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  • Topic: Inflation, Consumer price index, GDP deflator
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International Business Assignment
EC280

Ploychompu Umphuj
University of Brighton
Seminar group N
Student Number: 11812464

Content

Introduction………………………………………………………………………………………………………………………………..3 1. The growth perspective of the economy…………………………………………………………………………………………………………………………3 2.1 Economic challenge………………………………………………………………………………………………….4 2. Mode of entry………………………………………………………………………………………………………………..5 3. Challenges………………………………………………………………………………………………………………………6 3.1. Politics……………………………………………………………………………………………………………………..6 3.2 Cultures…………………………………………………………………………………………………………………….6 4. Conclusion………………………………………………………………………………………………………………………..7 References………………………………………………………………………………………………………………………..8

Introduction
China is one of the largest economies and is attracted foreign investors from around the world. As china is the most populous country, it is full of ceremony and culture. Therefore this will create cultural challenges for PAG but still will give PAG a wealth of benefits (Communicaid, 2010). 1. The growth perspective of the economy

China, The world most populous country situated in East Asia. IMF (2013) stated that China contain 4.634 Millions of total population which will create the opportunity for business to find labor because the availability of labor is high. This will turn to cheap labor cause of high competition. Faster development will occur due to low labor cost and as there is a high population there will be higher productivity and higher opportunity to find more skilled workers, this will also lower the cost of training. Furthermore, PAG can increase their market size because there is higher demand for goods. IMF data and forecast in average

IMF data and forecast in average
46.04 (Units)
46.04 (Units)
47.26 (Units)
47.26 (Units)
48.18 (Units)
48.18 (Units)
2011-2012
2011-2012
2015-2016
2015-2016
2013-2014
2013-2014
GDP per capita (current price)
GDP per capita (current price)
Years
Years
Table 1
11.65%
(% of GDP)
11.65%
(% of GDP)
24.48%
(% of GDP)
24.48%
(% of GDP)
21.06%
(% of GDP)
21.06%
(% of GDP)
3.05% (percentages change)
3.05% (percentages change)
3.45% (percentages change)
3.45% (percentages change)
3.00% (percentages change)
3.00% (percentages change)
Inflation, average consumer’s price
Inflation, average consumer’s price
Current account balance
Current account balance

In term of growth, Chinese’s economy is slowing down in an unpredictable way; however, IMF (2012a) mentioned that growth is expected to stay above 8.00 percent in 2012 to 2013. In 2013 growth should stabilize, as investment resumes but investment will still not the only source of recovery in 2013. The biggest driver of growth may be the consumer and may be the year of heavy investment. The real GDP per capita also showing that the growth of Chinese’s economy is slowing down as shown on the Table 1. The value has decrease from 2011 to 2012 and the economist forecasted that it would continue to slow down from 2013 to 2016. As the GDP decrease this would bring people’s standard of living down and therefore less demand on goods and services. Inflation went to peaked level and now declining giving it a coming down to a more comfortable level with the percentage change of consumer price index by 2.80 percent in 2012 and is forecasted to be 3.10, 3.00, 3.00 percentage change in 2013 to 2015 respectively (OECD, 2012). Euro area also would affect China if it experiences a sharp recession this could lead China’s growth rate to drop down. However, China would be able to avoid this problem by using it countervailing fiscal response. While inflation in China had fall recently, the trade surplus also continued to fall through the global crisis. This is where a country's exports exceed its imports; trade surplus represents a net inflow of domestic currency from foreign markets. Growth is fall to 8.25 percent in 2012 from 9.2 percent in 2011...
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