Department of Political Science

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Browsing Department of Political Science by Author "Areff, Sameer"

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    Foreign direct investment by South African companies in the Peoples Republic of China : opportunities and risks
    (Stellenbosch : Stellenbosch University, 2003-04) Areff, Sameer; Davies, M. J.; Stellenbosch University. Faculty of Arts & Social Sciences. Dept. of Political Science.
    ENGLISH ABSTRACT: The study addresses the topic of foreign direct investment in the People's Republic of China (P.Re.) by South African companies, focusing on opportunities and risks in the context of 'South-South Co-operation' between the P.RC. and South Africa. Relations between the two developing countries have only been forged since January 1998 when South Africa recognised the P.RC. government as the dejure representative of China. With the Chinese market of 1.3 billion potential consumers proving to be a lucrative opportunity for all international, multinational and transnational companies, it is imperative for South African companies to gain a foothold in the Chinese market. Therefore, entry requirements as well as impediments that could emerge have to be scrutinised. Analysis of governmental relations currently being forged between the two states is assessed as well as the wider context of 'Sino-Africa' co-operation. China's recent entry into the World Trade Organisation (WTO) has and will continue to have a substantial effect on the international trading system. The implications of this for South African companies is given considerable attention in order to highlight resulting opportunities. Apart from assessmg the current state of relations and identifying investment and business opportunities, the study also focuses on the method of conducting business in China which has highly complex rules and regulations for companies entering the P.RC. An analysis of the different modes of entry is conducted, coupled with a focus on the cultural sensitivities and norms that are associated with building relationships when negotiating possible business partnerships. The study finally identifies potential risks that foreign direct investors need to continually assess, namely, the transfer of political power to a new generation of relatively young leaders, corruption that is spreading within China and the restructuring of State Owned Enterprises (SOE's) and the inevitable consequence of job losses.