The plant in China was designed primarily for the immense potential Chinese market, but it would not have been possible without liberalization of trade and investment rules. General Motors' competitors are also taking advantage of the more liberal trade and investment rules. Indeed, the auto industry has been at the forefront of globalization. In addition, we have seen a number of cross-border mergers and acquisitions. The net result is that all the major auto companies now compete on a global scale.
Global corporations can now use a number of sources for products sold in any country.
For example, a Japanese firm selling vehicles in the U.S. has the option of sourcing those vehicles from Japan, the U.S., Canada, or Mexico. This ability to source products from multiple locations has led some analysts to conclude that country-specific laws and regulations are actually becoming irrelevant. In Ohmae's view, the nation-state is largely irrelevant to these firms. And, to the extent that it is relevant at all, the nation-state serves largely as an impediment to these firms' achieving maximum efficiency. Now, that is what I call a strong conclusion.