External business environment - trading blocs, ASEAN and China

Question 1

Positive effects for UK businesses

Answer 1

• inward investment, investment China provides to UK businesses expected to pass £105b in emerging energy, property and transport sectors by 2025
• cheaper materials, lower minimum wage so cheaper production. Average in China £0.79 as oppose to £6.50 in UK
• production processes, China manufactures 90% of world’s computers meaning they have largest knowledge on how to manufacture, technology transfer to UK businesses
• large market, China has 1.4b, rest of ASEAN adding 380m

Question 2

Negative effects for UK businesses

Answer 2

• price wars, wage and manufacturing costs lower leads to UK businesses having to lower prices to compete with Chinese/ASEAN businesses
• buying power, leaves UK businesses vulnerable to takeover, Chinese firm bought out Pizza Express in July 2014
• corporate culture, problematic due to trade with due to local customs and cultures, no tardy appearances, late time keeping and different language
• transport costs, 5000 miles between China and UK, expensive and enivornmentally bad, also long time to transport

Question 3

Description/timeline - ASEAN

Answer 3

• 1967 greenest with Indonesia, Malaysia, Philippines, Singapore, and Thailand
• Also joined was Brunei, Vietnam, Myanmar, Cambodia

Question 4

Description/timeline - China

Answer 4

• in 2015, ASEAN, China, Korea, Japan, Australia, New Zealand and India concluded free trade agreement