ABSTRACT

This chapter examines and discusses the various market entry strategies available to foreign manufacturers of consumer durable goods who wish to enter the Chinese market under the prevailing economic and political environment. China is one of the world’s fastest-growing economies. Efforts in 1988 and 1989 to deal with unacceptably high inflation caused a brief decline in growth to 4 per cent, but this was still ‘boom’ level by Western standards. Firms expanding into foreign markets will normally follow a recognizable path, the ‘internationalization process’, beginning with exports and then extending into other forms of international involvement such as licensing and foreign manufacture. China’s business environment is dynamic and fast-changing. Business enterprises need to monitor the following political, social and economic changes with great care in order to formulate an effective entry strategy. An understanding of consumer behaviour in China is also important when selecting a firm’s entry mode.