Swire Pacific Ltd is a family business, publicly quoted and operating in China during the reversion from British to Chinese rule. The company has five operating divisions, aviation, property, marine services, industrial and trading. In 1997, the company was caught up in the Asian financial crisis as well as the world economic meltdown in 2001. Although China had tried to restrict trade with foreigners, they failed after opium wars and lost ownership of Hong Kong (John et al. 141). China gained back the areas under British rule after the 99-year lease was over and adopted a two government system after signing the Sino-British Joint Declaration.
The highlights of the case include the unstable economic environment that businesses faced in China in late 1900,s and early 2000,s. The history of how China had reservations when dealing with foreigners and mostly restricted trade to Canton. Another highlight is how China engaged in opium wars that led to the British gaining control over Chinese land beginning from 1898. Britain leased the land for 99 years and near the end of the term the British government initiated talks with the Chinese government which led to the signing of the Sino-British Joint Declaration. Although the government of China gained back Hong Kong, it would allow it to operate under a different political regime separate from the rest of China until 2047.
The case study shows that China was not an exception and felt the impact of the Asian financial crisis as well as the world economic downturn. Although China tried to protect itself from the dangers that would result from allowing foreigners into their country, they failed. Initiating the negotiations before the lease term came to an end was important because it affected many property and business owners. It would be recommended that the Swire Pacific Ltd take advantage of the more stable political environment that resulted after 1997 compared to the previous regime to further its business endeavors.
Work Cited
John Daniels, Lee Radebaugh and David Sullivan. International Business: Environments & Operations (14th ed.). Upper Saddle River: Prentice Hall, 2012. Print.
