An Examination Of The Impact Of National Variations On The Business Practices Of Multinational Corporations In China

Abstract

The Chinese public's view of MNCs has changed dramatically since the late 1970s, when the country's economy began to welcome foreign direct investment (FDI) and global companies like 3M, Coca-Cola, and Volkswagen started looking into the Chinese market. The nation was quite welcoming to new MNCs like NEC, Philips, and Motorola in the 1980s. Aside from being free from paying customs on capital items they imported, they also paid half the corporation tax rate that local firms were required to pay. They were highly esteemed by both the government and the general public. Even in the 1990s, when more and more Chinese learnt about MNCs, foreign enterprises remained the objects of wonder and adoration in the country. Customers in China tended to favour goods and services offered by multinational corporations (MNCs) at that time. Verifying that the actions of MNCs do not conflict with national interests has recently received a great deal of attention. Additionally, foreign companies are increasingly receiving local treatment. The fact that both domestic and international corporations would have to pay the same rate of corporate taxes as of January 1, 2008, lends credence to this assertion. There has been a recent trend towards holding multinational corporations to the same or higher standards as their local rivals in several sectors, such as employment and environmental protection. The fact that those criteria are being implemented with somewhat greater rigour than before is another development they are discovering.