Reference no: EM132176964

Debate Merits of Doing Business with either China or Mexico

Discuss the pros and cons of doing business in Mexico and China respectively.

I can think of many pro scenarios doing business with Mexico if your company is a U.S company, I will give you three. The first one would be logistics, Mexico is an obvious border country and the cost of shipping and transportation is going to be cheaper than doing business abroad. The second would be lower political risk and low protectionism and favored free trade policies. This is a pro-business concept, especially if you are comparing doing business with a Country like China. The third pro would be low labor rates.

One of the cons with doing business with Mexico would be the current tension between the U.S and Mexico with the White House threatening to break up NAFTA trade agreement. This creates a higher political risk while doing business with Mexico. A second con would be the instability of the Mexican Government, certain factors of the Government have been known to contain corruption. Government bribes maybe a part of doing business in Mexico.

Some of the pros of doing business in China would be low labor and their manufacturing capabilities. The Chinese worker is loyal and dependable. You get more choice of manufacturing capabilities as well. If you are already selling product in that part of the world, then a manufacturing plant over in China would save you logistic costs on transportation and shipping.

The cons of doing business in China are tariffs which can be levied against your company due to the current potential trade war going on between U.S and China. One big con that seems to be a recurring problem, is the theft of intellectual properties from China on U.S patents and innovations. You also have to deal with a regulatory government and in many cases will need an affiliate partner to help navigate this con.