One of the benefits that have been associated with doing business in Mexico is the low cost of labor that has attracted a significant number of foreign investors. Mexico is one of the countries with the highest number of qualified and unemployed youths in the world; this has led to increased migration of Mexican Nationals into foreign nations in order to seek employment opportunities (Hill 15). Low cost of labor is also a beneficial factor associated with doing business in China. China has become a fierce competitor to Mexico in terms of provision of low cost of labor. However, the cost of labor is relatively lower in Mexico by about 20 percent compared to (China Hill). Moreover, Mexico is one of the nations with the highest number of free trade agreements, that is, about 17 agreements with over 48 countries (Stevens 7).
On the other hand, doing business in China is considered beneficial considering the fact that the Chinese market is dynamic and provides a broad platform for local and foreign investors to offer services and products to their clients. Moreover, the Chinese market is characterized by rapid growth as well as the stability that make it favorable for both local and multi-national businesses.
Cons of Doing Business in Mexico and China Respectively
The main disadvantage of doing business in Mexico has been associated with the peso crisis. This has hurt the purchasing power of local consumers, hence causing a threat to the sustainability of foreign as well as local companies (Stevens 11). In regard to doing business in China, stakeholders have argued that the major drawback associated with this market is that the Chinese economy is rising rapidly and is stable making it favorable for rapid development of local SME’s and other major local companies, hence increasing competition for foreign firms. Furthermore, local Chinese companies have been associated with developing counterfeit products, particularly products that are produced by international or foreign company (Drawbacks to Doing Business in China). The products are usually sold at abnormally lower prices, thus, increasing completion for foreign companies (McFarlin and Paul 13).
Works Cited
"Drawbacks to Doing Business in China." The Seattle Times. 2010. Web. 22 Feb. 2016. <http://www.seattletimes.com/business/drawbacks-to-doing-business-in-china/>.
Hill, Charles WL, Thomas Cronk, and Rumintha Wickramasekera. Global business today. McGraw-Hill Education (Australia), 2013.
McFarlin, Dean, and Paul D. Sweeney. International Management: Strategic Opportunities & Cultural Challenges. Routledge, 2014.
Stevens, Robert E., et al. Doing Business in Mexico: A Practical Guide. Routledge, 2012.
