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A poor governance environment attracts foreign direct investment because it has vast market opportunities.
China is perceived and known for its poor governance structure. But despite its poor legal system and rampant corruption, she has still been able to attract huge amounts of foreign direct investment. "In fact, China is one of the largest recipients of foreign direct investment among the world and it's threatening to overtake the number one position from the United States." (Pg. 297). Based on relation-based governance system in China, investors rely on private information and personal networks to conduct business...
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