Walmart has recently announced plans for expansion to China. Already a retail giant in the United States, they now hope to tap into a growing and potentially lucrative new market. However, such expansion is not without risks. Doing business in China is a much different environment than doing business in the United States for a wide variety of reasons. China is not a democracy, it is a one-party state that enforces strict restrictions on the press and on the Internet. Corruption is also a big concern among businesses that invest in China.
Furthermore, the Chinese government has announced plans for a series of ambitious new reforms that add to the level of uncertainty and may change the business environment for international firms. These reforms include an increasingly high profile crackdown on corruption, reforms in regulations that impact the role of state-owned enterprises, freedom of migration to large cities, a decreasing role of state-owned enterprises, and many other reforms that may significantly change the business environment in China.
Read the following three articles and do some of your own additional research on Walmart and the new environment in China:
Best, D. (Oct. 24, 2013). China: Walmart emphasizes plan to still expand in China. Just – Food Global News. [Available in ProQuest]
Evans-Pritchard, A. (Nov. 16, 2013). China strides towards free market future. The Daily Telegraph. [Available in ProQuest]
China’s Third Plenum: A Primer (Nov. 8, 2013) Voice of America News [Available in ProQuest]
China’s Bolsters Corruption Crackdown (Dec 13, 2012). Voice of America News / FIND. [Available in ProQuest]
After researching these issues, write a 4 page paper answering the following question:
How will the new reforms in China impact the success of Walmart’s expansion plans?
In your answer, consider the following issues:
The risks involved in expanding to China—include political and legal risks as part of your answer along with other risks that you think may be relevant.
How specific aspects of China’s reform plans and political changes will impact the business environment that Walmart will face. Include proposed regulatory reforms and the recent crackdown on corruption in China as part of your answer.
The potential benefit of Walmart’s expansion to China.
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