Explain the concept of guanxi . Why is it so important to businesses operating in China ? How did McDonald ’ s lack of guanxi raise its costs of doing business in China ? ( TCO 3 ) In 2006 , two Chinese journalists reported that the working conditions at Hongfujin Precision Industries where Apple ’ s iPods are produced were substandard . According to the report , not only were workers at the plant poorly paid , but they were also forced to work overtime . Apple immediately responded to the allegations and audited the factory in question . However , managers at the factory filed a defamation lawsuit against the two journalists . Despite the fact that Apple ’ s audit did indeed show substandard working conditions at the factory , Hongfujin did not withdraw the lawsuit . Eventually the Reporters Without Borders group took up the case for the two reporters and the lawsuit was dropped .
Should Apple be responsible for ensuring that its suppliers are safeguarding the basic rights and dignity of its employees ? How can Apple be sure that its suppliers do not employ sweatshop labor ? ( TCO 3 ) Exports are largely responsible for China ’ s recent rapid economic growth . The country , capitalizing on its cheap labor force , has focused on converting raw materials into products that are exported to developed countries such as the United States . In 2008 , China ’ s trade surplus was a record $ 280 billion , and its holdings of foreign exchange reserves were over $ 1.95 trillion . Some critics have suggested that China is following a neomercantilist policy . Are the claims that China is following a neomercantilist policy valid ? Why or why not ? ( TCO 4 ) For years , Japan has been relatively closed to significant foreign direct investment , but more recently the government has changed its policy and actually now encourages inward investment . Wal-Mart , taking advantage of this shift in policy , acquired a large Japanese retailer in 2002 . Wal-Mart ’ s initial venture into Japan has been challenging and has forced the company to change its approach to better compete with local retailers and meet the needs of Japanese consumers .
Why did Japan change its position on inward foreign direct investment ? How will Wal- Mart ’ s investment benefit Japan ? ( TCO 7 ) Which of the following are true about the International Monetary Fund ? ( TCO 5 ) Concerning European Union ’ s progress toward creating a single financial market , the quest started in 1999 was to have been completed by 2005 , however , progress has been slowed by various factors related to the tradition of each member country operating autonomously . By 2007 , significant progress had been made . Some 41 measures designed to create a single market were in place and others were in the pipeline . The current issue facing the EU revolves around the enforcement of the rules that have been established as law . Some experts believe that it will be at least another decade before the benefits of the new rules become apparent . Discussion of this feature can begin with the following questions . What are the benefits of creating a single financial market in the European Union for companies ? Does it make sense for consumers ?