International Business Operations Essay Example | Topics and Well Written Essays - 2500 words

International Business Operations - Essay Example ccording to the Wall Street Journal (2012), the increasing labor costs in China have influenced a decrease in market share and also rising competition from countries that have realized the potential that lies in manufacturing. Other than this, China’s labor providing population also lacks the necessary skills required in the diversified production market, hence pushing manufacturer’s to seek services from other countries. It is also difficult for foreign manufacturer’s to set up base in China because state-owned companies are the most dominant. The other aspect is likely to put China out of the manufacturing business is the fact that more and more countries are looking to set up their own manufacturing companies within themselves as a way of cutting down on production expenses. The shipping costs related to the exportation of raw materials that exporter’s haveto incur is one of the key aspects that countries have sought to override by failing to give China the manufacturing job. In my view, most of the competition that China is facing tends to be from Vietnam, Indonesia, and Bangladesh, which have taken up most of China’s market exports to the US for clothing (McCann 2011). In essence, the trading environment provided in other nations such as Vietnam have made America to shift their manufacturing interest from China because of the free trade agreements provided by the latter. In this regard, Vietnam has become the greatest gainer because most of the US investors such as Nike have made their established their manufacturing base because of the projected cost benefits that would come as a result of not operating in China. Therefore, Vietnam is the greatest competitor to China as they have also attracted investors in the electronics sector, which was China’s stronghold to companies such as Samsung and Nokia. On the other hand, China is also losing out its market share in the manufacture of automobiles to Mexico because of the competitive labor costs