The United States and China are probably the world's largest economies. Relations between these two countries are crucial to the development of the world economy. Unfortunately, economic relations between the two countries are troubled. China is large, rapidly growing, and still in the process of reforming their economy. Despite its size and importance to the global economy, it recently became a member of the World Trade Organization, the primary institution for managing the world trade system. As a result, trade between the United States and China has not been perfect. .
For Warp Corporation to invest in China the advantages must outweigh the disadvantages. First, Warp Corporation must begin by researching the profitability of company they would purchase in China. In this case Warp Corporation should not expand overseas. Reasons for not investing include the following factors: political influence, financial support, cultural preferences, all expenses, competition, and the economy of China. The political influence in China is huge. Politics involves the Chinese government, military, and taxes. The Chinese government is corrupt and has a large impact on the countries that enter the Chinese market. If the political leadership in China began to fear that other nations were pulling the country apart, there might be a cutback of economic reform, and the Chinese government would become less responsive to the interests of foreigners and to fulfilling international obligations. To prevent this fear, regulations are placed on the businesses that decide to come into China. These regulations differ from the U.S., which makes it difficult to start the business as soon as possible. For example, if the regulations are not abided by the Chinese government can use their military, go into a U.S. owned business and shut it down. These actions cannot be tolerated in a business that is trying to grow.
