7/31/2017 Case Study

International Business

Submitted To: Submitted By:

Neha Shrestha Amatya Kiran Rimal
Course Faciliator Section:- ‘A’
1. Discuss the impacts of china’s entry into WTO on india?

Possible answer:

China’s entry into the WTO opens up both opportunities as well as threats to the Indian industry.
Chinese entry shall increase the voice of developing nations in the WTO and can enable them to
have their demands of greater protection to domestic industries accepted. India and China
globally compete in the same export markets; Chinese entry shall make Indian exports
uncompetitive and threaten traditional Indian strongholds such as textiles, tea and jewellery.
There is also the fear that Chinese goods may flood the Indian markets causing domestic
producers to go out of business. This fear, based on current data is largely unfounded as there has
been no perceptible increase in inflow of goods form China into India since the easing of
Quantitative Restrictions, over one year ago. China is ahead of India both in terms of trade
openness as well as its promised commitment to further trade liberalization. China’s entry into
the WTO shall force Indian industry to become more competitive and shall pave the way for
second-generation market reforms in India. Labour market reforms, interest term structure
reforms and basic infrastructure reforms shall spur growth and competitiveness by cutting costs.
China’s huge market also becomes a potential market for Indian goods and increasing domestic
competitiveness can be leveraged by pushing exports. Thus the potential for Indian industry to
take advantage of the opportunity is large, but needs to be backed up with forward-looking
strategic policy initiatives form the government. In a rapidly globalizing world economy there is
no room for protectionism and industry must compete based on its inherent strengths. Thus
domestic industry needs reforms in market structure to spur competiveness..
China’s entry into the WTO is viewed in India as a mixed blessing. On one hand it helps India
lend voice to its concerns in the WTO on the issue of protecting domestic industry, but there are
also large downsides as our exports might become less competitive. There are also concerns that
Chinese goods would flood the Indian markets and spell doom for domestic producers. China’s
entry into the WTO also presents significant trade opportunities to India as it gains access to the
largest market in the world. Therefore, in order to maximize its gains, India must adopt a forward
looking strategy aimed both at neutralizing Chinese competition by making Indian goods more
competitive as well as pushing Indian exports into China.

2. What are the advantages and disadvantages for china of being a member of WTO ?

1. China's entry into the WTO will give fresh impetus to boost trade and economic cooperation
between the two countries..

2.China’s broad commitments in streamlining subsidies, lifting price controls, providing effectiv
e juridical procedures, making transparent the decisionmaking process, allowing greater participa
tion of the private sector in economic activities, will assist greatly China’s transition from a still
heavily regulated economy to a rules-based market economy.

3. The principle of the non-conditional most-favored-nation treatment of the WTO will be

applicable to trade between the two nations, removing a major political obstacle that stands in the
way of a steady and healthy bilateral trade relationship.

4.China will be cutting its tariffs on a broad range of products, from agricultural to industrial. Tar
iff reductions allow comparative advantage greater play.

5.It improves the overall environment in which China’s economy operates and in which China’s
foreign trade is conducted. e.g., possible increase of textiles and apparel exports due to the applic
ation of quota elimination and increased quota growth for China by restraining countries; a possi
ble rush of foreign investments into China, thus boosting employment and economic growth.
Disadvantage :-

1. High transparency give other countries a competitive edge.

2. High flow of FDIs in china

3.Threaten of traditional strongholds:-

Those stateowned enterprises that lack funding, technological innovation, scientific management
and economics of scale are bound to collapse. As a result, the state
owned enterprises are hard to survive in the fierce international competition.

4.China lacks experiences in dealing with the multilateral disputes and always fails to protect its l
egitimate rights and interests by using the regulations.

5.Making it more difficult for China to regulate and control the macroeconomics and to prevent t
he financial risks.

In a conclusion, entering WTO is a twoedged sword to China. China should take the initiative to
work out countermeasures to meet the challenges and take advantage of the opportunities in the
WTO
 Technology Transfer- a global phenomenon

1. Discuss how japan is one of the beneficiary technology transfer?

Possible answer

The transfer of the Western technology to Japan during the Meiji period gave the country the
opportunity to modernise its economy and evolve into a fully-fledged capitalist system. Whether
the transition from Tokugawa to modern Japan took place gradually or in leaps is a major issue
in Japanese economic history. Their acceptance was at least a disconnect between traditional
technology from Tokugawa period and Western technology because they derived from different
techno-cultural complexes. However, as discussed in this case the process of technology transfer
that began at before 18th centuary. We can also clearly recognise the continuous series of
changes in traditional industries or innovations in indigenous technology achieved through
absorbing selected elements of Western technology.

Technological advances in the weaving industry not only contributed to process innovation that
improved labour productivity, but also, and more importantly, to product innovation, which
created new fabrics and fashions. The weaving industry created new types of casual wear made
from printed flannels, Meisen silks and muslin by using Western technologies and inventions
such as chemical dying, silk spinning and worsted yarn, thus improving the quality and choice of
clothing available. Some of the direct benefits form the newer technology adaptation are:
1. Create economic of scale on production.
2. Make ease to competition to global market with new product and services
3. Derived to maximum use of resourcse in efficient ways, and improve productivity
4. Market impact,
5.Economic development,
6. Development of scientific and technical human capital, and
7. Opportunity costs considerations.
2. “Organization that has been using the latest technology have shown tremendous growth
compared to organization that resist to change. However, transfer of technology or
adaptation of newer technology is not an easy process.” Comment.

Possible answer

In 21st century, there has been tremendous growth of technology in service, production and in
different fields – which gives direct benefits and access the Economic of scale ,mass production
as well as efficiency on production. In simple way, the newer technology provide the abundance
of benefits for developing and developed country to perform the high risk associated and
prolonged task. For instance, we can take Japan, Hongkong and South Korea. If we look past 20
year these countries rely on agriculture and traditional sector, but today how far they are-we
cannot measure there pace of growth of country capacity-in term of GDP, revenue and
employment. All of these happens by their pure commitment and adaptation of new technology
with a great changes. they obvious the power of new concept and attitude of persistent towards
change.

Similarly, we can take other country for example like india and china. We see a lot of
development and employment create by technology. So, my thought absolutely began to fosture
that newer technology makes all things happen rapidly than ever. A part from that , the newer
way of doing job and performing same thing with limited manpower can save resources and
minimize the cost of production. Let talks about, those who resist to change, we may take Nepal.
We Nepalese are in back 19th century in term of technology adaptaion. we are lack of
specialization, manpower and skills labor supply and employment creation. Dependency and
imports was favor for all of us.

There is only one question why adaption was difficult ? copying other specialization is not
involve to operate with efficiency but what require is skills manpower and wills of connection to
diplomacy. If imitation will be easy all country do that , and now they will be on hight of
development. We may take example of phillipines, sudan, combodia and other nation -like those
under developing phase . They are lefted by newer technology due to political situation, lack of
commitment , resistance to change and habitant of traditional uses.