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A medium-sized U.S. manufacturer of designer clothing does most of its operations in California and Texas. A rival firm has just relocated one-half of its

A medium-sized U.S. manufacturer of designer clothing does most of its operations in California and Texas. A rival firm has just relocated one-half of its production in Shanghai. Currently, the Chinese government offers 15% tax rates, extremely low wage rates, and other advantages that would cut production costs by half. The Chinese government would probably insist on a 20% ownership as a joint venture. Comment on the possibility of relocating.

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