Topic > Walmart and the Chinese case - 1132

The proposed reforms go against decades of how business has been conducted so far and if there is no consensus among members of the political system the reforms are doomed to fail. According to Rao (2012), international businesses may face political risks when changes in government policies occur. An indicator of political instability is corruption (Rao, 2012). Although corruption already exists in China, its increase could be a first sign of what will happen in the future. If the crackdown on corruption proves effective, China could attract additional international business, increasing the competition faced by Walmart. One proposed method for reducing corruption is to allow for greater transparency within the political system (“China Strengthens Corruption,” 2012). Transparency International uses corruption and transparency monitoring, as well as other areas, to determine a country's Corruption Perception Index (CPI). As the CPI falls, the likelihood of foreign companies starting to set up operations in China increases