Question

Which of the following statements is true of the challenges faced by organized retailing in China?

1) Government impedes foreign investment in retailing.
2) Stringent regulations on profit margins discourage capitalism.
3) An unstable political scenario increases the risk associated with direct investments.
4) Managerial talent is becoming more difficult to find and retain.
5) Retailers cannot rely on domestic products as their quality is low.

Answer 1

Organized retailing in China faces challenges such as government intervention, which can affect foreign investment, stringent regulations that shape the capitalism environment, and the increased demand for managerial talent.

Step-by-step explanation:

The challenges faced by organized retailing in China can be attributed to various economic and political factors. While some statements about these challenges may be outdated or misrepresent the current state of retail in China, it is important to look at what factors are consistently influencing the market.

True Challenges for Organized Retailing in China

• Government intervention in the economy is indeed a characteristic of China’s market. Although this may discourage some foreign investment, the Chinese government has implemented policies to facilitate trade and economic reform.
  
• Regulations can indeed influence capitalism in China, but this does not inherently discourage it. Instead, government regulations aim to control the market in a manner that aligns with national interests.
  
• Managerial talent is an ongoing challenge globally, and China is no exception, especially as the country's economy grows and demands more skilled managers.

Some of the statements in the original question are either oversimplified or do not entirely represent the current state and complexity of China's economic conditions.