Chapter 15, Problem 12CSQ

Explanation of Solution

Political obstacles for foreign companies to do business in China

• The main political obstacle is the Great Firewall of China which is a combination of legislation and technologies to regulate the Internet domestically in China.
• China blocks access to select foreign websites such as Google, Snapchat, Facebook, Twitter, and the New York Times and can slow down cross-border Internet traffic.
• China limits access to foreign information sources, blocks foreign Internet tools such as Google search and mobile apps, and requires foreign companies to adapt to domestic regulations.

Cultural obstacles for foreign companies to do business in China

• Credit cards never became widely used in China.
• Discretionary spending was also not really possible for many Chinese companies, and there has been a longstanding cultural aversion to debt...