Since China's accession to the World Trade Organization in 2001, economic relations between China and the US have deepened. Along with closer ties, however, has also come greater political conflict. In this case, students will analyse the current Sino-US diplomatic relationship through two distinct lenses: 1) bilateral diplomatic relations; 2) economic theory. By understanding the complex political and economic factors underpinning the relationship, students will be called on to propose potential solutions to avoid further escalation.

The case describes the position of Marks & Spencer (M&S), a leading high-street retailer in the UK. The retailer decided to enter China's retail market in 2008 is based on perceived synergies between the company's products and an increasingly affluent Chinese middle class. Upon entry, M&S encounters myriad challenges that are not part of its original strategic calculations: errors in basic shop keeping, an evolving Chinese retail environment, and the emergence of e-commerce. M&S's difficulties in China among foreign retailers are not unique, however. Numerous high-profile retailers, such as Tesco, Best Buy, Home Depot, and Asos, find China's retail market inhospitable, leaving shortly after entry. Although M&S experiences challenges similar to those these firms faced, it also encounters a shifting retail landscape that even some experienced local retailers find difficult. After eight years in China experimenting with different business models and deteriorating financials, M&S faces a key decision: should it stay or leave?

Coca-Cola was one of the first MNCs to enter post-reform China. The soft-drink manufacturer established robust market share on the back of a strong brand. Chinese consumer preferences, however, gradually changed: they preferred "healthy" drinks over soft drinks. As a result, Coca Cola's competitive position eroded as foreign and domestic competitors released new products. After a failed high-profile M&A attempt, Coca-Cola faced a strategic challenge: develop new products in-house or attempt to acquire them?

IBM's strategy in China was to go it alone. The company researched, produced, and distributed its own products. The Chinese government, however, viewed technology as a key factor for economic growth and national competitiveness: it wanted to promote technology transfer between foreign technology firms and domestic firms. As IBM's business and ambitions in China grew, it would have to make a decision: would it compete and cooperate with local firms?