Although China is a communist state and the Western democracy does not exist in the country, the fact is that the political atmosphere in China is quite conducive to multinational companies (CIA, 2011). The country that started the process of deregulation and transition towards market economies has formed different laws and adopted macroeconomic measures that in turn support foreign investment in the country (Federal Research Division, 2007). Due to this reason China is regarded as the largest country that attracts the most of foreign direct investment (Hen, 2004).
China has accomplish some major milestone particularly after its decision to join WTO and although during the last five years the world as a whole has been suffering from severe depression, the fact is that China has maintained a very healthy growth and the during the last year the economic growth in the country has been estimated at 10.3 percent while the total GDP of the country has been estimated at 9.872 trillion USD during the year 2010 (CIA, 2011). The manufacturing and service sector are the two most rising sector with total share of 46.8 percent and 39.5 percent respectively (Index Mundi, 2011). The employment rate in the country is quite high as the unemployment rate in the country is below 4 percent (CIA, 2011).