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Infrastructure doesn’t really matter as the people in China want to adopt western trend, but they are facing constraints while adopting it. The reason might by cultural.

Obstacles for MNE’s firms to invest in Chinese environment:

Political stability

This factor can be weakness, as there is no improvement in political aspect of country so there are no chances of MNE’s to innovate something new, or nothing such which is beneficial to MNE’s

Unsatisfactory foreign trade policy

Trade, tariffs, subsidies- aid and loans, custom valuation. Whereas regarding the quotas, MNE’s needs to consider- “Buy Local Legislation”, standards and labels, specific permission required, administrative delays, reciprocal requirements, restrictions on services. These factors are not up to certain limit to satisfy the Foreign firm.

Regulations not strictly implemented

Legal and illegal actions can take place while doing new business or continuing business. The laws which a business man is bound to follow, which are not being followed properly to maintain sustainability of economy.

Unsatisfactory banking system

The rates for interest, return on investment and etc., are not too enough for MNE’s to get its return with double profit. Even the facility of banking is not sufficient for the new company to enter in China and provide every information/database. This can be the important aspect to be a huge obstacles as employees of the company’s who has got bank account will not get up to the mark information, resulting failure.

The development of business related industry

China is huge in area, so in order to increase GDP, China is out sourcing too much to get the companies in to China for employment, high standard of living, good infrastructure etc.

Low productivity

Because of cheap labor and materials there are chances of doing fraud with public by providing them duplicate products and earn profit.

Risks for entering in to market and how to reduce the risks in host country:

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