Question

Japanese and European engineering companies entered China to participate in building the world's largest network of high-speed trains worth billions of dollars. Companies such as Kawasaki Heavy Industries (Japan), Siemens (Germany), and Alstom (France) were joint-venture partners with domestic Chinese companies. These firms now allege that the Chinese partners built on the Japanese and European partners' advanced technology to create their own, next-generation high-speed trains. This example best highlights the _____ that firms can experience when expanding overseas?

1) Opportunity
2) Competition
3) Innovation
4) Risk

Answer 1

The situation where Japanese and European engineering companies face their Chinese partners building on their technology to create competitive products exemplifies the risk associated with international expansion.

Step-by-step explanation:

The example of Japanese and European engineering companies such as Kawasaki Heavy Industries, Siemens, and Alstom entering China and facing the situation where their Chinese partners used advanced technology to create their own high-speed trains best highlights the risk that firms can experience when expanding overseas. This tendency to engage in international trade and partnerships is driven by the potential for economies of scale, increased competition, and consumer variety.

While such collaboration can lead to innovation and growth, companies must also navigate the complexities and challenges that arise, such as the risk of technology transfer or intellectual property theft.