Reference no: EM132238718

Repond in 175 minnimum to the below argument, donot summarize

Pros of business in Mexico include an open economic environment with a majority of imports tariff free. Geographically, Mexico's proximity to the US and their free trade agreements established with over 40 countries present attractive advantages to firms (Peng, 2015). Mexico has relatively low wage levels in exchange for skilled labor.

Cons of business in Mexico include the high risk of corruption and crime with drug and gang violence, and their dependence on the US market making them vulnerable to economic changes (Nordea, 2019).

The pros of business in China include its close proximity to emerging Asian markets, along with the largest domestic market in the world. They also have extremely low labor costs (half that of Mexico) and an open market economy.

Cons consist of their changing legal environment, lack of spending within their domestic market culture, and weak intellectual property protection (Nordea, 2019).

While China may offer lower labor costs, companies must consider all elements that impact a product and successful operations. Shipping costs and times must be considered and compared to criticality of order timeline, along with ease of communication and volatility of the product line (Smith, 2006).

References

Nordea. (2019). Foreign direct investment (FDI) in China.

Nordea. (2019). Foreign direct investment (FDI) in Mexico.

Peng, M. (2015). Global Business (4th ed.). Boston: Cengage Learning

Smith, J. (2006, July 6). Is China Always the Answer? [Word document].