Sociology Essay Sample Paper on Foreign Investment in China

Foreign Investment in China

Q1.

            The banking industry in China was controlled by the China Banking and Regulatory Commission (CBRC) and People’s Bank of China (PBC), which were both under the supervisory authority of the State Council. CBRC carried out supervisory and regulatory functions over the banking sector in China where as PBC controlled the China’s monetary policy alongside the liquidity of China’s financial system. The banking system also contained four State-Owned Commercial Banks, three policy lending financial institutions and several other credit co-operatives, commercial banks and financial institutions. At the end of the year 2000, the Chinese banks’ total assets summed to $2.4 trillion, which dramatically rose to $4.9 trillion by 2006.

Q2.

            The economic and political stability that is experienced in China has highly attracted many foreign investors as it offers them with business predictability and wide opportunities of future growth. In addition, the high development standards that China has achieved through; sufficient infrastructure, availability of resources and efficient business chains has attracted many investors too. The foreign investors enjoy an established and wide market, cheap labor costs, and incentives among others, which increase the possibilities of making huge returns. However, the foreign investors go through; long and complicated application processes during entry into the businesses, unsatisfactory foreign trade policies, and incomplete legal system in China, which hinders quick business establishments.

Q3.

            Yes, cross-convergence is the solution to the most of challenges that foreign banks encounters in China. This gives the foreign banks a chance to make use of different types of policies and strategies that will lead them towards achieving high, developed, and efficient forms of management. In addition, cross-convergence, allows the transfer of knowledge and quick growth of human skills leading to high performances in key sectors in the institutions.

Works Cited

“Foreign Investment in Chinese Banking Sector: HR Challenges| Human Resource Management Case Study.” Case Study|Business|Management|Economics|Finance|Marketing|Case Studies. N.p., n.d. Web. 16 June 2015.