterprises focus on the recipient nation’ market. It is because the FDI influx may bring in more pressure on domestic firms. Moreover, the external investment requires higher efficiency and better technology, which implies that it will only need fewer employees than before, making the crowding-out effect of FDI lead to more workers being laid off as a result of more of the domestic companies going bankrupt.

Zia & Rizvi (2011) indicate that FDI has more favorable when China faces economic crises. It is because FDI has an advantage over other investments programs such as loans or portfolio as it often prove to be more resilient in times of economic crisis. The other types of investment are subject to large reversal when there is a financial crisis. Thus, economic crisis presents a major challenge to employees and employment.

Workers who are employed in other types of investment are more likely to be laid off because their organizations may go bankrupt, which is unlikely of FDI that is more resilient and stable in an economic crisis. In this scenario, FDI positively impacts on employment in China because workers are not likely to lose their jobs due to the economic crisis.

FDI has also led to the loss of employment among people in China, according to Zia & Rizvi (2011). The increased competition associated with FDI’s international corporations has pushed out some of the more productive local business enterprises as they are not able to compete. It is because the local business enterprises have lower technology and skills in most cases than the FDI’s companies making them less favorable to compete in the market.

Therefore, the increased competition brought in FDI has led to the loss of jobs, rather than creating. Moreover, it illustrates that FDI does not contribute to local economy development because the increased competition associated with FDI leads to people being laid off in local business ventures.

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The amount of FDI in China increased by 225.20 USD HML between December and February 2016. This is according to data the ministry of commerce of the people’s republic of china. The country averaged 416.01 USD HML between 1997 and 2016 hitting an ultimate high of 1262.7 HML in December 2015.

Labor is affected by a variety of factor in an economy both from either side of the border of the economic space of a country or an economy.  Empirical research has given much more attention to the effects of trade on labor markets than to the impacts of FDI on employments. Analysis on the effect of FDI on employment is thus more complicated.

A large number of studies have been conducted that try to establish whether OFDI substitutes or complements domestic jobs and this is split into two. In the home employment effect of foreign direct investment: from empirical results, China’s OFDI contribution to the employment of the country is a noticeable difference in the studies conducted over time. It was found that FDI  can stimulate exports thus, in turn, achieving more employment.

These multinationals,  in the process of processing trade of foreign investments, source most of their materials from the domestic markets. This are raw materials, spare parts and other half finished products.  This increases the demand for these goods in the domestic market hence raising the employment in the different industries producing them and those related to them.

However, with the surplus of china’s labor being serious and FDI still being at a start stage, many investments belong to the defensive industry. These investments cause an increase in the demand of domestic capital and goods thus edging out domestic investments from the market.

Research also shows that china’s FDI  does not influence employment in the primary industries but gives a significant effect in secondary and tertiary industries. With the composition of capital in the tertiary industries being comparatively small,  labor is higher compared to other industries at similar investment levels thus FDI  achieving more influence in tertiary sectors.

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Research done on the effect of FDI on the home country have elicited mixed results. Research dealing in detail with the employment effect of FDI found a substitution effect between a foreign subsidiary’s activity and its parent’s employment. These studies have majorly concluded that change mainly occurs between countries with comparable endowments. This thus implies that low-wage countries make better substitute among themselves than.

Studies indicate that American multinationals are employing vertical FDI seem to be reducing employment back home compared to production by transferring labor intensive stages of their production processes to their affiliates in developing countries. Other studies have concluded that labor substitution is more likely to take place when factor proportions are different in various locations and vertical FDI prevails. The second group of research has found that the complementary effect prevails, this noted a positive effect on employment due to an affiliate activity in the host country.

The main reason behind this is that the opportunity to invest in a low-cost host country could increase the firm’s competitiveness, promote its use of economies of scale, and reduce its costs, which may lead to an increase in home-country employment.

This brings the picture of a scale effect dominating over a substitution effect for the parent country’s firms and the parent country’s employment. In the North American car industry, studies have found that jobs in Japan were growing as a consequence of investing abroad. This is explained as the result of allocating labor intensive production to developing countries thus increasing supervisory and ancillary employment to mainly service foreign operations.

According to Hu (2011), the two factors affecting employment are economic development and capital stock, with capital stock encompassing both domestic and foreign FDI.

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The third group of studies shows that outward investments can increase the demand and wages for skilled labor in both the parent and host countries. This is attributed to the differences in labor demand in both countries

Nunnenkamp, Bremont and Waldrich (2011) posed the question on whether foreign direct Investment contributed to employment creation in Mexico. An analysis of FDI and employment data covering manufacturing firms in Mexico were used. From this, they estimated the dynamic labor demand functions for blue and white collar workers, including both FDI and its interaction with major industry characteristics.

Using the GMM estimator proposed by Nunnenkamp, Bremont and Waldrich (2011) they accounted for the relatively short time dimension of the panel data (1994-2006). It showed that FDI had a positive though the quantitatively modest impact on manufacturing employment in Mexico. This was in contrast to a widely held view applying to both white collar and blue collar jobs.

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Hu (2011) found that it is very difficult to assess the outcome of FDI on employment in European nations mainly due to the different stages of economic development in the countries. According to him, the first stage of FDI  is characterized by elimination unproductive jobs giving way to new productive jobs.

This is mainly due to the restructuring of jobs by extensive mechanization and automation leading to loss employment while the organisations became better and more profitable. From these, the multinationals create a better and more productive labor force.  This process of creatively destroying labor ends up creating a more positive effect on employment. Finally, it is found that the research shows that FDI is not a golden wand to the creation of jobs.

 Liu (2012) using data collected between 1986-2010, concludes that that the effect of FDI on employment was positive before 1996, but the effect was not noticeable after 1996.

According to established theory, the activities of affiliates can be related to the motives of FDI, namely efficiency seeking, market seeking and strategic-asset-seeking flows. The impact of these types of FDI on trade patterns are explained by distinguishing four kinds of trade linkages between the parent firm and her affiliates:

  • The substitution of former exports through FDI
  • Growing (re-)imports of goods and services produced abroad
  • FDI associated exports of goods and services
  • FDI induced exports of other product lines neither generated by the foreign affiliates nor exported earlier by the parent 

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The overall impact of FDI on domestic employment is the sum of negative (export substitution, re-imports) and positive effects (associated and induced exports) and can be tested only empirically. Any distinction between direct and indirect FDI is justified only if their trade linkages differ. In a broad view, the literature reviewed shows that MNE (Multinational Enterprises) employment can promote growth and poverty reduction in host countries in four ways.

(i) Multinational Enterprises job has a direct and indirect impact on domestic employment: this is through direct employment and indirect employment through forward and backward linkages in the local firms.

(ii) Multinational Enterprises employment boosts wages in host countries:

A number of studies have shown that Multinational Enterprises pay higher wages than local firms even after controlling for firm and worker characteristics. The presence of multinationals will also at times cause wages to be higher in industries and in provinces that have a higher foreign direct investment

(iii) Multinational Enterprises employment fosters technological transfers:

Through labor turnover, technology gets diffuse into the host countries as domestic employees move from foreign firms to local companies.

(iv) Multinational enterprises employment enhances labor force productivity in host country:

Several studies have shown that workers in foreign-owned enterprises are more productive than workers in domestically owned enterprises.

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Time series and AUTOREG process in SAS were used to access historical association between the inflows of FDI and employment in China. Since, dependent and independent variables are time series data, model error has a significant probability of not being independent based on time   The AUTOREG procedure measures and predicts linear regression for time series in the event that errors are Autocorrelated.

Dependent and independent Variables

As indicated early, FDI has led to crowding-out influence on employment, as such an essential indicator of job opportunities. Besides FDI, various variables may impact employment including GDP, interest rates and wages. Some of the components of GDP include government expenditure, consumption, value of net exports and investment (Mankiw, 2012). The thesis uses China’s Statistical Yearbook that has FDI as an investment element.

For that reason, the assessment was performed using GDP values from this Statistical yearbook and provided values of GDP subtracted with FDI.  The results were then utilized in testing the association between GDP and employment. For easier understanding, model outcomes of GDP are obtained from Statistical Yearbook of China. The estimates of the model are similar, with same independent variables under the requirements of alternative model. The model outcome of GDP with no adjusted FDI is demonstrated in analysis section.       

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Moreover, since China’s FDI information from World Bank beginning in 2005 demonstrate considerably amounts in comparison to Statistical Yearbook, however, employment and GDP are similar in these sources, models were evaluated using FDI and other variables from World Bank and Statistical Yearbook respectively. The results are demonstrated in table 1.

Table 1: Chinese National Economy Data

    YearEmplo yment (100mi llion)    FDI  FDI ˄World Bank˅    GDP  GDP- FDI  total wageintere st rate for depos itsintere st rate for loans  Exchan ge rate
19854.987319.5616.592943.0 72923.5 1430.9 18.287.923.2095
19865.128222.4418.752816.2 32793.7 9444.7 99.367.923.7314
19875.278323.1423.143290.2 93267.1 5504.1 39.367.923.7314
19885.433431.9431.944124.0 94092.1 5620.7 310.8013.323.7314
19895.532933.9233.934113.1 14079.1 9622.1 514.9419.264.2088
19906.474934.8734.873695.7 13660.8 4563.7 011.5211.165.2352
19916.549143.6643.664162.9 64119.3612.8 89.009.725.4234
19926.6152110.0 8111.564739.0 54628.9 7677.2 39.009.725.8166
19936.6808275.1 5275.156345.6 66070.5 1844.5 612.0612.245.8210
19946.7455337.6 7337.875906.2 75568.6782.8 813.8614.048.5024
19956.8065375.2 1358.4927584.4 27209.2 1966.4 913.8614.048.3351
19966.8950417.2 6401.88904.2 78487.0 11076. 2912.0615.128.3290
19976.9820452.5 7442.379874.0 69421.4 91161. 116.6610.538.2700
19987.0637454.6 3437.5110463. 3210008. 691228. 046.668.018.2700
19997.1394403.1 9387.5311018. 7410615. 551324. 662.886.218.2700
20007.2085407.1 5383.99311940. 6311533. 481324. 632.886.218.2700
20017.3025468.7 8442.4113183. 5612714. 781475. 862.886.218.2700
20027.3740527.4 3493.079 76614567. 7914040. 361649. 112.795.768.2700
20037.4432535.0 5494.568 47116519. 1615984. 111853. 642.795.768.2700
20047.5220606.3 0621.080 4319462. 718856. 42129. 993.606.128.2700
20057.5825603.2 51041.08 69423208. 3322605. 082554. 223.606.128.0757
20067.4978630.2 11240.82 03628471. 1327840. 923101. 644.146.397.8224
20077.5321747.6 81562.49 33536166. 735419. 023998. 094.416.397.3714
20087.5564923.9 51715.34 6546083. 95451605147. 095.587.476.8565
20097.5828900.3 31310.57 05351082. 3850182. 055900. 705.587.476.8227
20107.61051057. 352437.03 43560602. 1559544. 87111. 574.206.146.6469
20117.64201160. 112800.72 21973453. 3972293. 289455. 835.006.606.3405

Table 2 Chinese National Economy GDP Disaggregated Data

Unit (100 million US$)

  YearGross Domestic Product
household expendituregovernment expenditureGross capital formationNet export

Data Source: China statistical yearbook.

Table 3 Chinese Economy Primary Sector Source Data

Unit (100 million US$)

YearEmployment (100 million)FDIGDPGDP-FDITotal Wage

Data Source: China statistical yearbook.

Table 4 Chinese Economy Secondary Sector Data

Unit (100

millio n US$)

YearEmployment (100 million)FDIGDPGDP-FDITotal Wage

Data Source: China statistical yearbook.

Table 5 Chinese Economy Tertiary Industry  Data

YearEmployment (100 million)FDIGDPGDP-FDITotal Wage
Data Source: China statistical yearbook.    

Unit (100 million US$)

Model outcome of industry with respect to GDP without FDI are indicated in table 6

Table 6: Chinese National Economy Normal Least Squares Results

The AUTOREG Procedure

MSE0.15224Root MSE0.39018
Durbin-Watson0.7275Regress R-Square0.8492
  Total R-Square0.8492
VariableDFEstimateStandard Errort ValueApprox Pr > |t|

Additionally, wages influence employment. A number of studies have assessed the connection between wages and employment. Wages cannot affect employment, in other words, reducing real wages in not useful to increase job opportunities. On the contrary increased job opportunities do not affect wages. When job opportunities increase, it implies that increased demand while reducing real wages. Interest rates also affect employment.

For instance, a decrease in interest rate on deposit means that individuals will deposit less hence promote consumption in households while promoting production and recruitment as the market will require additional employees. In contrast, when there is a reduction of interest rate on loans, producers will borrow from banks at reduced costs thus assist in expanding production and a nation will need extra employees.

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Sources of data

In this study, to assess the connection between FDI and employment in China, eight independent variables were used including wages, FDI, government expenditure, consumption, net exports, investment, interest rates for loans and deposit from 1985 to 2011.

In china, the Reform and Opening Policy was introduced in 1978, a period when FDI started to flow. Nonetheless, as a result of inadequate information on FDI, interest rate for deposit and loans, wages while ensuring that independent variable , data was collected from similar source as well as period- 1985to 2011.When it comes to statistical analysis, three major industries in the economy of China, information on four elements of GDP and interest rates for loans and deposit was not available.   

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Additionally, in the analysis of three major sectors; GDP, FDI and wages were used as independent variables. Information on industry analysis was available for 1997 to 201. And for national economy and industry analysis dependent variable was similar – number of employed individuals, which was represented as 100 million employment opportunities.

Consequently, original Chinese information source FDI units, household spending, net exports, wages, government spending and gross capital are represented by 100 million US dollars. On the other hand, household spending, net exports, wages, government spending and gross capital are represented based on Chinese currency RMB. To ensure that there is uniformity in the information, exchange rate for RMB to USD from 1985 to 2011 was employed to convert RMB to 100 million USD. The interest rates units are expressed as a percentage.                           

Owing to the fact that each industry has various units/sectors, the primary, secondary and tertiary data values are the totals of every sector in each industry. The primary sector comprises of forestry, agriculture, fishing and animal husbandry while the secondary industry involves manufacturing, mining, supply of water, gas, and waters. Addition, tertiary industry represents other sectors not in the primary and secondary industries.

Some of these sectors are storage, transport, information dissemination, hotels and catering; realtor, scientific research and so forth (China Statistical Yearbook).For that reason, the useful data for primary, secondary and tertiary sectors, and FDI information and wages were estimated.  GDP information is collected from China’s yearbook. Information for the China’s economy is illustrated in Table 1 and Table 2. Table 3 presents primary sector data and Table 4 and Table 5 represents secondary and tertiary sectors for the economy of china respectively.

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Data analysis was performed using AUTOREG procedure to demonstrate the connection between independent and dependent variables of employment. The modeling approach changes due to inadequate interdependence of data values as well as estimation error through modeling errors as  lag-one autoregressive, or AR(1), framework. According to the model errors in the analysis, it demonstrates cases of moderate level of skewedness for particular model while approximating normality in certain cases.

Much as heteroskedasticity of errors is not directly tackled, AUTOREG process id developed to deal with such issues; based on the fact that there is insufficient volatility in the information to assess the models.

Findings for the national economy of China

Based on the findings from the overall economy of China, it is evident that independent variables including household spending, FDI, gross capital, government spending wages, net capital and interest rates of loans and deposits have a significant relationship with employment- the dependent variable. According to estimations from Ordinary Least Squares, 84.95 percent of changes in employment can be forecasted by independent variables (table 6).

In addition, from Maximum Likelihood that involves adjusted Autocorrelated errors, there were about 95.89 percent changes in employment, which can be estimated by eight predictor variables (Table 7). The association between every independent as well as dependent variable is illustrated in Tables 6 and 7. Since the information is focused on 27 year while standard errors are huge compared to large datasets, estimations demonstrate that particular p-values are more than 5%.

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Using, Ordinary Least Squares, it is clear that there is a strong correlation between FDI and employment- with a p-value of 0.031. There is no evident association between dependent variable and household spending, FDI, gross capital, government spending wages, net capital and interest rates of loans and deposits (Table 6 With respect to Maximum Likelihood that comprises of the impacts of autoregressive lag-1 framework there is a negative correlation between employment and interest rates loans, because the p-value is more than 5% at 0.0616.            

While this is not a strong relationship, it indicates and provides areas fro further studies in future. Again, there is no correlation between employment and other independent variables (Table 7). First-order autoregressive or AR (1) model is utilized to address trends of high serial reliance within data. It is estimated at -0.9779 with a Pearson value of less than 0.0001. This suggests that independent errors associated with data for one time though closely associated. in other words, every year  independent error is closer to the previous year’s error.

Based on Maximum Likelihood and Ordinary Least Squares, the association between independent and dependent variables are not similar. In the Ordinary Least Squares, there is a strong correlation between dependent and independent variables (Table 6), this is because the p-value is at 0.031 while estimate for parameter at 0.00317. On the other hand, for Maximum Likelihood, there is no significant correlation between employment and FDI; however, there is a negative association between employment and interest rates for loans (Table 7), since the Pearson value and parameter estimates at 0.0653 and -0.0653 respectively.                                                                    

This variation is due to Maximum Likelihood put into account First-order autoregressive procedure and also the impact of independent variables that significantly affects parameter estimations of every predictor variable. This result indicates that putting into account autoregressive framework, the impact of FDI weakens while interest rates for loan demonstrate a significant influence on employment. Residual analysis is shown in Figure 6.

Residual analysis is important when it comes to measuring the variation between estimated and observed values for every year employment level. For employment- the individuals employed in China, every year’s residual is at -1 and 1 apart from 1988 to 1990. In other words, the observed and estimated values are closely, other than in 1988 t0 1990.                                                                       

According to lag framework, the probability of white noise reduces as the lag time increases, when the lag period increase, it becomes challenging to forecast employment level. The autocorrelation function is a trend of autocorrelation in a given time series at several lags while the partial autocorrelation function is the trend of incomplete autocorrelation in any given time series at different lags

Findings for primary, secondary and tertiary sectors of the economy of China

In the primary sector it is evident that 3 independent variables including FDI, wages and GDP have a significant correlation with employment. With Ordinary Least Squares estimation, 97.36% of difference in the employment is described by these variables as demonstrated in Table 8while Maximum Likelihood represents 97.39 percent of difference in employment (Table 9).

Since the data used is fifteen year data, it is intricate to achieve a small Pearson value, which demonstrates a positive statistical association. With regards to Ordinary Least Squares, there is a strong connection between employment and FDI as the p-value is at 0.001. In addition, the Maximum Likelihood, there is a strong relationship between employment and FDI because the Pearson value is at 0.005.

When it comes to secondary industry, 3 independent variable such as GDP, FDI and wages have a strong correlation with employment. The Ordinary Least Squares, 96.63 percent and Maximum Likelihood estimations indicate that 97.91percent changes in employment level can be forecasted by wages, FDI and GDP (Table 4.5 and 4.6). Much as the Ordinary Least Squares value indicate that there is a strong connection between employment and FDI since the Pearson value is 0.0007, there is a strong negative association between employment and wages with a p-value of 00187 and -0.000276 parameter estimates.

Again, Maximum Likelihood demonstrates a strong positive association between FDI and employment since the p-value is less than 0.05 at 0.027 and parameter estimates at 0.0000461. While the there is no statistical significance between employment and wages, Maximum Likelihood is similar to Ordinary Least Squares Figure 8).

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In the tertiary industry, there is a strong correlation between 3 independent variables- wages, FDI and GDP. Ordinary Least Squares results shows 95.16 percent of difference in the employment level, which is due to these variables while Maximum Likelihood demonstrates a 98.27 percent of change in employment level, which can be described by wages, FDI and GDP.

In Ordinary Least Squares values, there is a negative association between FDI and employment, because the Pearson value is greater than 0.05 at 0.0251 and parameter value at -0.002095. There is a strong negative connection between wages and employment with Pvalue and parameter estimation at 0.0264 and -0.001326 respectively. However, there is a significant correlation between employment and GDP since Pearson value is at 0.0046 and parameter estimate at 0.00312.

Based on Maximum Likelihood outcome, the parameter estimations demonstrates a negative correlation between employment and FDI because the p value is more than 0.05 at 0.0251 and strong association between GDP and employment with a p value at 0.0604.  The strong negative association between employment and wages in the Ordinary Least Squares results is not significant in Maximum Likelihood results (Figure 9).

To guarantee that these correlations are precise, further estimations were performed by subtracting FDI from GDP, rather than using GDP information from Chinese Statistical Yearbook to establish the reported association between employment and independent variables of primary, secondary and tertiary industries of China’s economy.

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These results are similar to the above results. Nonetheless, the new outcomes will assist in verifying the validity of previous relationships. Furthermore, FDI information collected from Chinese Statistical Yearbook were evaluated against those from World Bank to guarantee that past outcomes are in line with other sources of information. The results of primary industry demonstrate that with careful consideration of autoregressive system, the strong correlation between employment and FDI is still strong.

This confirms that without doubt FDI has a positive influence on employment in the primary industry. In the secondary industry, Ordinary Least Squares and Maximum Likelihood estimates demonstrate a similar correlation between independent and dependent variables, therefore, GDP as well as wages affect level of employment, where GDP has a strong relationship while wages has a negative correlation.

In the tertiary industry, the negative association between wages and level of employment is not statistically significant in Maximum Likelihood; GDP has a strong correlation on the employment in Ordinary Least squares; and GDP is closely a strong independent variable of employment in Maximum Likelihood. Apparently, FDI has a negative impact on employment in the tertiary industry. For the general economy of China, there is no strong correlation between FDI and employment; and there exists a strong negative association between interest rates on loan and employment.


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Transnational corporations: Business in International Comparative Perspective

Transnational corporations
Transnational corporations

Transnational Corporations

Business in International Comparative Perspective

Topic: To what extent should government policy give greater priority to managing the contribution of transnational corporations to national economic success?


            Transnational corporations play an imperative role in a country’s development and foreign direct investment is considered among the most widely used approaches for economic growth in developing nations. The extent to which the government policy should give priority to managing transnational corporations’ contributions to national economic success is however a subject of debate. Depending on the national goals, the government may place stringent or relaxed measures in managing transnational corporations.

China is among the countries that have embraced foreign direct investment and whose policies on transnational corporations have been geared towards supporting their contribution to the economy. Accordingly, China’s foreign direct policies have contributed significantly to its current economic state, making it among the rapidly growing countries in the world in terms of economic growth. As the country continues to advance economically, local companies have demonstrated exponential growth; with an observable growth in the number of transnational companies.

Expectedly, these Chinese companies operating internationally are contributing a substantial proportion of the country’s income. It is for this reason that China is highly supportive of companies that invest internationally, ensuring that they can support the national economic success.  However, China is yet to put in place vital laws and regulations aimed at protecting or advancing international business expansion.

            This paper is a discussion of the extent to which government policy should prioritise the management of transnational corporations’ contribution to economic success. It seeks to recommend whether China should expand its investments and business to Britain and Japan through comparing competitive advantages and disadvantages of the two countries. It also details the lessons learnt with regards to government policy and managing transnational corporations’ contribution to economic growth, besides giving policy recommendations with reference to China’s policy formulation towards host economies.

Government policy and the contribution of transnational corporations in China

A number of studies have established that government policies are highly influential in the activities of transnational corporations. Through policy, the government can easily control the growth rate of transnational companies and thereby influence their contribution to the economy (Tihanyi et al, 2015).Cardoza, et al (2015) sought to study whether government policy has an impact on international expansion of transnational corporations; concluding that government policy can determine the performance of transnational companies and hence influence economic performance.

According to Cardoza et al (2015), governments should actively influence the contribution of transnational economies in order to maximize the gains derived from them. This may be achieved through encouraging international expansion, based on policies that support the growth of transnational corporations. Chow (2016) and OECD (2012) identify state ownership, public financing, assistance programs and regulatory frameworks as some of the policy issues that may influence transnational corporations’ contribution to the economy.

China’s economic growth has to a great extent been associated with foreign direct investment (FDI). In a bid to promote economic growth, China’s policy on FDI was considerably accommodating, thus leading to an influx in foreign companies that sought to take advantage of cheap labour and raw materials (Chow, 2016). However, the increasing number of foreign corporations almost proved unmanageable and China had to put in place more stringent measures to control FDI and to protect the local industries.

In contrast, China has shown great support for local companies investing internationally, with an aim of growing local organizations while ensuring that the country gains more from international trade (Das, 2015). It is evident that the number of transnational companies in China has grown tremendously over the years, a process that is attributed to increased globalization and government support for transnational companies.

The government is encouraging companies to invest internationally through its ‘go global’ strategy. Established in 1999, the policy as aimed at promoting large enterprise internationalisation through offering financial resource accessibility and state-supported research (Chow, 2016). The policy which has been instrumental in Chinese multinational company expansion ensured that companies could access below-market rate capital in the form of soft and subsidised loans from state-owned banks. This policy greatly influenced the growth of transnational corporations in China.

In 2002, the SME Promotion Law was adopted, with an objective of persuading financial institutions to make financing available to small and medium sized companies. As a result, a considerable number of SMEs have expanded globally and account for 70% of exports in China (Chow, 2016). 

Government tax incentives issued by China on transnational corporations ensure that companies can reinvest their proceeds in the country and thus contribute to economic development. In China, transnational corporations can get a 40% refund on profits which are re-invested to increase the firm’s capital or develop a new firm (UNCTAD, 2016). The tax refund is only applicable if the company has re-invested the capital for five years. Such an incentive not only encourages business growth but it also ensures that money earned from international business is beneficial to the economy.

Reduced corporate tax for businesses exploring overseas expansion has also been instrumental in influencing the growth of transnational corporations and consequently their increased contribution to the economy (UNCTAD, 2016). Therefore, government control through policies can play an important role in ensuring that transnational economies can contribute to economic performance.

The stringent measures taken by the Chinese government in managing multinational companies in the country has had a direct impact on local companies. As the country seeks to protect domestic industries, there has been exponential growth among small and medium firms, many of which are exploring international possibilities in a bid to expand their businesses.

Britain’s competitive advantages and disadvantages        


            Britain’s competitive advantages are mostly associated with the friendly business environment. Britain is considerably open to foreign investment and the equal opportunities are given in private company formation and operation (UKTI, 2016). There are no special national requirements, except that one of the company’s directors must reside in the UK. Accordingly, the government is keen on defending all businesses despite their ownership nationality.

This makes investing in Britain highly favourable for foreign firms. In addition, Britain is a key economy and is known as an export platform linking with most major economies, and hence a suitable investment destination (Ernst & Young, 2016).

            Britain is considered one of the strongest world economies in the globe. By this virtue, Britain is a favourable destination for international business. Other economic advantages include skilled labour availability, advanced infrastructure, low inflation, low taxation and government commitment to economic reform including privatization and deregulation.

            Britain enjoys a relatively stable political environment. This is a major prerequisite for successful international business as it ensures productivity and return on investments. Dittmer (2016) notes that political instability could affect business significantly through disrupting operations, hence the need for organizations to assess a target country’s political environment.

            Britain’s membership in various trade alliances presents a major advantage as it means that the country has a wide market for its products. Britain belongs to the Commonwealth of Nations, United Nations, OECD, G7, G8, G20, and the World Trade Organisation among others.


            Britain’s heavy taxation and regulations place the country at a disadvantage and has been a constant barrier for investment. 21% in corporate tax is charged on profits that exceed $ 2.1 million (UKTI, 2016). This is because foreign companies have to sacrifice a significant portion of their income towards tax and other legal requirements. 

            Britain’s economic performance has slowed considerably, a factor associated with global trends, the recent recessions and the country’s housing market slump (Stepek, 2012). Declining economic performance has a considerable impact on business proceeds for companies investing in Britain.

            Britain’s EU exit, which has been christened ‘Brexit’ is currently considered a disadvantage because of the uncertainty that engulfs the country’s decision to exit. It has been argued that this may lead to trade imbalances and affect Britain’s international trade prospects. According to BBC News (2016a), the future trading relationship between EU and Britain is uncertain and this may impact the economy through lower levels of investment and reduced consumer spending, from 2.5% expected this year to 0.5% next year. Economic growth is thereby expected to slow down considerably before the country stabilizes. 

Japan’s competitive advantages and disadvantages


            Japan is among the best performing economies globally, with the country being ranked the third largest based on nominal GDP (Agr, 2014). Japan’s per capita GDP was $37,519 in 2014. The country is known to achieve trade and international investment surplus.

            Japan is considered among the countries with the highest innovation and this has propelled the economy to a great extent. The country is the home of manufacturing companies and innovations including vehicles, machinery and technology. Japan’s automobile industry is the 3rd largest in the globe while the electronics products industry is the largest.

            Foreign companies investing in Japan can benefit from the accommodating foreign investment rules. Japan is generally considered as a friendly international business destination based on the ease of business. According to the 2013 ease of doing business index, Japan was ranked 27th out of 185 countries (Agr, 2014).

Entry of foreign of companies in Japan is considerably easy and the country is considered as having among the lowest tax rates globally for consumption and personal income taxes. Japan also has among the leading stock exchanges in the globe, following the merger of Tokyo and Osaka Stock Exchanges (BBC News, 2016b).


            Japan’s currency exchange is highly volatile and this makes it prone to economic fluctuations. Due to the volatility, the country’s GDP in terms of dollars oscillates significantly. The currency fluctuations can be a major short-coming for foreign companies because they are likely to experience major losses in the process of transferring funds back to their countries and during the process of exporting and importing raw materials and finished goods (Yildirim & Ivrendi, 2016).

            While the government is easy on personal and consumption tax, corporate tax is relatively high at 36.8% and considered second highest globally (Temple-West & Dixon, 2012). A high tax bracket can limit business performance exceedingly by impacting on profitability. Organizations that seek to invest in Japan must evaluate their strategy to determine whether it would be profitable to invest in the country.

            Japan is currently experiencing a shrinking workforce and this is likely to influence companies’ ability to access skilled workforce. This can be explained by the decline in birth rate and the country’s immigration barriers (Takao, 2014).

Lessons to be learnt with regards to government policy and the contribution of transnational corporations

            Transnational corporations experience constant challenges in the quest to successfully profit from their international business endeavours. Accordingly, they require adequate support from the government through policies that favour their international competitiveness.

The first lesson derived from this discussion is that while transnational corporations play an imperative role in driving a country’s economy, ensuring international success requires considerable support from the government (Marinov & Marinova, 2012). Through this paper, it can be established that having targeted policies that recognize the contribution of transnational corporations in economic success is highly necessary.

Despite the efforts by the Chinese government to encourage foreign investment, the country must put in place dedicated efforts to develop effective policies to protect transnational companies. According to Chen (2014), a majority of private enterprises in China are still in the development stages as far as international expansion is concerned. They are not only small-scale but also lack basic support in terms of laws protecting their transnational operations.

Chen (2014) notes that the government needs to develop an overseas investment and insurance legislation, institute financial lending mechanisms and support innovation and technology development. It is notable that Chinese companies face considerable resistance in the international market due to business culture differences that impact on profitability margins. An example is that Chinese firms focus on the production of cheap products, which are often labour intensive, such that their profitability overseas is greatly dwarfed by competitors.

            Creating trade alliances with various countries can contribute significantly to promoting the contribution of transnational corporations to a country’s economy. Backer (2015) note that by creating trade relations with foreign countries, an economy can benefit from tax benefits and more favourable environment for their businesses abroad.

This makes it easier for transnational corporations to survive in the foreign market and thereby contribute more to national economic performance. China must strive to forge new trade treaties and put in place policies that support such alliances, with countries in which it targets for investment. This way, businesses can gain an easy mode of entry and also benefit from higher profitability levels.

Circumstances and evidence for China in formulating policy towards host countries Britain and Japan

            As the economy of China continues to grow, it is evident that the level of global competition has grown significantly. In order to position itself for further economic growth, China must formulate policy that will ensure that its economic growth prospects are assured (Mesquita, 2013). Through formulating policy towards host countries, China can influence its operations in those countries and consequently its economic performance.

            Surviving in a foreign economy can be daunting for transnational organisations due to high competition. Accordingly, the formulation of policy must be done with the objective of protecting local companies in the host countries and ensuring that they are profitable enough to sustain their activities overseas. This insinuates that the government can develop policy that reduces transnational corporates’ expenditure if they invest in Britain or Japan. This way, the country can encourage companies to invest in those countries.

Formulating policy towards host countries ensures cooperation between a country and the host, given that there are clear guidelines on their relationship (Mesquita, 2013). This includes the kind of environment that the country’s businesses operate in. It therefore becomes clear for companies that seek to invest in the host countries, about the business environment they are expected to operate in.

            Glass & Saggi (2014) explore the question of tax policies and determine that such policies are likely to affect foreign direct investment. Cognisant of this, developing policies that seek to influence host countries into offering favourable tax policies may be effective in promoting transnational corporation expansion into the host countries. In Britain for example, the high tax rates may discourage Chinese companies from investing in the country and by formulating policy towards Britain, China may influence the tax rates and hence encourage investment in this economy.

Conclusions and recommendations

            Effective economic contribution by transnational corporations is dependent on various factors, among them the level of support offered by the government in their quest to venture overseas. This includes the policies adopted to support international business and promote performance of transnational corporations. In essence, the government should to a great extent influence transnational corporations’ economic contribution through its policies. 

            In order to maximize the performance of its transnational corporations, China must strategically make policies aimed at improving their international market survival. This will ensure that they can compete effectively and that they have adequate returns to bring back home. Through developing various regulations including taxation policies that favour international expansion, making funding easily available for budding transnational corporations and easing international trade barriers, China could effectively utilize policy to influence transnational corporations’ contribution to the economy.

Japan and Britain both offer great prospects for China in terms of foreign investment. Being among the world’s largest economies, Japan and Britain present favourable investment destinations for transnational corporations in China. Britain offers great investment opportunities in a country with a stable economic and political environment, which are major prerequisites for business growth.

As a country that is highly developed, transnational companies from China stand to gain considerable international experience through investing in Britain. Besides, Britain promises a wide market for products due to its numerous memberships in international trade alliances. In Japan, it is evident that economic growth is at its peak, as the country continues to rank among the top economic performers in the world. This promises great opportunities for Chinese companies that invest in Japan.

It is notable that despite the attractiveness of host countries, there are always shortcomings or comparative disadvantages that a company must explore before making a decision to invest. Based on this discussion, it is evident that Britain and Japan are characterised by various disadvantages, with the main one for Britain being the uncertainty associated with Brexit and for Japan the currency exchange volatility. Accordingly, China must weigh its options before investing.

A comparison between the advantages and disadvantages of investing in Japan and Britain indicates that Britain have great prospects for international trade. While disadvantages exist, these are outweighed by the advantages. In conclusion, China should seek to promote trade relations with Japan and Britain, with the objective of expanding business and investing in these countries.


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Failed states – U.S. Involvement

Failed states – U.S. Involvement

            When states fail, and U.S. intervention is called upon, a clear understanding of the scope of the failure should be the initial point of discussion.  As such, information must be gleaned in order to accurately assess the nature of the failed state, its level of permanence, and the conceived success rate of the operation.

U.S. military involvement within a fragile state can take on several roles, primarily in terms of repairing the fracture, impeding the conflict, and easing human suffering.  Operational commanders, therefore, must determine the extent to which these roles will be executed while planning to assist a fragile state.

U. S Commanders in Failed States

            One objective of U.S. commanders involved in failed states operations would be to “fix” the underlying issue creating the fracture. In terms of difficulty, this objective appears most lofty for several reasons. First, a complete fix of a fragile state requires intervention during the earliest stages of the crisis.  This may be inopportune.  Second, this intervention can be costly and time-consuming, requiring a lengthy military presence in the fragile country in order to fully accomplish the repair.

Third, the chances of sustaining a long-term remedy must be acutely considered before the commitment of time and manpower are allocated for this cause.  It is suggested that thorough intelligence capabilities be engaged to effectively assess the stage of fragility in a given state.  If, for example, the state is in such disrepair that U.S. efforts to establish a workable plan for governmental restructuring is improbably, then operational command decisions may warrant an alternative strategy for the region.

            If command determines that a failed states “fix” is not attainable, U.S. forces can be used in fragile states to impede further conflicts.  Although deterring conflict is an important objective in an insurgency operation and may not solve the issue immediately, it does lay the groundwork for potential repair of the failed states in terms of a peacekeeping effort during governmental restructuring efforts. The accurate assessment of strategic needs would aid command operations in choosing the appropriate combination of repair and defense objectives for the region in question. 

            Although repair objectives may be long term, defense and humanitarian objectives are considered limited objectives due to their stop-gap nature.  Providing aid to at-risk individuals in fragile states can ease human suffering and can facilitate transport of needed supplies to vulnerable individuals in the region.  Although these efforts are admirable and certainly in need, they are limited at best and will not resolve the situation in the long term. 

In fact, these interventions may be counterproductive in some instances. For example, in order to disperse these supplies, U.S. military forces may have to engage with failed states leadership which, in turn, may falsely represent their government as a legitimate regime.  In addition, U.S. aid may be used to the advantage of the insurgents as they intervene in the disbursement of food, water, and supplies to those they manipulate. 

This was seen most recently in Somalia, where Islamic insurgents refused to allow U.S. humanitarian aid to reach starving Somalians experiencing acute drought conditions. As a result, operational commanders must weigh the climate of the region in which humanitarian assistance is needed in order to effectively determine the appropriate strategy for proving relief in fragile and failed states.

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Comedy of Euros Article Essa

Comedy of Euros
Comedy of Euros

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Comedy of Euros

This article reflects the falling out of Britain with other members in the European Union. The depth of this crisis is explained. Various strategies of mending the solutions are proposed. Achievements of the Brussels summit are addressed and its failure to draw a plan for saving the Euro.

Why is this newsworthy?

Comedy of Euros

The European Union is a key economic pillar and represents the economy of many nations .A crisis in this union is bound to affect the people as the economy will suffer. For this reason this story has a huge impact on the financial backgrounds of citizens in the member nation’s .It is therefore important to follow the preceding of the story in order for the readers to make any preparation to protect their financial assets  

Current financial information is newsworthy as it impacts business and people’s daily way of life. It is therefore important to keep abreast with business information across the globe by reading this financial news. The information is provide in a summarized nature helping to inform readers who do not have a significant background in business related topics.

The European union have a major impact on the economy of the globe and any news that describes changes taking place in the business environment are beneficial to different stakeholders across the global .Through these news major decisions are made that impact the economy of different countries .The story contains a detailed analysis of new ranging from economic, financial, business news across the globe .These news analyze the market trends across the globe and the drivers of these trends (economist , pg1). 

A visual showing the Euro

Commodities Lose Allure; As demand from the Asian giant cools, investors should seek more exotic plays

This article discusses the various prices of commodities .Investor options are also evaluated in this article .A comparison  of prices of gold and rare earth metals is made. An interview with industry players is also contained in the article.  

How might readers use this information? Comedy of Euros

Business news contained in these financial magazines is vital as affects the decisions made by leaders from the various governments and businesses .Readers can therefore use the information acquired in various ways aimed at improving their economic status. The magazines contain news of models used by businessmen and governments across the globe in reduction of operation costs methods that the readers can use in their businesses (Wsj, pg1). 

Readers are able to acquire information about the pricing of different shares and other financial instruments across the globe .They can therefore use the information acquired in making business decisions on whether to invest or divest their funds .This is usually easy as the magazines include a detailed analysis with various share price options from which the readers can make their decisions.  

Readers can use the information acquired from these business magazines to make a decision on the performance of their leaders. The magazines contain various decisions that governments have implemented to growth their economies and the impact of these decisions. From this information the readers can judge on whether their leaders are implementing policies that have a positive effect on the economy and make decisions on whether to re elect them for office again (Wsj, pg1).  

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Readers can use this information in making decisions on whether it is viable to invest in other countries .The magazines provide information of different markets across the globe. Readers can therefore use this information to tap on cheap production costs and availability of natural resources in the different countries .The readers can therefore follow business happening across the globe waiting for positive changes that may affect their business and capitalize on them .

A visual comparison of rare-earth metal prices vs. gold  Comedy of Euros

A Rare Apple Compromise 

Apple has been faced by tough competition. The company is softening its advertising strategies due to the rising competition .The article describe the strategies put in place by management to survive. Conversation with employees is also included.

What management decisions are involved?

Due to challenges faced in advertising Apple Inc has been forced to make management decisions aimed at ensuring the company is able to compete effectively. The management introduced the selling of advertisements within mobile applications. This has been a major decision aimed at increasing its income through advertising .The strategy was developed to compete with Google’s Admob service .This has been however difficult due to the pricing of the products as apple has introduced the product at a very high prices as compared to its competitors (Wsj, pg 5). 

To counter changes in advertising the management has developed a strategy aimed at introducing flexibility in the prices of its products .This strategy will help increase Apple’s market share thereby driving its revenue upwards. The change in price represents the management bargain in compromising its business decisions by adjusting its prices to the match with the current market changes.

Management decisions have the effect of growing or destroying an organization. It is therefore important for managers to make decisions that are timely and accurate. These decisions can only be made where information is provided timely and is accurate.

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Management is involved in implementing key strategies as well developing concepts that will steer the company towards achievement of its goals and objectives.

A visual showing Apple’s positioning the market  Comedy of Euros

Best Buy’s Profit Tumbles 

Best buy is a leading electronics dealer .With immerses competition the company has been forced to make different strategies to survive. The article describes the strategies put in place and the financial results for the company .The impact of results may have different repercussions depending on their nature. 

How might this affect stock prices?

Any information that is made available to the public domain whether positive or negative has an effect on the share price of stocks of a company. Negative information like decline of its profits may result to shareholders going into a panic and selling their shares. Negative information is associated with a declining value thus when a company posts negative results the news are bound to cause fluctuations in the stock market.

Company results are announced in their annual general meting with a report from the management explaining the reasons behind a company’s performance .Readers of the magazine are going to be influenced in making decisions regarding the shares of the company. Some readers may be tempted to purchase shares for speculative purposes where the will be aiming to make a profit should the price of the shares increase in the future .

Current share holders may dispose of their shares after reading this article in an attempt to minimize  further loss in their investment in the stock market. The new may resulted to increase trading of the shares in the market as the demand from speculators is satisfied by suppliers who want to minimize their risks (Wsj, pg1). 

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It is therefore evident that news of a decline or rise of a company’s profits has an effect on its share prices .Readers should therefore seek regular accurate information on company’s that they have an interest or are interested in to ensure they take full benefit of any information regarding the company .

A visual showing changes in share prices 

Explaining high oil prices 

Oil is a key driver of the economy in the world. The rapid rises in prices of oil has had major impact on different industries .It is therefore important to analyze the reasons behind prices increases. This article helps in explaining the key factors that have resulted in high prices 

What are the risks and rewards involved? 

The oil is a very risky industry due to the commodity involved .An accident arising in the oil industry may have hazardous effects and therefore the industry players must put in place measures to ensure there is minimal expose to risks .This will be achieved by the method used in handling oil and its related products .The methods used must ensure easy reconciliation of inventory .Oil leakage equipment must be set up to ensure the staff involved as well as other equipment are not damaged(Wsj, pg1). 

High prices  in oil will result in an increase in prices of other commodities .This will strain economies of  countries across the globe as they depend on the oil industry to drive other industries .It is therefore important to make a detailed analysis on factors affecting the prices of oil. Political factors are the most causes of increase in the price of oil and their impact should be regulated to ensure they do not adversely affect economy of major countries across the globe. 

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The rewards associated wit monitoring the price of oil is an increase in the growth and development of economies across the globe .Fair oil prices result in countries being able to develop their economy through increased investment in various industries. 

A visual showing oil prices 

Capping microfinance interest rates will hurt the poor. There are better ways to regulate the industry 

This is a microfinance article on interest rates. Various ways of regulating the industry are explained .Microfinance in different areas is explained .The reasons behind the rapid development of the micro credit industry are explained 

How does a visual improve understanding of the content? 

The visual helps the reader to relate to the content of the article. The visual in this article showing currency notes .This will help identify the content of the article. The visual clearly depicts a financial content .Microfinance is mostly related to the poor communities and capping interest rates would affect their economic empowerment 

The bank notes help the reader in analyzing the content provided in the article. These visual involve a mixture of different colors helping the reader to distinguish the difference in different data that is contained in the article. This helps them in analyzing what each color has been used to depict in the visual (Wsj, pg2).

Visuals help give content to the article in the magazines by providing readers with an outlook of all the key data that has been included. These helps the readers in understanding the articles through the summary presented in the visuals and help them in making informed decisions derived from a thorough analysis of the visuals 

The visual must be placed in an appropriate area of the article where it stands out in making a detailed summary of every data that is in the article. It is therefore important for business related magazines to consider using a visual in their articles to help the readers in understanding the articles fully. The visual should therefore be as detailed as possible but should not include irrelevant information.

Visuals must be clear and price in order for it to achieve its intended objects .it must also be bold and colored so as to attract a reader’s attention. (Lam, pg5). Visual is important as it helps in summarizing the key data provided in the information .This visual is provided in form of tables and graphs and contains trends that the reader can easily relate to .The visuals are presented in a manner that helps attract the reader’s attention helping them to get the clear meaning of the articles. 

A visual on the article


Lam, J .Enterprise Risk Management: From Incentives to Controls. Hoboken, New Jersey: Wiley. 2003, Pg 1-5 Where to Invest 2012 13.Dec 2011 <>, Commodities Lose Allure 13.Dec 2011 <> A Rare Apple Compromise 13.Dec 2011 <> Best Buy’s Profit Tumbles 13.Dec 2011 <> .Explaining High Oil Prices 13.Dec 2011The U.S. economy is no longer what’s driving the market >>

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