China Country Macroeconomics Project

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Table of Contents

Introduction/ Background2
PESTLE Analysis4
Political Environment4
Socio-Cultural Environment5
Technological Environment5
Legal Environment6
Environmental Factors6
SWOT Analysis7
Economic Environment8
Export & Import8
Government Expenditures9
Investment11
Economic development/ Forecast11
China should face a lot of challenges11
Chinese economy in the next 20 years12
Economic Growth12
Definition & Measurement13
Causes of Economic Growth13
Balance of Payments & Exchange Rates13
Globalization14
Environmental Issues15
Sustainability15
China’s Green Wall15
Pollution15
Overpopulation and One-Child-Policy16
Travel & Tourism Industry16
Conclusion17
References20
Аppendicies24

Introduction/ Background

People’s Republic of China is 9.6 million sq km, it is situated in the eastern part of Asia on the west coast of the Pacific Ocean. It is the third largest country in the world (after Russia and Canada) with a population of 1.35 billion (UN, 2010) with a growth rate of 0.6%. The capital is Beijing, but their largest city is Shanghai. Their official language is Mandarin Chinese and their major religions are Buddhism, Christianity, Islam and Taoism. Their currency is Yüan.

China is the most heavily populated country in the world with a continuous culture of nearly 4000 years old. Lot of elements have been originated in China such as paper, gunpowder, credit banking, the compass and paper money which all play an important role in our modern lives. The country is rich for natural resources for example iron, ore, zinc, petroleum, natural gas, coal, manganese, aluminum, hydropower potential etc.

After the country has been under communist rules for more than two decades with the leader, Chairman Mao, China now has the world's fastest-growing economy and is going through a second industrial revolution.

Until the late 1980s China had negligible influence in the world’s economy. Started to make the most important reforms to the economy, from 1978, which took place in the industrial, financial, fiscal, agriculture, banking, price setting and labour system. They made a decision to allow foreign direct investment in several small “special economic zones” along the coast which lead to a fast grow. This continued till the 1990’s with about 9.5% and with a low inflation. As the Asian financial crisis came along, the foreign investments had been reduced and its growth of export decreased.

During the period of 1990-2004 the economy was growing at an average rate of 10% per year, which was the highest growth rate in the world. GDP grew 10.0% in 2003, 10.1%, in 2004, and even faster 10.4%. After the global financial crisis of 2008, the collapse in international export markets, hit China very hard although they were the first ones to quickly return to growth. In 2011 February they overtook Japan to become the world's second-largest economy.

Nowadays China is one of the world's top exporters and is attracting record amounts of foreign investment therefore it is investing billions of dollars abroad.

They have benefit to access foreign markets as they are members of the World Trade Organization. World Travel Organization predicts that by year 2020, China will become the number one travel destination in the world.

China has the greatest number and variety of world-class tourist attractions of anywhere in the world. China’s tourist appeal is emphasized by being so culturally different from countries outside of East Asia.

PESTLE Analysis

Political Environment

Republic of China is a communist country led by the Chinese Communist Party since 1949. It is practically one-party regime. The country is a limited democracy and the following signs can prove it: • The media is under censorship

• Internet access is limited and strictly controlled
• Religions are persecuted
• Human right activists are also...
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