Preparation Case

1. Notwithstanding challenging business conditions in China, do you think Australian business needs to exit Europe and America and focus on Asia? Justify your answer.

It would be a reasonable idea for Australian business to exit Europe and America as they are in weak economic conditions and focus on Asia as several Australian companies have already enjoyed success in China. Although there is no guarantee that the Australia will be successful in their investment in China and other Asian countries, however, due to their larger populations there is a larger market potential that will give Australia a larger chance at success in the long term.

2. How would you set about building relationships with Chinese counterparts in order to establish a business operation there?

In order to set a building relationship with China, Australia should see assistance from the Australia-China Gateway which is an organisation with offices in convenient locations; Melbourne and Shanghai which help in establishing operations in China.

3. Would it be better to invest in other Asian countries like India (with just as big a population)?

In the future it might be worthwhile for Australia to invest in other countries such as India; however, as there has already been progress and success, Australia would be better off investing in China for now.

4. What are the best investment strategies for Australian companies in China given the above case?

To start off, the best investment strategy for Australian companies would be the market entry strategy through global sourcing materials or servicing, exporting and importing products as well as licensing and franchising. If that goes well, the next step would be to use more direct investment strategies by establishing operations through joint ownership between Australian investors and local