Write a Letter Requesting a Donation :: Donation Letter Security Safety

October 1, 2002 To Customer List Customer Address Line 2 Customer Address Line 3 Customer Address Line 4 Dear [Customer Name]: Will You Join Me In Protecting Our Community? I am sending this to you as a fellow member of the Rolling Acres community. I'm sure that you value living in a quiet and peaceful neighborhood, just like I do. You know, sometimes in order to keep one's community "quiet and peaceful" one has to take action. That's what this letter is all about - taking action - community action. By now, via media reports and word of mouth you must be aware of the significant increase in house break-ins in this neighborhood over the past couple of years. In fact, the break-in rate has more than doubled over the past three years. According to the police this is just a sign of the times changing as the economic downturn continues and local businesses and factories continue to close their doors for good. As you may know, a local Community Action Committee has been meeting over the past four months to try and find ways to reduce the break-in rate in Rolling Acres. Last week they released their recommendations on how to best combat the problem. Their primary recommendation calls for increased police and security patrols to supplement the local Neighborhood Watch program. They estimate that the extra cost to double nighttime (after dark) security patrols by Security Inc. will be in the range of $14,000 to $19,000 per year. Unfortunately, this amount is not included in this year's municipal budget allocation and there are no additional funds available to us. Therefore, as a concerned member of this community I have decided that my business will take the lead in assisting with this year's security control budget. Accordingly, Bubbas's Hardare will donate $1 for every $2 raised in the community to cover the additional security costs. I urge you to join me today in supporting this worthy cause for the common good of our community.

STP analysis on sunsilk Essay

We would like to take this opportunity to thank you for the guidance and support you have provided me during the course of this report. Without your help, this report would have been impossible to complete. To prepare the report we collected what we believe to be most relevant information to make our report as reliable as possible. We have concentrated our best effort to achieve the objectives of the report and hope that our endeavor will serve the purpose. The practical knowledge and experience gathered during report preparation will immeasurably help in our future professional life. We request you to excuse us for any mistake that may occur in the report despite of our best effort. We would really appreciate it you enlighten us with your thoughts and views regarding the report. Also, if you wish to enquire about an aspect of our report, we would gladly answer your queries. Executive Summary Unilever is an Anglo-Dutch company, with a history of grand operation, on which it has gradually built its capital. Today it owns most of the world’s consumer product brands in food, beverages, cleaning agents and personal care products. Unilever Bangladesh Ltd is one of the world’s most successful fast moving consumer goods manufacturing companies with local manufacturing facilities, reporting to regional business groups for innovation and business results. Unilever brands are trusted everywhere and, by listening to the people who buy them, they’ve grown into one of the world’s most successful consumer goods companies. In fact, 150 million times a day, someone somewhere chooses a Unilever product. Unilever Bangladesh Limited has five departments to carry out all the organizational functions. Our report is on â€Å"STP Analysis on Sunsilk†.This report is designed in three chapters. Initially the opening words about the report were described in the first segment titled â€Å"Introduction† where we discuss about â€Å"Overview of Unilever† contains the history of Unilever, Unilever Bangladesh Ltd, and Organizational structure. Next chapter is on STP analysis. And in last part we give the conclusion and Bibliography. Introduction: The main objective of this report is to have an assessment about STP analysis. How they manage all their market segmentation, Target market and their positioning. Here we give brief idea about the company, industry and product. Company Overview: Unilever is a corporation, formed of Anglo Dutch parentage that owns many of the world’s consumer brands in foods, beverages, agents and personal care. It was created in 1930 by the merger of British soap Brothers and Dutch margarine producer Margarine Unit. In the 1930s the business of Unilever grew and new ventures were launched in Latin. Since then Unilever has made tremendous growth, going through economic crises like the First  World War and the Great Depression. Today the company is fully multinational with operating companies in over 100 countries, employing about 179000 employees. With the onset of the 21stcentury, Unilever implemented a strategy known as ‘Path to Growth’ to transform business and to launch their Vitality mission. With 400 brands spanning 14 categories of home, personal care and foods products, no other company touches so many people’s lives in so many different ways. 150 million times a day, someone somewhere chooses a Unilever product. From feeding one’s family to keeping one’s home clean and fresh, Unilever brands are part of everyday life. Unilever’s mission is to add Vitality to life. It meets every day needs for nutrition; hygiene and personal care with brands that help people look good, feel good and get more out of life. Here we give the SWOT analysis of Unilever: SWOT analysis: The following SWOT analysis captures the key strengths and weaknesses within the company and describes the opportunities and threats facing Unilever Bangladesh Ltd. Strengths: †¢In depth industry experience and insight †¢Largest amount of share in the market †¢Having a good number of established brands †¢An excellent distribution network †¢Competitive advantages Weaknesses: †¢Reliance on outside raw materials †¢So many substitutes available in the market †¢Lack of control in the market. If any disruption arises between company and distributor then the whole market suffers. †¢Lack of informational reliability, since the market is too large Opportunities: †¢Participation within a growing industry †¢Utilization of changing lifestyle of people for increasing demand †¢Scope of expanding the market vertically and horizontally †¢Application of new tactics and surprise packages †¢Niche marketing Threats: †¢Threats of the market challengers †¢A negative effect on people’s spending because of the current financial crisis †¢Existence of political unrest though out the country The motto of Unilever is to hold its strengths the longest time possible. It is also working constantly with a view to using its opportunities at best. In spite of being the market leader Unilever Bangladesh has some weaknesses and threats. Its research department is working hard to make strategies to overcome those weaknesses and threats. Product Overview: Sunsilk is a hair care brand, primarily aimed at women, produced by the Unilever group, which is now considered the world’s leading company in hair conditioning and the second largest in shampoo.Sunsilk is Unilever’s leading hair care brand, and ranks as one of the Anglo-Dutch conglomerate’s â€Å"billion dollar brands†. Sunsilk shampoos, conditioners and other hair care products are sold in 69 countries worldwide. Sunsilk is sold under a variety of different names in markets around the world including Elide, Seda and Sedal. The brand is strongest in Asia, Latin America and the Middle East and is the number one hair care brand in India, Brazil, Argentina, Bolivia, Bangladesh, Sri Lanka and Thailand. Sunsilk was launched in the UK in 1954, and by 1959 it was available in 18 different countries worldwide. At the time, Sunsilk had an advantage over other shampoos in the market as it only needed one application, and so meant washing less natural oils from the hair. Sunsilk  cream shampoo for dry hair was launched in 1956 and from 2009 Sunsilk started working with a number of professional hair â€Å"experts† to develop new and improved products. Each hair â€Å"issue† variant links to an â€Å"expert† with the relevant specialist hair knowledge. For example, Dr Francesca Fusco, a New York dermatologist, co-created a â€Å"hair fall† variant for the brand. The lineup also includes: Jamal Hammadi for Black Shine, Rita Hazan for Vibrant Color, Teddy Charles for Plumped up Volume, Thomas Taw for Damage Reconstruction, Ouidad for Defined Curls and Yuko Yamashita – inventor of Japanese hair straightening process ‘YUKO’ – for Perfect Straight. Due to need of shampoo for oily hair and dandruff unilever launch a new variant of Sunsilk having citrus extracts. The range consists of Sunsilk: Yellow Sunsilk with Bio Proteins from Vegetable Extracts: Normal hair needs wholesome nourishment. New Sunsilk with Bio Protein extracted from Vegetable milk has nutrients that deeply penetrate each hair strand, to nourish it leaving hair strong and beautiful. Black Sunsilk with Melanin from Plant Extracts: Dull hair needs a rich black shine. New Sunsilk with Melanin extracted from plants serves this purpose very effectively. It helps in the growth and retention of the black color of hair, giving it a rich black shine. Green Sunsilk with Fruitamins Vitamins from fruit Extracts: Thin and limp hair needs extra body and volume. New Sunsilk with Fruitamins has natural extracts from fruit that contains Vitamins. These vitamins help in giving extra body, shine and amazing manageability to the thinning and lifeless hair. Pink Sunsilk with yoghurt proteins: Dry hair needs wholesome conditioning, extra shine and style. New Sunsilk with yoghurt proteins makes the dry hair full of life. Its especial ingredients moisturize each hair right to its tips leaving it shiny and beautiful. Orange Sunsilk with active nutrients from Citrus Extracts: The advanced formula of orange Sunsilk is the result of the latest research. This shampoo is especially designed for oily hair type that looks flat and greasy due to the excess of moisture. New Sunsilk with active ingredients from citrus extracts cleans the excess oil off hair while its nutrients deeply penetrate each hair strand to nourish it. Industry Overview: In Bangladesh many brands are available in shampoo category. Unilever, Square Toiletries and P&G are the leading brands. Unilever produces Sunsilk and Clear, Jui is produced by Square and Pantene and Head & Shoulder produced by P&G. Moreover, there are some low brands which are operating in Bangladesh. Unilever grab the highest market share and in the leading position. Figure: Market Share STP Analysis: Segmentation: Geographic Segmentation Sunsilk ignored geographic segmentation for product; sunsilk segmented the market based on intermarket segmentation. But sunsilk segmented the market based on geographic segmentation for advertising, promotion and sales efforts. Sunsilk divided the market into three groups. 1. European countries 2. Middle-East countries 3. Asia pacific countries In those segment advertising, promotion and sales efforts should be different. Demographic segmentation Gender Sunsilk divided the market into two groups based on gender. 1 Male consumer 2 Female consumer Age and life cycle stage Consumer needs and wants change with age. Sunsilk divided the female consumer market into three groups based on age. 1. Market segment of female age 16-21 2. Market segment of female age 22-40 3. Market segment of female age above 40 Income Sunsilk divided the market based on income. They divided the market into three groups based on income. 1. Upper class 2. Middle class 3. Lower class Psychographics: Social class Initially they launched sunsilk black shine mainly for higher class people and to some extent middle class people. Then, they launched mini pack for the lower class people. Behavioral: Benefit Benefit is a factor which effect on buying decision. Sunsilk divided the market into five groups based on benefits. Each segment required difference benefit. 1. Segment â€Å"A† (who need nourishment for normal hair) 2. Segment â€Å"B† (who need a rich black shine for dull hair) 3. Segment â€Å"C† (who need extra body and volume for Thin and limp hair) 4. Segment â€Å"D† (who need conditioning, extra shine and style for dry hair) 5. Segment â€Å"E† (who need oil free hair for oily hair type that looks flat and greasy due to the excess of moisture) Market Targeting Market segmentation reveals sunsilk’s market segment opportunities. In this stage sunsilk had to evaluate the various segments and decide how many and which segments it could serve best. Evaluating market segments Sunsilk mainly targeted the female segment and ignored the male segment. At first, sunsilk targeted tow segments of female consumer which was segment of female age 16-21 and segment of female age 22-40, but in their promotional activities they focused on all female segments. Sunsilk targeted those segments because those segments were the largest, profitable and there was no strong and aggressive competitor. After, sunsilk targeted the five segments of benefit and they lunched separate product for each segment. Undifferentiated marketing At first, sunsilk used undifferentiated marketing or mass-marketing strategy and they ignored market segment difference and targeted the whole market with one offer. Differentiated marketing Sunsilk also practice differentiated marketing strategy, they targeted five segments of benefit and they brought variety in their product. They lunched five varieties product for whole market. Sunsilk target five segments and designed separate offer for each segment. Positioning: Sunsilk is already a renowned brand in the shampoo industry. As we mentioned in the earlier part of the report, they segmented and targeted their market very carefully. We give the customers more benefits with same amount of price. We try to give the best to the customers. More for More More for same More for less Same for less Less for less For positioning our product our tagline will be â€Å"We care about your feeling† Positioning Statement: â€Å"To the young and middle age women, who have dull, oily, rough and dry hair, our sunsilk is hair solution that offers stylish, shiny, strong and oil free hair related to the competitors.† Conclusion: Sunsilk is a most prominent shampoo brand in the market. Now, it is consider as a market leader based on market share and the market size. Manufacturer of leading brands, including Fair & Lovely and Lipton Tea, Our brands help people to look good, feel good and get more out of life. Celebrating life  for over 40 years and today, a company bringing world class consumer products to millions of people in the country we are Unilever.

The Fdi Policies Of Indian And China - Free Essay Example

Sample details Pages: 23 Words: 6767 Downloads: 4 Date added: 2017/06/26 Category Statistics Essay Did you like this example? Chapter à ¢Ã¢â€š ¬Ã¢â‚¬Å" 1: Introduction 1.1. Overview Foreign Direct Investment is a hot topic in most policy circles as it is associated in many instances with significant macroeconomic changes and improvements in the range of goods and services produced in recipient countries. Furthermore growth in recipient countries is often ascribed to these inflows and so competition for higher inflows of FDI has become competitive. Don’t waste time! Our writers will create an original "The Fdi Policies Of Indian And China" essay for you Create order Most of the developing and developed countries increase their economy by enhancing their share in the global market through FDI inflows. As FDI shows more impact on the countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s economy, most of the foreigners are investing their amount in other countries for improving their profits with less manpower and minimum initial cost. These inflows were easily achieved by the investors by just fulfilling their basic requirements and maintaining their policies. FDI can be used by the countries only when they meet some of the major requirements like transfer of capital, a source of funds for foreign operations, Control investment and a balance of payments flow (Nicolas, B., 2010). Even though the FDI inflows in developing countries are low that is nearly 5%, this shows more impact on the economy in terms of the development programs by introducing new technologies. This change will be occurred only in the surroundings of investment areas. Here, in this research the FDI inflows between India and China are studied by comparing both the countries. Further of this study clearly explains the various aspects that are considered by the India and China for increasing the FDI inflows in the global market and also illustrates the policies that are followed by China as most of the investors prefer China when compare to the India. Finally, it recommends some of the policies and the changes that need to be made by the Indian Government for improving its FDI inflows. 1.2. Aim and Objectives Aim: To study the variations between the FDI policies of Indian and China based on their inflows and overall performance of the economy. Objectives: To study the importance of FDI and the required fundamental policies for acquiring the FDI. To research on the impact of FDI inflows in India and China based on their overall performance. Identifying the possible steps for Indian policy makers for improving their FDI inflows. Statistically evaluating the comparison between India and China in terms of FDI inflows. 1.3. Purpose of Study This study mainly focuses on the Foreign Direct Investment, the role of FDI in India and China and also illustrates the comparison between these two countries in terms of FDI. This research is selected in order to know more about the investments made by the developing countries and the involvement in international financial banking markets to influence the global and political aspects. This study is mostly useful for the people who are willing to know about the role played by FDI in the fast growing countries like India and China where these two countries differs in their environmental conditions. While researching about the FDI in both countries, one can easily analyze that China is showing more interest in attracting the FDI and is leading their economy when compare to India. So in order to clearly investigate on this point, this study also focuses on the aspects and the policies that need to be designed by the Indian country for attracting the investors and also to increase the ov erall performance of the economy by raising the inflows when compared to China. 1.4. Research Context In this study the researcher is focused on the worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s largest two most populated countries: India and China with a greatest history background. These two countries are known to be fast growing countries in the world and are known for their ample facilities and environmental conditions. These two countries are economically improving their standards in terms of technology and infrastructural growth. However, China is considered to be more positive in terms of attracting FDIà ¢Ã¢â€š ¬Ã¢â€ž ¢s and are almost leading the comparison with India. In this research the time is a biggest constrain and to understand the research physically is really a tough target for the researcher by visiting both countries to meet and interview/ survey the financial organizations experts from various locations. However it is also noticed that in India only the FDI policies are changing from place to place based on the local governments rules and regulations. All the major rules and regulati ons governed by RBI and Government of India are applicable, addition to that the investing company also needs to ensure that the environmental and ethical issues are not disturbed by the foreign investors in local and urban areas of various parts of India. As an example, there are some pilgrim places of India which does not allow non à ¢Ã¢â€š ¬Ã¢â‚¬Å" vegetarian food or related items so in that circumstance neither Government of India or RBI cannot allow the foreigners to invest their amount for a restaurant or bar and etc. Similarly in China it is one of the largest countries in the world and is having different cultures and backgrounds with in the country. Hence from the above context it is understood that this research will mainly focus on the secondary data available and in some areas it can get into the help of people related to the financial and banking industry. 1.5. Research Methodology For conducting any type of research, the data needs to be gathered by the researcher where this collected information should be in such a way that it is valid and accurate. Researcher need to choose a suitable method from various research methods, by which the researcher can successfully finish the research. Generally there exist two different types, primary data and secondary data. Primary data mainly focus on the aim of the research where the researcher can easily collects the information from various methods like surveys, interviews, etc. Where as in the secondary data, the researcher can collect the data only from the sources like journals, books, magazines, online articles, etc. where the researcher need to collect the accurate data as these recourses will not focus on the aim of research (Kumar, R., 2005). Here in this research, researcher collects the information through secondary data as the main aim of this research is to compare the FDI inflows in both India and China. As t he time is the biggest constrain, it will be really tough target for the researcher to select the primary data as the researcher either need to do interview /survey with the concern persons by visiting two countries where it cannot be possible with the period of time. So, ità ¢Ã¢â€š ¬Ã¢â€ž ¢s better to prefer secondary data for gathering accurate information for the research by referring various resources. Hence, the research can be successfully completed by analyzing the collected information and drawing the conclusion from this data. Chapter à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2: Literature review 2.1. Overview This chapter will provide the suitable information and required material for completing research successfully with no issues during the research process. At the same time the literature review gives a basic idea about the research problem solving background with additional material from their related background history. The growth of multinational enterprise (MNE) activity in foreign direct investment (FDI) has grown at a faster rate than most other international transactions as well as the trade flows between countries. The research literature review covers the objects related to foreign direct investment, detailed introduction and description of FDI and impacts of FDI. International Monetary Fund (IMF) has defined the FDI as an international investment of one company with the target of enduring relationship i.e. Investments made by company must exceed the equity of Target Company by 10%. The major requirements of the investors will help in faster growth of their organization which is explained by Nicolas, B. (2010) in terms of Control investments, supply of funds for foreign operations, a balance of payments flow and Capital transfers. 2.2. Brief History and background of Foreign Direct Investment In the present world, there exist various investment techniques for the corporations for increasing their growth. If these industries lacks in making right decisions in their investment then it may lead to reduce their growth and their level in the global market. So, many of the countries prefer Foreign Direct Investment (FDI) compare to other techniques because most of the corporations get affected financially due to their investment decisions. Mostly FDI is preferred as it is considered as an integral part of an open and effective international economic system and also referred as the major catalyst to development (OECD, 2002). In the present market, USA stood a number one position in FDI flows. According to Nicolas Breitfeld (2010, p.1), à ¢Ã¢â€š ¬Ã…“Foreign Direct Investment (FDI) is defined by the IMF as an international investment of one company with the intention of lasting relationshipà ¢Ã¢â€š ¬?. Foreign Direct Investment (FDI) plays an important role in the financial se ctor. Generally most of the countries believe that increasing the international linkages through FDI is an important feature of financial globalization and elevates the major challenges for statistics and policymakers in industrial and developing countries (Neil, K. P., 2004). Further of this section, it clearly discusses the views of authors on FDI, the importance of FDI and mainly focuses on the issues that are being faced by the countries while introducing the FDI. Even-though authors define Foreign Direct Investment (FDI) in different ways based on their research it is mainly mend to development on countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s and globalization. Some of the authorà ¢Ã¢â€š ¬Ã¢â€ž ¢s views on FDI are discussed below: According to Organization for Economic Co-Operation and development (OECD) (2008, p.62), à ¢Ã¢â€š ¬Ã…“Foreign Direct Investment (FDI) occurs when a business located in one country (the direct investor) invests in a business located in another country (the direct investment enterprise) with the objective of creating a strategic and a lasting relationshipà ¢Ã¢â€š ¬?. Here, the author suggests that occurrence of FDI exists only when the business persons invests their money in another country. They invest their income in another country by making some rules and regulations in their relationship. But according to Alexander, L. and IMFD, (2002), foreign direct investment defined as the integration of three components which are illustrated below: The branch profits need to be distributed and divided in equity without any holding withholding taxes. Accrued interest need to be paid to the direct investor by the direct investment enterprise, this can also be referred as income on debt. Earnings are reinvested in proportion with the direct investment stake. In this context, author says that the investment and the interest benefited by the business people need to be redistributed in an equal proportion among the investor and the direct investment enterprise. At the same time, Neil, K. P. (2004, p.3), discusses that according to BPM5 (Balance of Payments Manual) FDI defined à ¢Ã¢â€š ¬Ã…“as a category of international investment that reflects the objective of a resident in one economy (the direct investor) obtaining a lasting interest in an enterprise resident in another economy (the direct investment enterprise)à ¢Ã¢â€š ¬?.   Here, the author discuss that FDI indirectly affects the economy of another country as the other country invest their income on another country for gaining interest on their investment. Even though the opinions and views of the authors differs in defining the FDI but all the authors focus on only one point that is the benefit dragged by the investor and the direct investment enterprise. These investors of get benefited globally with FDI on the interest on their investment and also increases their international linkages with the industries established in another country.    2.3. Impacts of FDI Foreign Direct Investment is considered as a driver of economic growth and development for developing countries which often lack the technology or capital to promote sustained economic growth and development. Mostly, FDI is considered as one of the major drivers of globalization as it continuously raises with the high growth rates before the financial crisis hit the world economy. The way through which FDI promotes economic growth and development to the countries is contentious because there is no definitive evidence and lags in supporting the literature. Even though there is no empirical evidence in representing the impact of FDI on the countries there are some theoretical explanations from which one can easily analyse the impacts of FDI on developed and developing countries. According to Bora, B. (2002, p.168), à ¢Ã¢â€š ¬Ã…“FDI flows were increasing rapidly much more quickly than international trade flows, which in turn were increasing faster than world GDPà ¢Ã¢â€š ¬?. Laura Al faro (2003) says that FDI offers great advantages to host countries because many of the academics and policy makers argue that there exists a most important positive effect on the development of host countries. FDI not only acts as the source of the valuable technology but also helps the countries in developing the linkages with the local firms that indirectly helps the country in raising the economy. Due to these reasons, most of the developing and industrialized countries offer incentive for encouraging the FDI in their economies. The environmental impacts of foreign direct investment may be positive, negative or neutral based on the institutional and industrial context. Gorg and Greenwood (2002) comes under a conclusion that the effect due to FDI is negative by reviewing the information from the foreign-owned to domestically owned firms. But Lipsey (2002) supports the positive benefits in preferring FDI. FDI flows attained a new record level right from the year 1990 to 2000. Then , from the year 2001 the growth in the investment failed and the later years it saw a steady and steep decline in global FDI flows. , Figure: Shows trends in global FDI flows during the year 1991 to 2003 (FDI, 2007, p.7). FDI affects the economic growth of the country in various aspects like it raises the formation of human capital, provides a facility to transfer the technology between the host countries and also stimulates the domestic investment. The relationship between the impact of FDI and economic growth can be easily analyzed with the help of production function and also with the other variables that affect economic growth such as domestic, trade, labour and capital (Falki, N. 2009). Production function was done based on the endogenous growth. According to Kumar, N. (1998, p.112), à ¢Ã¢â€š ¬Ã…“Direct investment was thought of mainly as a flow of capital, possibly replacing local capital or possibly representing marginal additions to the host countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s capital stock, followed by the necessity of financing dividends and interest, and possibly repatriation of capitalà ¢Ã¢â€š ¬?. Some of the authors studied on the impact of FDI on economic growth in developing countries where those opinions are illustrated below: Authors views on à ¢Ã¢â€š ¬Ã‹Å"Does FDI promote Economic Growth in developing countriesà ¢Ã¢â€š ¬Ã¢â€ž ¢ S.No. Authorà ¢Ã¢â€š ¬Ã¢â€ž ¢s name Researched during the year Does FDI promote Economic Growth in developing countries (Yes/No/May be) Explanation 1. Balasubramanyam 1996, 1999 May be Requires open or neutral trade regime 2. Borensztein 1998 May be Depends on education level of workforce 3. De Mello 1999 May be Depends on degree of complementarily and substitution between FDI and domestic investment 4. Graham and Wada 2001 Yes Raised per capita GDP in Chinese provinces with FDI concentration 5. Graham 1995 May be TNCà ¢Ã¢â€š ¬Ã¢â€ž ¢s market power can generate negative impacts 6. Loungani and Razin 2001 May be Risks 7. Lim 2001 May be Depends on tax incentives, regulatory and legal impediments, macroeconomic instability 8. Marino 2000 May be Requires open trade and investment policies 9. Mallampallyand Sauvant 1999 May be Requires human resource development, information and other infrastructure 10. Markusen and Venables 1999 Yes Raises productivity and exports of domestic firms, generates spillovers 11. Rodrik 1999 No Reverse causality: TNCs locate, rather than drive growth, in more productive and faster growing countries Table: Shows the authors explanation on Does FDI Promote Economic Growth in developing Countriesthis is a question? (LyubaZarsky, 2005, p.25) From the above table, it can be understood that out of 11 authors, only 2 authors support that FDI promotes economic growth in the developing countries as they explain that it raises the productivity, exports of domestic firms and stated a practical example that it raised the percapita GDP of china government with the help of FDI. Rodrik, opposed the views of the other authors on supporting the FDI as based on their research. From Rodrik research, it has been stated that it doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t shown impact rather it was derived as a reverse causality. Apart from these three authors, the remaining 8 authors were in a dynamo whether to support the FDI or not because all these authors states that the impact on FDI on economic growth depends only on the circumstances that the author considers but not on any other aspects. For example: FDI shows more impact on economic growth only when the government fulfil some basic needs such as require open trade, investment policies, human resou rce development, information, other infrastructure, etc. If these requirements are fulfilled by the government then automatically it get benefited with the FDI but if it fails in reaching those needs then it may face some risks due to the policies and the agreement between the countries. Hence, it can be stated that impacts of FDI directly depends on the situations and circumstances that are being considered by the government. By tightening of international financial conditions will have as awful effect on inflows of FDI. In the recent years, this has been main source of assets for many countries (U. N. Staff. 2009).FDI shows more effect on the economic growth of the countries as it provides various benefits to the countries that acquire FDI are illustrated below (Khan Arshad, 2007): Introduces the latest techniques and technologies of marketing and management à ¢Ã¢â€š ¬Ã¢â‚¬Å" with the help of FDI, the developing countries can know more about the latest techniques and the technologies that are being used by the developed countries. By acquiring and implementing these latest technologies in the developing countries, to some extent it can increase its growth in terms of economy. Exploitation and utilization of local raw materials à ¢Ã¢â€š ¬Ã¢â‚¬Å" usage of raw materials in the countries will be increased by exporting these excess materials to other countries and get benefited with them by importing other raw materials from other country which are shortage in their countries. Can be easily access to the new technologies as there will be a rapid flow between the countries, each of the country can know more easily about the other country and their religion. Based on this analysis, it can assess and access the technologies in their own region by making contract with the other countries. Financial flows between the countries Foreign inflows between the countries are used for financing current account deficits. The finance flows between the countries are transferred in the form of FDI where it doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t generate interests and repayment of principal but internally raises the human capital stock through job training. Chapter à ¢Ã¢â€š ¬Ã¢â‚¬Å" 3: Empirical Literature on FDI based on INDIA and CHINA 3.1. Effects of FDI on all other countries when compared with India and china The existence of a strong negative relationship between trade share and country size was supported by the literature on trade and development. Country size and trade ratio are inversely proportional in size (larger the size of the country smaller is the trade ratio), the foreign trade, investment, and technology transfer between countries will directly affect the degree of sincerity and competitive pressures emanating from abroad (Pieter, B. 2007). Thus, the impact of these competitive pressures would be much less in a large country such as China and India than that among other East Asian NICs. In recent years china had recognized its need towards foreign trade, investment and technology with the aim of modernization, nothing like the Third World developing countries (India) that impoverished foreign capital. 1984-85 1994-95 1999-2000 2004-05 2006 2007 World 2.2 4.8 18.3 9.0 12.9 14.8 Developed economies 2.1 3.9 19.1 7.7 12.80 15.6 Developing economies 2.8 8.1 15.8 11.9 12.5 12.6 Developing Asia 2.3 7.9 12.1 9.9 11.0 10.6 East Asia 1.9 9.0 14.8 9.3 8.7 8.6 China 1.8 15.9 10.4 7.7 6.4 5.9 South Asia 0.2 1.7 2.4 3.3 6.2 5.7 India 0.1 1.7 2.7 3.1 6.6 5.8 Table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2: shows FDI inflow as percentage of gross domestic fixed capital formation (GDFCF), 1944 -2007. (Source: Prema, C. A. 2009, p.379) The average annual level of FDI inflow for developing Asia had raced sharply from US$ 19 billion during 1984 1985 to US$ 500 billion till 2007, at the same time share to developing countries have raised from 15.1 to 17.4 percent which is shown in the above table. The gross domestic fixed capital (GDFCF) as a share of FDI inflow is higher for all the developing countries in the period 1984 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 1996 and reversal due to the Asian financial crisis during 1997 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 98. FDI inflow for developing Asia with the average FDI/GDFCF ratio during entire period 1984 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2007 is approximately 9 percent and 7.1 per cent when compared with all the developing countries at the same time the global average is 7.4 per cent. China is the recipient country of inward flow and the largest developing country from past two decades where it has been investigated a theoretical increase in inflow with in developing Asia. Among all the countries china was in the second position for total FDI flow as per the ASEAN countries, with increased average annual level of US$ 3 billion during 2000-2007, and from the year 1980 to 1997 almost before six years china was in the second half with US$ 30 billion which was the onset effect of financial crises from 1997-98, due to decline and with determination from about US$ 35 billion per annum before the year 1997 to an annual average of about US$ 24 billion between 1997à ¢Ã¢â€š ¬Ã¢â‚¬Å"79. Establishment of export-oriented industries is heavily concentrated by chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s FDI, there observation on the share of FIEs for total exports in transition economies of china is two percent of expended persistently before 1980 and approximately 60 percent by the year 2006. India process to increases FDI participation in export- oriented activities which had remained at a outlier region of FDI whose one/third FDI during the independence in 1947 was a major amount of stock as a primary sector with plantation, mi ning and oil at the same time one/forth was the manufacturing and all the remaining stocks are in services, mostly trade, construction, transportation and utilities. The inflow started increasing in manufacturing from 1960s although with a divestment from this sector of FDI, since, low-wages, low skilled manpower are the Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s huge supply it can attract garments and other simple assembly activities which would indirectly favor the heavy foreign investment industry thus primarily focusing towards domestic market. From mid 1990s a slight increase in software is observed as well as significant competition with the world market at industrial production was not notable (Park, J. H. 2002).some of the difficulties which are to be faced and over come for fast development of the country . India faced many difficulties to attract foreign investors in both products and services market now it is only success to service industry of IT mainly. In order to overcome these difficu lties to stimulate domestic demand this is given in three steps: The interest rates should be competitive in RBI. Value added tax (VAT) are to be implemented. Reduce the budget deficit through government. Figure: shows the financial states of India and china GDP the total chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s financial assets is approximately 220 per cent of GDP at the same time Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s financial assets is 160 per cent, countries savings and investment is the great strength for chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s financial system and Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s financial system is outside occur in savings and investments (Sources: Slide share 2008, slide No:18). 3.2. Fundamental policies of FDI India followed market-distorting policies on both foreign and private investments thus with this estimation about barriers for imports and exports are analyzed. Thus it become necessary to control the production and distribution as well as administered price controls etc. The impacts of opening up policies are likely to open up with foreign trade, investment and technology transfer, which would be much less in large countries of china and India when compared with all other East Asian NICs. Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s opening policies in recent years is the success story with the favorable impact is not only for small economies but also for all large continental economies. China and India may not suffer from a large country constriction for adopting the export-oriented, outward-looking development strategy considerably (Park, J. H. 2002). The reformist policy is to fill the domestic savings gap which is necessary for economic development with foreign capital inflows, along with other goa ls in advanced foreign technology and managerial skills, and to promote exports to increase the foreign exchange earnings of the country. Due to open-door policy Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s trade and inflow of foreign direct investment and loans are impressive, thus within a very short time china became a major exporting country, and an export competitor with the East Asian NICs (Newly Industrializing Countries) and ASEAN (Association of Southeast Asian Nations) countries in the Asia Pacific region. The opening policies in china have contributed to the countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s economic growth and development considering all domestic economic events. The Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s economic reforms undertaken in 1991 in light of Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s experience with the export-oriented, foreign direct investment strategy for economic growth and development which has been examined with superiority of exportà ¢Ã¢â€š ¬Ã¢â‚¬Å"oriented, outward-looking development strategies. Thus China c an provide important lessons and policy implications in economic development for all Third World developing countries like India. The success story of china open to worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s economy made it ideal for studying the relationship between trade and development as well as for testing the validity of export-promoting development strategy. 3.3. Historical Background and National Goals 3.3.1. History of FDI in India The generational explanation of history is given as follows after Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s independence: during 1947 to 48 there was the British owned the private foreign capital through the national policies resolution which is Swadeshi movement Industrial policy. In the next generation i.e. from 1949 to 1953 foreign investments where far away from trio of domestic business house with foreign capital as well as with the government nationalist sentiments. The second Economic plan was launched in 1957 as industrialization through import substitution and encouraging private investment. Some of the selected industries got foreign collaboration and JV mostly manufacturing companies which are retained participation in Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢ FDI since 1960s, the devaluation of rupee encouraged the socialist idealism banks and foreign oil majors nationalized after late 1960s. After almost 8 years in 1968 the foreign investment board had encouraging investments on there own terms and cond uction. In the year 1973as per the Foreign Exchange Act (FERA) which launched a new article that all firms should come together for their foreign equity, holding 40% of foreign equity to be considered as Indian companies due to which IBM as well as coca cola is exited. After seven years of strict vigilance on FDI, from the year 1980 licensing procedures were liberalized to softened, technology transfer and royalty payments relaxed, foreign investment was encouraged wherever possible. During 1900-s rupee value got down, withdrawal of NRI money, India turned to IMF; there was liberalization on trade regime and regulatory frame work. Many of the industries were invited by FDI and in some cases limit was increased from 51% to 100%. The service sector was again opened for FDI. The political instability after 1995 had started but a perception towards FDI had changed due to changes in government kept focus on FDI. 3.3.2. History of FDI in China China has joined the joint venture with other countries in the year1979, and by the year 1986 china became fully foreign owned enterprise. It was divided into four zones namely Shantou, Shenzhen, and Xiamen in the year 1980. After four years in 1984 it was found that chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s economic zone has fourteen cities and whole china combined by late 1900à ¢Ã¢â€š ¬Ã¢â€ž ¢s. There was a rapid economic growth in reform period due to profusion of labour and its low costs, Rapid expansion of Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s domestic market at the same time plays important role of overseas Chinese for increasing integration with world economy. The marketing effects are generally obtained by imports and exports in both bilateral countries. FDI is very essential for developing countries for Off setting the capital deficiency, Acquiring advanced technology, Gaining production know-how, Promoting exports as well as to Table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2: shows FDI in India-China products Trade (in million US Dollars). (Source: Prema, C. A. 2009, p.379) The two highest population countries of the world are India and China which together contain approximately 40 per cent of the worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s humidity on an adjacent landmass in Asia. Both countries are pride in birthplace of civilization entering the era of sharing worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s greatest development problem. The underdeveloped areas of these two countries is due to huge population relative to land and other resources, around 1950à ¢Ã¢â€š ¬Ã¢â€ž ¢s there was no commitment to national planning for economic modernization as there was new governments of China and India, led by Mao Zedong and Jawaharlal Nehru so as to eliminate poverty and raise the standard of living (Park, J. H. 2002). Approaches to Development: Some of the important characteristics shared within India and China as the wealth of people relative to other rare resources such as arable land, natural resources, and capital suggesting the appropriate strategies for development would have involved production of labor-intensive goods. Among these some are exchanged for imports of capital goods and technology as per the necessity for development. For economic development and modernization India and China turned away from open-door strategies to integrate their economies into an international economy. Thus, both countries are turned away from export-oriented, outward-looking strategies and from integration into the world economy, now they are opened to outside world as force from western arms. At the same time both countries followed autarkic trade policies with a barrage of trade and exchange controls, which effectively cut off any link between domestic and international markets based upon import-substitut ing industrialization strategy as a promotion of heavy industries, and also scientifically categorize in opposition to agriculture by taxing it directly or indirectly finance industrialization. China, Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s economic planning where carried out under a parliamentary democratic organization to attain individual freedoms and for the market system to ensure economic decision-making all over the country, with all development policies planning for area with centralized government controls of a Soviet-type system are to be carried out. As Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s first 5-year of development plan was implemented in the year 1952, nationalization and land reform had recipe into effective tools for resource with mobilization and allocation. As they say year 1950 was the beginning of development race between India and china with similarity in their size, historical background, in their economic structure, status, similar national goals and aspirations for raising living stand ards with economic modernization and development: even though both countries have vast difference in their ideologies, in the government institutions and great approaches to implementing developmental policies and plans. Which it seems as if a insertion of races in major part of government officials, schools, citizens as well as in all the interested areas obtaining an outcome of the race as implementation of far-reaching. Economic Performance: The mobilizing domestic resources for economic development where performing well during 1950à ¢Ã¢â€š ¬Ã¢â€ž ¢s and 1960à ¢Ã¢â€š ¬Ã¢â€ž ¢s. It was possible to raise per capita income and living standards even in these populous countries after a big push argument for development working in reality to achieve demon- started in practice. Table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 1: Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s: major economic industries. (Source: Park, J. H. 2002 p.75) India and China are hindered by statistical problems of estimating the relative comparison of economic performance for Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s national output and population, while Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s data are believed to be more protected. After a number of researchers it is agreed that until the 1970s China grew faster than India. With all the mobilizing resources and channeling the investment activities will affect the promoted artificially, selected and well protected for attaining social and political processes that emerge gradually over time (Park, J. H. 2002). The Origins of Economic Reform: The two largest populated countries India and china where called as two Asian giants, but at the end of 1970s, it was clear that the winner of à ¢Ã¢â€š ¬Ã…“the developmental raceà ¢Ã¢â€š ¬? is neither India nor China, race ended with a dark horses as the race in two Asian giants was soon lost, with the developmental strategies of four little East Asian tigers and became the focus of universal attention, at that movement the economic achievements by the East Asian NICs where extraordinary and historic, and their success has been appropriately coined as à ¢Ã¢â€š ¬Ã…“the East Asian miracle.à ¢Ã¢â€š ¬? China and India, realized that their economies were under-performing, facing a number of problems of bitter with their own leadership, casting a shadow of policy instability and uncertainty. Due to disorder of Cultural Revolution (1966-1976) disruption to economic development had increased the genuineness and sensitivity of Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s e conomic to overcome underperformance, at that movement à ¢Ã¢â€š ¬Ã…“a sense of political crisis and disillusionment with the established political framework that made radical economic reform possibleà ¢Ã¢â€š ¬? (Pieter, B. 2007, p.69) heightened the confidence for success with the cooperation of Chinese-based economies of Hong Kong and Taiwan than the success of Japan and Korea, the Politburo for Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s new economic policy of opening up to the outside world with a winning support is achieved at the end of 1978. The Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s economic reforms achieved a full swing in 1984 with a increase of output at approximately about 9 percent per year on average and per capita income more than doubled in a short time span with great confidence and struggle, with the success story of Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s open-door policy the economic reforms increased heaviness for the reform in India. The average annual growth rates of real GNP of India had not more than 4 per cent for first 3 decades after independence and started growing economic performance during the period of 1960 to 1990 with a per capita GDP growth rate of 7 per cent approximately in the East Asian NIC, at the same time 5 percent of chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s and only 2 per cent for India which was one of the lowest among all Asian development banks. 3.4. GROWTH PERFORMANCE BETWEEN INDIA AND CHINA Figure: shows the growth rate of FDI comparison. (Sources: Slide share 2008, slide No: 24) India and china will face a tie position in trade and investment for the benefit of both countries together. Over last 10 years India had improved its performance as outlook of chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s experience and sustained high growth for further opening of its economy externally and internally, with a bilateral approach at high national investment rate and stronger labor analysis in the modern sectors with a narrow high end manufacturing. The most important source of agricultural performance in India has huge rural poverty in many parts of the nation. At the same time china lag due to its great source of economic strength, a dynamic and relatively highly developed private corporate sector which are more effectively for national development. The junction of india and china in growth model seems to be similar and partially indicated. India and china had assumed limited economic reforms with same low capita income since 1970s. Some of the most important factors affecting the econom ic performance are given below: Initially there was a high growth in china (Pieter, B. 2007, p.123) Education (literacy) and health standards were considerably higher. China was having superior infrastructure. Market distortions in China were more severe than in India that unpredictably, means their correction offered greater potential for growth. India China GDP total 5.3 9.4 GDP per work 3.2 7.7 GDP per capital 3.3 8.1 Table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 5: shows the Compound Annual Growth Rates in % p.a. 1978à ¢Ã¢â€š ¬Ã¢â‚¬Å"2003. (Source: Pieter, B. 2007, p.133) The above table tells the GDP flow of India is changeable with a great potential and support where as China was emerging from the horrors to generate quick and large income gain for economic development. From 1970s china was capitalized on people readiness with initial market reforms focused on the rural economy for generating quick and large income gain for farmers who are the huge population, this lead to additional reforms to the entire economy thus establishing the economy to foreign investment and trade. During 1980s political apparatus and administrative have started concentrating on economic development, which is very difficult for India without the co-operation of major political parties, thus it can be observed form the statistical data shown below. Figure à ¢Ã¢â€š ¬Ã¢â‚¬Å" 1: shows the Gross capital formation in % of GDP. (Source: Pieter, B. 2007, p.137) Figure à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2: shows the statistical data of global GDP. (Source: Source: Pieter, B. 2007, p.136) This statistical figure gives the relative comparative estimation of all global GDP from early 1820s to next three decades of 2025s wherein one can observe a gradual flow rice since 1970s-2025 with almost 20 per cent of growth is aimed by china and India to be in the competitive position with all global countries. In mid-1980s restriction on domestic private enterprise was removed by Prime Minister Rajiv Gandhi from economic reforms sponsored with a primary focus on private enterprise and start foreign trade and investments since 1990s.india started portfolio investment long before chins but ,growth was less and unable to generate benefits due to large population than china . Even though there is a rapid growth in Indian economy with a fluctuation thought on commitment of market reforms. The difference between domestic and international competition and promoted market integration more aggressively and scientifically same as in India is eliminated expecting financial sector with a confident market forces in china, at the same time India largely resisted the open domestic distribution relating to foreign companies in china and proposed a process of collecting tariffs on the manufactured goods which is shown in table below. Simple Average Tariff (%) Weighted Average Tariff (%) 1985 2005 1985 2005 India 101.9 17.7 99.4 12.6 China 41.9 9.5 33.2 5.8 Table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 6: shows the Import Tariffs on Manufactured Goods. (Source: Pieter, B. 2007, p.133) 5. The participation of women in economic growth is more in china than in India at the same time the inequality sexes was much more in India than in china .the table below shows the comparative information between India and china, with all the related social information. Table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 6: comparative indications of some social activate. (Sources: Pieter, B. 2007, p.133) The household saving rate of India had risen that is almost higher than china with at most 5 per cent difference and a decline in its national saving rate. Difference in growth performance within natural investment rates is considered to have less important. From the table below one can know the sheer volume around 2005 with a fixed capital of china was 10 times more steel and 8 times more cement than that of India. Table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 7: Statistics on Steel and Cement in India and China (million m. t.) (Sources: Pieter, B. 2007, p.133) 7. The major part of FDI inflow facilitated the reform policies of flexible labour laws, pro-investment incentive framework in china, with this more than 10 times of Indian FDI has china absorbed foreign technologies, management experience and marketing skills in a rapid sense with much larger scale than India as well as productivity growth in industrial sector is probably more larger than Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s inflexible labour laws which is seen in the table below Table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 8: Share in Global Manufacturing Value Added and Exports (Sources: Pieter, B. 2007, p.134) The foreign and domestic private investment as well as employment growth in the formal economy is in very low position during 1980 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2003, thus tells the part investment rate of the country. 8. China maintained the basic infrastructure on investments in all areas more before than India with large share of investable resources. 9. China explain about the greater à ¢Ã¢â€š ¬Ã‹Å"development-effectivenessà ¢Ã¢â€š ¬Ã¢â€ž ¢ which is measured by measured by the World Bank and given in the table below Table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 9: World Bank Governance Ranking of India and China in Survey for 209 Countries (2004). (Sources: Pieter, B. 2007, p.135) Since 1980s chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s per capita income grew faster than in India simultaneously on every dollar of GDP even with huge rate of population, at the same time with the low fertility rate it will begin to experience aging in labor force much earlier than in India. Government regulation when effecting India will restrict product market reforming in order to over come different situations such as: political issues of selection of areas like retailing, news media and defence are not deregulated politically: There are different types of products in different sizes especially in clothing and textiles which are approximately 830 products which still cannot receive FDI and canà ¢Ã¢â€š ¬Ã¢â€ž ¢t even expand: Some of the market-harder for local companies for new innovations and be efficient towards the countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s economy even with local supply chain remains inefficient and unexposed to the worldwide market skills and talent which may lead to loss of consumers income in whole economy as a general assumption to be considered liberalization of automotive industry and air line industry. The market restrictions is lacking because there is no definite infrastructure. For the competitive effect the lack of infrastructure is the biggest diffic ulty for growth, the physical infrastructure is controlled in a state but regional differences concentrating FDI for some specific regions only. With the implementation of some reforms inefficient will lead to regional parties with a political instability in state as well as central government making development projects. The à ¢Ã¢â€š ¬Ã…“electricity shortageà ¢Ã¢â€š ¬? infrastructure is based on electricity act 2003 amid to provide the electricity continuously and only eight states implement this act as low cost businesses. The structure of FDI will attract upgraded telecommunication highways and ports with power, railways, water and swage still major areas to be considered (Slide share 2008).