To overcome these risks, the firms use 5 specific approaches for the managing political risks. The most common approach is that the firm must enter into a joint venture with a local partner. This presence of local partner has a specific adverse influence on the economic proficiency and profits but it surely lowers down the political risks of nationalization and expropriation as the local partner handles the local government by way of political lobbying and gets the necessary alterations in the nation’s political policies. The 2nd approach is the insurance of political risk i.e. the firm’s gets the insurance cover against political risks. The 3rd approach is that the unit in the high risk nation is often relied on the supply of raw materials, technical skills, technology, components, etc. on other units of firms located in some other nations. The 4th approach is that the organization makes use of symbols and names which reveals its place of origin and appears more familiar to the host nation’s people. Finally the 5th approach is that the firm must employ local people increase as much capital as possible from the host nation and develops better relations with the host nation politicians and government (Hagstrom, 2003). Thus an American company that wishes to conduct business in China must overcome all the above mentioned political risks in order to emerge itself as a successful organization in China.