For multinational companies, the appraisal of China’s huge potential markets against the risks of
assaults on their competitive advantages needs reevaluation is an important consideration. An
important characteristic of multinationals are their investment in their intangible assets, such as
development and research, reputation, advertising and managerial skills which give them
competitive advantages over local enterprises’ knowledge of conditions and local markets.
Multinationals need strategies that protect their long term investments in intangible assets and
secure returns on investments. The Chinese market has several potential obstacles that effective
multinationals must consider. This article shows risks associated with doing business in China,
including copyright violations, market potential, corruption and politics. The article, in summary,
recommends effective strategies by multinationals operating in China.
In this study, foreign direct investment in China after they became a WTO member is explained.
This is followed by multinational companies expectations in China. This study shows examples
of intellectual property right and copyright violations. It also discusses regulatory risks and the
effects of politics, as well as corruption. Finally, it illustrates the competitive power of small
business networks in China.