Business environment risks report in China
Over the past three decades a fundamental shift has been occurring in the world economy. We have been moving away from a world in which countries are isolated to each other to the integrated and independent system (Hill, C. W., Krishna, U., & Wee, C. H., 2014, p4). It is wildly acknowledged that Globalisation process has increased chance that foreign firms enter into a country to pursue the extension of their business. Within these emerging countries, no doubt that China is one of the perfect choices. As the second largest land area country with the most population, marketing in China is huge, especially when the economy ...view middle of the document...
China’s political economy is distinctive and it is pursuing its own mode of transition from socialism through policies and institutional arrangements. For foreign investing firms, China presents an unusual degree of complexity and uncertainty so that there are challenges both for practice and theory (Child, J. 2009). It is no doubt that government play a crucial even determined role in international business trading.
2.1The role of government
The communist Party of China (CPC) is the fundamental and ruling political party of China. Within the CPC, the central Politburo Standing Committee (PBCS) is China’s highest and most powerful decision-making body. It means that all policies that related to international trading have to be agreed by PBCS (Foreign& Commonwealth office, 2015) While in China, the officialdom will involve business life deeply, which will be a challenge for inward investors even though China is now engaged in major institutional change under its continuing program of economic reforms since 1978. Chinese government can represent the collective interest over that of individual or sectional interest as a result of communist country. And they play a prominent role in economic and social affairs. Hence the power of officials is so huge that not only in confining to regulation and taxation but also in deciding either intervenes or assists international firms (Child, J. 2009).
2.2China’s reform strategy& Anti-corruption Campaign
In November 2013, the new leadership’s direction was financial reform, including greater RMB exchange rate flexibility and social policy. Policy always has big influence on economy. This strategy shows China is pushing for further economic reform and tries to maintain the sustainable growth rate. Another significant event happened is the Anti-corruption Campaign. Since the new chairperson Xi becomes the leader, he puts much effort to seek to root out vested interests and strengthen the center’s power, paving the way for future reforms. Since 2014, so many high-level officials have been investigated and expelled from the party (Foreign& Commonwealth office, 2015).
3. Economic environment
China’s program of economic reform started at late 1970s will continue open up the economy to the outside world. The achievement of the economic reform is visible. As a developing country, it grows rapidly and its GDP rate always remains the highest in the world. Most impressively, the level of its external trade turned from almost zero to the eleventh largest trading nation in the world (Child, J. 2009). The most obvious example is everywhere you can find products have ‘made in China’ label. Cannot imagine how many international trading happened and how many products export to other countries every day. The following is a table shows some economic figure about China.
China Economy Data
| 2010 | 2011 | 2012 | 2013...