china

Question 1

positive effects for UK businesses (asean/china)

Answer 1

• larger export market in which to export their luxury goods
• can learn from the production processes of Chinese businesses
• investment chinese businesses provide may keep shopping struggling UK businesses stable
• raw materials may be cheaper due to lower production costs in these countries
• asean/china have access to newer technologies, allowing for better quality products to be manufactured and used in UK production processes

Question 2

negative effects for UK businesses (asean/china)

Answer 2

• cultural differences could make trading problematic (eg testing on animals law)
• transportation costs will be high given the far distance
• less customers want UK to trade with asia given the increased carbon footprint of doing so
• language and currency differences may reduce success of international trade
• buying power of chinese businesses may leave UK businesses vulnerable to a takeover (eg. in recent years $6 billion into weetabix and BP so unable to compete with high investments)
• may have to lower prices to compete with chinese/asean businesses