Sample Research Paper on Country, Industry and Firm Analysis: China

Introduction

China is the third largest country in the world, which occupies an area of 9600000sq km, and spans 62 degrees longitude and 49 degrees latitude. China has a total population of 1,336,718,015 with a growth rate of 0.494% per year. The biggest number of Chinese population is comprised of the Han Chinese. The major religious groups in china include atheist, Daoist, Buddhist. The other small groups are the Islams and the Christians. China is a communalist party headed by state. It has a per capita GDP of $ 3,678. With a GDP growth rate of 8.7% (Chow, 2010)

International Business  and Economic Development and the Role of Government

Development Economics is concerned generally with growth of countries run by governments while  international business is concerned with the activities and the value of international enterprises that are run by management. International Business has contributed towards the economic development of China. The growth of China market has created a new room for the growth for world economies. By embracing a market-oriented reform, China turned itself to become an emerging market. The soaring import trade of China offers enormous opportunities for business in other countries and this helped China to expand its economy. Through this, China has emerged one of the most vibrant countries with regard to the economic development in the world. The reformation and the opening up of the Chinese economy in 1978 accelerated China’s GDP growth from 362.4 billion RMB to about 30 trillion RMB within a period of 30 years. Since 2010, china has been regarded that second largest economy instead of Japan with the export value accounting for 10% of the world exports. China has adopted a market oriented economy that has had a positive effect on china and the globally. The economic reformations that China has put into operation over the last 20years now have greatly affected both personal initiatives and entrepreneurship. Consequently, poverty has been minimized and the average income has reached a very high level (EW World Economy Team, 2013).  The Chinese Government has played a big role in enhancing the International Competitiveness of its firms and Industries. It has contributed greatly to the national stability, which enables the economy of china keep dynamic and sustainable.  The government has played an active

role in assisting the chinese firms and industries development as the nation transitions from a planned economy to a free market. Chinese government has Provided an anticipated, competitive, equitable and socially responsible  environment, conducive to investment, trade and enterprise development. It has also Promoted structural transformation towards a dynamic industrial and globally competitive economy. (Tian, 2007).

Economic activities, the Export Industries and The Main Companies in China

The main economic activities of China include agriculture, tourism, telecommunication, automotive industry, steel industry, oil and natural gas, coal, and mining. And there main export industries are automobile, steel industry, petrochemicals, equipment manufacturing, textile industry, and shipbuilding. The main companies involved in generating export turnover in China are China Ocean Shipping Group, China Aviation Supplies Corporation, Guang Dong Light Industrial Products, China National Textile Export Corporation, and China National Chemicals Import and Export Corporation (Tian, 2007).

PEST Analysis

  • Political

For the past 10 years, the Chinese government has been focusing on the development of e-commerce in the most densely inhabited parts of the country. The Chinese political system is regarded as a one party communist dictatorship. The government of china contributes greatly to the national stability, which enables the economy of china keep dynamic and sustainable. However, since the 1978, when the Chinese economic scheme was changed from the command economy to a market economy, the power of economic management was increasingly decentralized, raising the issue of uncoordinated development of the regional economy. Presently, even though the central government has worked on alleviating the gap among different areas in terms of establishing standards, provinces tend to consider local profits rather than giving priority to the integrated advancement of the whole country. The local protectionism exerts disadvantageous influences upon market expansion of the Golden Bridge Company throughout the nation deterring the establishment of a broad distribution channel. China permits foreign businesses in the country. However, the Chinese government has issued policies that prohibit console games and particular online games. The restrictions set by the Chinese government could be risky to some foreign companies such as Square Enix’s, whose main product line are video games this would require such companies to readjust their key products which is not realistic (Chow, 2010)

  • Economical

Since the beginning of 2010, china has been ranked as the second biggest economy globally after overtaking Japan. China has maintained a standard economic expansion of 9.5% for the past 26years. In 2009, the Chinese economy reached to $ 4.814 trillion, which was about 1/3 the size of the American economy. In the 1980s, the combination of the central planning and the market oriented reformations were implemented for the purpose of increasing productivity, improving the livelihood standards and the industrial quality. Additionally, the government of China imposed agricultural reforms that dismantled the community scheme and introduced a house based scheme that offered the farmers greater decision making in agricultural sectors. Moreover, the non agricultural activities such as the local enterprises were also encouraged. Agriculture contributed by about 10.1% of the Chinese GDP in 2012. The Chinese government supported more self management for nationally owned enterprises for the purpose of increasing competition in the market and the creation of opportunities for china domestic enterprise to directly contact the foreign ones. This has help greatly in the development of the economic. Since China’s accession into the World Trade organization in 2001, China’s share in international trade has greatly increased. The leading sector of the Chinese economy is its manufacturing industries.  Despite encountering a 3.3% drop in its composition of the national GDP, the Chinese industries still accounted for 45.3% in 2012 making China the leader in the gross value of industrial output (EW World Economy Team, 2013).

  • Social factors

China is considered the one of the greatly populated countries globally.  China is an extremely high context country where individuals prefer receiving indirect messages. In order to establish a business in china and for the business to be very successful, it is important for one to establish a strong private relation with different stakeholders.  Apart from the relationship, corruption is also another major issue in china. Based on the Corruption Perception Index, China appeared position 72 among the 179 countries in 2008. The effects of corruption may be more dangerous that anticipated, particularly to the economic development of a country. Corruption has been regarded as a significant barrier for operating in the Chinese market because of the huge back stage expenditures. For Golden Bridge to acquire more import quotes and pay low tariff, the total costs may comprise of not only the common ingredients such as transport costs but also implied expense for smoothing the network. E-commerce has changed the way Chinese consider doing their shopping. They mostly prefer online shopping. In Chinese businesses, there is normally a need and expectation for a face to face contact. This is mainly for the purpose of establishing a sense of trust which is much related to the Hofstede’s idea of individualism-collectivism whereby the Chinese culture is regarded as possessing a high collective score (Chow, 2010)

  • Technological

According to the data supplied by the State development Plan Commission, China has significant technological development. About 50000 projects were set up under the Spark Plan, which began in 1986. These projects were technological programs aimed at enhancing the degree of information technology in rural areas. The Chinese science strategies realized china’s huge opportunities in technological areas such as computers and biotechnology, which have created a possibility for china to be innovative in such sectors. It cannot be objected that a dense network of trans-pacific contact have established by most overseas Chinese students that is likely to increase the cooperation between the United States and china scientific in the future. The space plan of the United States is considered the standard of scientific modernity in china which is held every year. The Chinese small but growing space program is considered the nationwide pride of china (Tian, 2007).

 

References

Chow, G. C. (2010). Interpreting China’s economy. Singapore: World Scientific.

EW World Economy Team. (2013, June 4). China Economy. Retrieved from http://www.economywatch.com/world_economy/china

Tian, X. (2007). Managing international business in China. Cambridge: Cambridge University Press.