Motorola & Trade Relationship with China

1. It is in Motorola's best short-term interest to have a strong trade relationship with China because of the vast potential of the Chinese market. To help facilitate this, the company has an obvious interest in encouraging the government to renew or restore China's MFN status. The MFN status means that Chinese products enjoy lower tariffs that help those products compete in the American marketplace. If the MFN status is removed, because of civil rights violations, Chinese products would be relatively more expensive to American citizens.

The Chinese have suggested, although not stated outright, that continued large purchases from American companies (including, by inference Motorola) is dependent on the maintenance of the MFN status. In effect, officials in the United States (both private and government officials) are left with the impression that China would pull its considerable purchasing power from countries which do not extend favorable trade terms and give their business to those countries which do.

Despite the short-term benefits of Motorola lobbying on behalf of the Chinese, there are long-term ramifications and philosophical questions which are not so clear-cut. Perhaps the underlying question is one of philosophy and company culture: does Motorola want to conduct business with a government which advocates the shooting of its own citizens during a protest? Just as international business pressure was brought to bear in the case of South Africa, so Western busi

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ncentives to encourage that investment. Some of these incentives include simplified approval processes which greatly decrease the time and effort to obtain approval in the Chinese bureaucratic system. Another positive factor regarding Tianjin is its proximity to Beijing in the sense of Beijing being the nation's capital. Easy access to Beijing simplifies nationwide bureaucratic approval, which gives companies located in the area easier access to the nation as a whole as well as to the local market. However, there are drawbacks to Tianjin. For one thing, the population there is not necessarily as cosmopolitan as the population of Beijing, with the result that Motorola has to spend additional resources on training programs. The standard of living in Tianjin has also accelerated more slowly than that of the rest of the country. The region also has a reputation for taking a cautious and long-term approach to business, which may mean that the company encounters resistance to the high-technology products that it is introducing. In addition, although Tianjin is located within a relatively short distance of Beijing, having a presence in Tianjin is not the same as having a presence in Beijing, and the government approval time, whil

Category: Business - M