China Joined The World Trade Organization Essay
Analysis of Environments
China joined the World Trade Organization on December 11, 2001. This opened them up to foreign trade because they agreed to abide by the global trade rules that had been established by the World Trade Organization (WTO). These new rules and regulations were in many ways very different than how China had been dealing with businesses both foreign and domestic. After being accepted to the WTO, China’s barriers to entry were greatly reduced allowing many companies to now compete in the Chinese market.
Prior to entering the WTO, foreign firms were held to strict guidelines and were limited to certain sectors within China. They had to deal with many constraints and obstacles, most of which had to deal with the legal system. This includes informal constraints embodied in traditions, taken for granted conventions and subconsciously accepted rules and customs. China had based its government structure highly off of cultural elements and it was more about who you know than what you know.
One of the ways this played a major role in business was through the many different committees designated to ensure you were up to code in each aspect of your business. The way that they conducted these inspections often times was to show up at 6pm on a Friday for their “inspection”. They would then be taken out by an individual within the company. This individual was designated by the company to maintain good relationships with these individuals.…