Pestel Analysis China

Topics: Communist state, Economics, Single-party state Pages: 5 (1301 words) Published: December 21, 2012
Political Factors
Government type: Nominally Marxist-Leninist single party state. The people’s republic of China is a single party state governed by the communist party of China. President : Hu Jintao
Prime Minister: Wen Jiabau
Independence: 1, October 1949 ( People’s republic of China) Constitutional system
China or People Republic of China adopts socialist system or communism in their political system in their decision-making process in governing the country. The country’s sole political party in power is known as communist party of China. The government have the sole power to control all activities done by their citizen as what have been describe in how communism system worked in governing a country. In other words, the purpose of working in China is to contribute to the nation and also to the government as the government control on all the activities in the country. Stability of the government

The stability of the China government is quite moderate and stable because the administration of the government is not to publicize to the public either through the press or on the internet. So, the degree of citizen involvement in the policies is low because of the heavy restrictions impose by the government. However, the policies impose and the law regulations are quite effective in terms of economy where China is one of the leading countries in the world. In the recent years (2001), China has joined the World Trade Organization and results in rapid growth in industrial and manufacturing sectors because of the cheap labour in China. But still problems such as managing environmental degradation, demographic pressure and the extreme immigration from rural to urban area must be faced by the government. Business Freedom.

The business freedom in China is quite tight because of the regulation impose by the government where they restrict businesses from the other countries coming in. But recently Chinese government open their gate to the outside world to set up business on their country. It takes 37 days to start a new business in China compared to the world average 38 days. While it takes 1.7 years from the filling of insolvency in court until the resolution of distressed assets. Examples of business freedom in China are super marketization and opening market to foreign multinationals company’s because of the entry of China into WTO. Trade Freedom

In the past few decades, China lossen their trade policy to the outside world in their trading, export and import industry. China’s weighed average tariff rate was 4.0 percent in 2010 based from web. Factors that affect the cost of trade freedoms are import and export bans and restrictions, import and export licensing, non-transparent tariff classifications, complex regulations and standards, subsidies, state trading in certain goods, services market restrictions, issues involving the protection of intellectual property rights, and inconsistent and corruption-prone customs administration add to cost of trade. Economic Factors

* Economic freedom score: 51.0
* Population – 1.3 billion
* $7.9 trillion
* 9.0% growth
* 11.0% 5-year annual compound growth
* $5962 per capita
Tariff Rate| 3.9|
Income Tax Rate| 45.0|
Corporate Tax Rate| 25.0|
GDP (Billion )| 7900|
GDP per capita| 5962|
FDI inflow ( millions)| 108300|
Tax burden % GDP| 18.3|
Government expenditure % GDP| 19.9|

Labour force – 815.3 million (2010)
Unemployment – 4.2%
Inflation (CPI) – 5.9%
FDI inflow - $108.3 billion
Exports - $1.581 trillion (2010 est.): Machinery and equipment, plastics, optical and medical equipment, iron and steel. Imports - $ 1.327 trillion (2010 est.): Machinery and equipment, oil and mineral fuels, plastics, optical and medical equipment, iron and steel. Disposable income of buyers

Credit accessibility
The government has directly and indirectly controls their banks and financial institution. Investment in China is also...
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