,MNB3701 Assignment 2 (COMPLETE ANSWERS)
Semester 1 2025 (884546)- DUE April 2025
Government Intervention in China and Walmart
in Japan
Table of Contents
1. Government Intervention in China
o 1.1 Political System in China
o 1.2 Influence of the Political System on the
Solar Industry
o 1.3 Modern Trade Theory and Its
Application to the Solar Industry
2. Walmart in Japan
o 2.1 Factors Considered by a Walmart
Expatriate Manager
o 2.2 Advantages Walmart Needs to Compete
in Japan
o 2.3 Effects of Institutions on FDI in Japan
o 2.4 Benefits of FDI to Japan
Government Intervention in China
China is using its economic might to invest in Africa. China’s ability to
focus on dominating key industries inspires both fear and awe
throughout the world.
, A closer look at the solar industry in China illustrates the government’s
ability to create new industries and companies based on its objectives.
With its huge population, China is in constant need of energy to meet the
needs of its people and businesses.
As a result, the government has placed a priority on energy related
technologies, including solar energy. China’s expanding solar-energy
industry is dependent on polycrystalline silicon, the main raw material
for solar panels. Facing a shortage in 2007, growing domestic demand,
and high prices from foreign companies that dominated production,
China declared the development of domestic polycrastalline silicon
supplies a priority. Domestic Chinese manufacturers received quick
loans with favourable terms as well as speedy approvals from the
government. One entrepreneur, Zhu Gongshan, received $1 billion in
funding, including a sizeable investment from China’s sovereign wealth
fund, in record time, enabling his firm, GCL-Poly Energy Holdings, to
become one of the world’s biggest in less than three years. The company
now has a 25 percent market share of polysilicon and almost 50 percent
of the global market for solar-power equipment.
How did this happen so fast? Many observers note that it was the direct
result of Chinese government intervention in what was deemed a key
industry. Central to China’s approach are policies that champion state-
owned firms and other so-called national champions, seek aggressively
to obtain advanced technology, and manage its exchange rate to benefit
exporters. It leverages state control of the financial system to channel
low-cost capital to domestic industries—and to resource-rich foreign
nations whose oil and minerals China needs to maintain rapid growth.
Understanding the balance between China’s government structure and
its ideology is essential to doing business in this complex country. China
is both an emerging market and a rising superpower. Its leaders see the
economy as a tool to preserve the state’s power, which in turn is
essential to maintaining stability and growth and ensuring the long-term
viability of the ruling Communist Party.
Semester 1 2025 (884546)- DUE April 2025
Government Intervention in China and Walmart
in Japan
Table of Contents
1. Government Intervention in China
o 1.1 Political System in China
o 1.2 Influence of the Political System on the
Solar Industry
o 1.3 Modern Trade Theory and Its
Application to the Solar Industry
2. Walmart in Japan
o 2.1 Factors Considered by a Walmart
Expatriate Manager
o 2.2 Advantages Walmart Needs to Compete
in Japan
o 2.3 Effects of Institutions on FDI in Japan
o 2.4 Benefits of FDI to Japan
Government Intervention in China
China is using its economic might to invest in Africa. China’s ability to
focus on dominating key industries inspires both fear and awe
throughout the world.
, A closer look at the solar industry in China illustrates the government’s
ability to create new industries and companies based on its objectives.
With its huge population, China is in constant need of energy to meet the
needs of its people and businesses.
As a result, the government has placed a priority on energy related
technologies, including solar energy. China’s expanding solar-energy
industry is dependent on polycrystalline silicon, the main raw material
for solar panels. Facing a shortage in 2007, growing domestic demand,
and high prices from foreign companies that dominated production,
China declared the development of domestic polycrastalline silicon
supplies a priority. Domestic Chinese manufacturers received quick
loans with favourable terms as well as speedy approvals from the
government. One entrepreneur, Zhu Gongshan, received $1 billion in
funding, including a sizeable investment from China’s sovereign wealth
fund, in record time, enabling his firm, GCL-Poly Energy Holdings, to
become one of the world’s biggest in less than three years. The company
now has a 25 percent market share of polysilicon and almost 50 percent
of the global market for solar-power equipment.
How did this happen so fast? Many observers note that it was the direct
result of Chinese government intervention in what was deemed a key
industry. Central to China’s approach are policies that champion state-
owned firms and other so-called national champions, seek aggressively
to obtain advanced technology, and manage its exchange rate to benefit
exporters. It leverages state control of the financial system to channel
low-cost capital to domestic industries—and to resource-rich foreign
nations whose oil and minerals China needs to maintain rapid growth.
Understanding the balance between China’s government structure and
its ideology is essential to doing business in this complex country. China
is both an emerging market and a rising superpower. Its leaders see the
economy as a tool to preserve the state’s power, which in turn is
essential to maintaining stability and growth and ensuring the long-term
viability of the ruling Communist Party.
