In a brief essay, describe the political and legal systems in China and their effect on MNEs doing business in China.
Answer: China applies state capitalism whereby the government manipulates market activities to achieve political goals. Consequently, MNEs doing business in China often find themselves at a disadvantage. Incorporating in China requires telling the government—in excruciating detail—who you are, what you want to do, how you plan to do it, how much you intend to invest, and how many jobs you will create. China's political and legal systems impose many time-consuming tasks on MNEs. Moreover, China tends to stack the odds against foreigners who are bold enough to forge ahead in the face of an elaborate government bureaucracy and a fledgling legal system.