Table of Contents
1. Introduction ....................................................... 1
2. The Political System in China .................................. 2
3. Influence of China’s Political System on the Solar Industry .... 3
4. Modern Trade Theory and Application in China ................ 4
5. Cultural Considerations for Walmart in Japan .................. 5
6. Walmart's Competitive Advantages in Japan .................... 6
7. Institutional Effects on FDI in Japan ............................. 7
8. Benefits of FDI to Japan ......................................... 8
9. Conclusion ........................................................ 9
10. References ...................................................... 10
, 1. Introduction
This report explores the political and economic frameworks within which businesses operate
in China and Japan, specifically focusing on government intervention and foreign direct
investment (FDI). The Chinese government’s role in developing its solar industry is
examined through the lens of modern trade theory. Additionally, the case of Walmart’s entry
into the Japanese market is analyzed, highlighting cultural, institutional, and strategic
considerations that affect FDI.
1.1 Explain the political system followed in China.
(4 marks)
China follows a communist political system, which is characterized by centralized state
control, especially over the economy. The Communist Party of China (CPC) is the ruling and
dominant political force that influences all areas of governance, economy, and business.
Supporting statements from the case:
1. “China is both an emerging market and a rising superpower. Its leaders see the
economy as a tool to preserve the state’s power...”
2. “The long-term viability of the ruling Communist Party” is cited as a reason for
economic planning and control.
3. “Contrary to the approach of much of the world, which is moving more control to the
private sector, China has steadfastly maintained its state control.”
4. “The Chinese government owns almost all the major banks, the three largest oil
companies, the three telecommunications carriers, and almost all the media.”
These statements show that China's political system prioritizes state ownership and
planning over free-market mechanisms.
1.2 Explain the influence of the political system in China, as identified in
question 1.1, on conducting business in the solar industry of China.
(6 marks)
The political system in China greatly supports and accelerates the development of
targeted industries like solar energy by leveraging government resources, policies, and
financial systems.
1. Introduction ....................................................... 1
2. The Political System in China .................................. 2
3. Influence of China’s Political System on the Solar Industry .... 3
4. Modern Trade Theory and Application in China ................ 4
5. Cultural Considerations for Walmart in Japan .................. 5
6. Walmart's Competitive Advantages in Japan .................... 6
7. Institutional Effects on FDI in Japan ............................. 7
8. Benefits of FDI to Japan ......................................... 8
9. Conclusion ........................................................ 9
10. References ...................................................... 10
, 1. Introduction
This report explores the political and economic frameworks within which businesses operate
in China and Japan, specifically focusing on government intervention and foreign direct
investment (FDI). The Chinese government’s role in developing its solar industry is
examined through the lens of modern trade theory. Additionally, the case of Walmart’s entry
into the Japanese market is analyzed, highlighting cultural, institutional, and strategic
considerations that affect FDI.
1.1 Explain the political system followed in China.
(4 marks)
China follows a communist political system, which is characterized by centralized state
control, especially over the economy. The Communist Party of China (CPC) is the ruling and
dominant political force that influences all areas of governance, economy, and business.
Supporting statements from the case:
1. “China is both an emerging market and a rising superpower. Its leaders see the
economy as a tool to preserve the state’s power...”
2. “The long-term viability of the ruling Communist Party” is cited as a reason for
economic planning and control.
3. “Contrary to the approach of much of the world, which is moving more control to the
private sector, China has steadfastly maintained its state control.”
4. “The Chinese government owns almost all the major banks, the three largest oil
companies, the three telecommunications carriers, and almost all the media.”
These statements show that China's political system prioritizes state ownership and
planning over free-market mechanisms.
1.2 Explain the influence of the political system in China, as identified in
question 1.1, on conducting business in the solar industry of China.
(6 marks)
The political system in China greatly supports and accelerates the development of
targeted industries like solar energy by leveraging government resources, policies, and
financial systems.
