China's Open Door Policy Essay

China is quickly becoming one of the world’s fastest growing economies in the world. With its rapid population increasing each year, it would seem plausible for them to have a fast growing economy. With that in mind, many foreign businesses have been looking into either investing in China or opening foreign businesses within it. Due to the high population it would be a given for them in that fact that there is high number of laborers and well as a cheaper cost for production of goods. This cost of production to labor ratio is an important factor for foreign businesses to take part in China’s growing economy.

Ever since China open its doors to the outside world, it has widely become a fighting space for foreign investors and business to raid in and take advantage of the vulnerable but growing economy, during that period. This has led to China today being one of the highest countries with foreign investments. Before China’s Open Door Policy in 1979, China was in a crucial point in trying to grow its economy. Balancing out the growing population and the need for jobs led to the idea of foreign investors and opening their doors to the rest of the world.

The Open Door Policy of 1979 plays a key role in modern Chinese Economy. During the 1930s, China started developing a modern industrial sector, which started to increase the economic growth. The economy largely deteriorated by the Great Leap Forward famine which killed between millions of people, and with the Cultural Revolution it further interrupted the economy. After Deng Xiaoping took power was when there was a widespread implementation of economic reforms which was mainly due to the creation of the Open Door Policy.

With the Open Door Policy there was a pour in of foreign inv...

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...ing at both case studies, it can be seen that when foreign businesses try to enter a market like China, it is very important to study not only the culture norms of the consumers but also the business ethics of the country. By looking at Wal-Mart’s success it can be seen that because Wal-Mart has started changing its ways in approaching it consumers has lead it to being able to open more stores throughout China. Such as selling goods that are more common or need in a certain province than in others. While for Home Depot, the reason it was not successful was due to its approach to the Chinese consumers. Due to it already having its ideal of what kind of retailer it was, made it harder for them to cater towards the Chinese shoppers. This is partially due to the reasoning that Chinese consumer ethics and shopping styles are different of those here in the United States.