1

COUNTRY REPORT

ON

CHINA

中国

SUBMITTED BY:

DEEPIKA TOLWANI

REG. NO: IBS/2018-20/PGDM-60

IIEBM, INDUS BUSINESS SCHOOL, PUNE – 57

 2

COUNTRY REPORT
ON
CHINA
People’s Republic of China

PREPARED BY-
DEEPIKA TOLWANI
REG. NO: IBS/2018-20/PGDM/60
 3

PREFACE

This report is regarding my Country Report on China, the country in East Asia and the world's
most populous country, with a population of around 1.404 billion. Covering approximately
9,600,000 square kilometers (3,700,000 sq mi), it is the third- or fourth-largest country by total
area. China emerged as one of the world's earliest civilizations, in the fertile basin of the Yellow
River in the North China Plain.

This report describes experience and learning I collected after researching about the country.
 4

ACKNOWLEDGEMENT

I take this opportunity to convey sincere thanks and gratitude to all those who directly or
indirectly helped and contributed towards the completion of this report. I take great
opportunity to express my sincere and deep sense of gratitude to Dr. Jai Singh Marwah,
Managing Director Indus Business School (IIEBM), Pune. I would also like to express my
gratitude and thanks to Prof. Arathi Purohit for her guidance. I would also like to express my
gratitude to them for their constant support and encouragement.

Deepika Tolwani
 5

Contents
ACKNOWLEDGEMENT ................................................................................................................................... 4
COUNTRY OVERVIEW .................................................................................................................................... 7
HISTORICAL PRESPECTIVE AND BACKGROUND ............................................................................................ 8
GEOGRAPHIC OVERVIEW .......................................................................................................................... 134
PAST AND PRESENT GOVERNANCE SYSTEM…………………………………………………………………………………………..17
CURRENCY IN CHINA……………………………………………………………………………………………………………………….....…37
TERROISM IN CHINA……………………………………………………………………………………………………………………………..44
ABOUT THE COUNTRY……………………………………………………………………………………………………………………………47
MAJOR CITIES IN CHINA…………………………………………………………………………………………………………………………50

INDUSTRY………………………………………………………………………………………………………………………………………………54

CHINA'S TOP TRADING PARTNERS…………………………………………………………………………………………………………57

MAJOR INDUSTRIES IN CHINA……………………………………………………………………………………………………………….59

FUTURE PROSPECTS……………………………………………………………………………………………………………………………...60
REGISTRATION FORMALITIES…………………………………………………………………………………………………………………63

BIBLOGRAPHY…………………………………………………………………………………………………………………………………..……68
 6

COUNTRY OVERVIEW

CHINA

CAPITAL BEIJING

LARGEST CITY SHANGHAI

OFFICIAL LANGUAGE STANDARD CHINESE

AREA 9,596,961 km2

WATER (%) 2.8%

POPULATION (2016) 1,403,500,365

TOTAL GDP $27.449 trillion

LEGISLATURE National People’s Congress

ETHNIC GROUPS  91.51% Han

 55 Minorities

CURRENCY  Renminbi (Yuan; ¥)

CALLING CODE  +86

DRIVING SIDE  Right

 7

HISTORICAL PERSPECTIVE AND BACKGROUND

Xia & Shang dynasties

According to legend, the first dynasty was the Xia (ca. 2100-1600 BCE) from Xi'an upstream
from the Neolithic settlements; but the written history of China begins with the Shang
Dynasty (1600-1050 BCE). Two important events mark this period: development of a writing
system, as revealed by inscriptions found on tortoise shells and oracle bones, and the use
of bronze metallurgy. Major sites include Zhengzhou, and Anyang, the capital from about 1300
BCE.The Shang of China are contemporary to the Babylonians. The Chinese golden age
of Confucius (around 500 BCE) will parallel that of Greece with Athens, Aristotle and Pericles.

Other civilizations arose before the Chinese, for example: the Sumerians who developed
cuneiform writing around 3500 BCE and were displaced by the Assyrians ca. 2000 BCE, the
Minoan empire on Crete which lasted from 3000 to 1100 BCE and the Indus Valley in Pakistan
which flourished in 2600-1900 BCE. The Egyptians also predate the Shang; they built the
pyramids and the Sphinx around 2500 BCE. But no civilization would last as long as the Chinese
and survive into modern times.

The Zhou (Chou) dynasty (1122-256 BCE)

This next period saw the development of modern writing as well as the literature and
philosophy of traditional Chinese culture. The Zhouwere a people who lived west of Shang, and
the Zhou leader, king Wu, had been appointed "Western Protector" by the Shang. He went on
to defeat them at the Battle of Muye. They gradually extended Shang culture south to the
Yangtze. The Zhou's early decentralized rule was proto-feudal, based more on familial ties than
on feudal legal bonds. As time went on, the Zhou amalgam of city-states became progressively
centralized with greater control over local governments and agricultural taxation. Later, during
a time known as the Spring and Autumn Period (770-475 BCE), the central authority of the
state collapsed. The situation was aggravated by the invasion of other people from the
 8

northwest, such as the Qin, forcing the Zhou to move

their capital east to Luoyang. Local military leaders begin to assert
their power and the country broke up into hundreds of small
domains, which separately became vigorous and expansive, while
the Zhou kings were reduced to ruling a small county on the Huang
He River. The next dynasty will arise from Qin, in the west around
Baoji. Sun Tzu, a wily general of the King of Wu, is said to have
written The Art of War at this time.

The Qin Dynasty and the first emperor (221 BCE)

The Qin Dynasty was the first imperial dynasty of China, lasting from 221 to 206 BC. Conquering
the six other states, Yingzheng became the First Emperor of Qin. Qin Dynasty was the first
unified, multi-national and power-centralized state in the Chinese history. Qin also standardized
the Chinese script, currency, and system of measurements, and expanded the network of roads
and canals. Although surviving only 15 years, the dynasty held an important role in Chinese
history.

Did you know?

The modern word “China” most likely derives from the name of the Qin (pronounced “chin”)
dynasty. First Emperor Qin Shi Huang (260-210 B.C.) of the Qin dynasty first unified China in 221
B.C., beginning an Imperial period which would last until A.D. 1912.

Han Dynasty (206 BC–220 AD)

The Han Dynasty was a great dynasty in Chinese History. It Spanned over four centuries and is
considered a golden age in Chinese history. Chang’an in present-day Shaanxi Province was one
of the two largest cities in the ancient world (Rome was the other). The Han Dynasty adopted
 9

Confucian ideology that emphasized moderation. To this day, China’s majority ethnic group
refers to itself as the “Han people”. The Han developed a bureaucratic model based on
Confucianism which every succeeding dynasty would copy. Confucianism stresses individual
morality and ethics, and addresses the proper exercise of political power by the rulers. A civil
service examination system was initiated. In 124 BCE, the emperor Wu Ti (141-87 BCE) set up
the first University with free education for selected students. Confucian scholars gained
prominent status and intellectual, literary, and artistic endeavors flourished. Two of the great
Chinese inventions, paper and porcelain, date from Han times.

Tang Dynasty (618–907 AD)

Tang Dyansty emerged as one of the greatest empires in the medieval world. Under the ruling
of the Tang Emperors, Tang Dynasty became the most powerful and prosperous country in the
world. Its economy, politics, culture and military strength reached an unparalleled advanced
level. Today Chinatown is called Chinese, literally “Street of the Tang People”. They extended
the boundaries of China into Korea in the east, and what is now Vietnam in the South. They
even extended a corridor of control along the Silk Road well into modern-day Afghanistan. By
700 CE, Chang'an was the world's largest and richest city. Buddhism, which originated in India
around the time of Confucius, flourished during the Tang period, becoming thoroughly sinicized
and a permanent part of Chinese traditional culture.

Song Dynasty (960 – 1279 AD)

With a prosperous economy and remarkable cultural achievements, Song Dynasty was
considered as another period of ‘golden age’ after the glorious Tang Dynasty. The Song Dynasty
was the first in world to nationally issue banknotes. This dynasty also saw the first known use of
gunpowder, as well as the first discernment of true north using a compass.
 10

Yuan Dynasty (1279–1368 AD)

During the Yuan Dynasty, China was part of the Mongol Empire. However, Chinese culture not
only survived but was reinvigorated. The unification of the whole territory enhanced the
communication between different ethnic minorities, thus strengthening the national
integration process. The first records of travel by Westerners date from this time. In
1271, Marco Polo travelled to China with his father and uncle over the Silk Road. He worked for
Kublai Khan for seventeen years before sailing home. He brought back ivory, jade, jewels,
porcelain and silk, and told stories about the Chinese use of coal, money and compasses.

Ming Dynasty (1368–1644 AD)

The Ming (Brilliant) dynasty was founded by a peasant and former Buddhist monk who became
a general and led a revolt against the Mongols. He took the name Hong Wu (Vast Military) and
set up his capital in Nanjing - a later Ming emperor would move it back to Beijing. Ming armies
reconquered Annam (north Vietnam) and extended the Great Wall to 4,000 miles to keep back
the Mongols. The Ming Dynasty ruled the country for 276 years. It was one of the most stable
of all Chinese dynasties. During the Ming Dynasty, Zhenhe, one of eunuchs of the fifth Ming
emperor, led seven maritime expeditions to the Pacific and Indian Oceans from 1405 to 1433.
The Ming Dynasty witnessed great literary achievements. Several of the most popular Chinese
novels, including Journey to the West’ and The Golden Lotus were written in this period.

Qing Dynasty (1644 – 1912 AD)

The Qing Dynasty was the last imperial dynasty of China, ruling from 1644 to 1912. The Qing
Empire lasted almost three centuries and formed the territorial base for the modern Chinese
nation.
 11

FOOD HABITS OF CHINA

Chinese cuisine is an important part of Chinese culture, which includes cuisine originating from
the diverse regions of China, as well as from Chinese people in other parts of the world. The
preference for seasoning and cooking techniques of Chinese provinces depend on differences
in historical background and ethnic groups. The most praised "Four Major Cuisines"
are Chuan, Lu, Yue and Huaiyang, representing West, North, South and East China cuisine
correspondingly.[2] The modern "Eight Cuisines" of China
are Anhui , Cantonese, Fujian, Hunan , Jiangsu, Shandong, Sichuan , and Zhejiang cuisines.[3]

Color, smell and taste are the three traditional aspects used to describe Chinese food,[4] as well
as the meaning, appearance and nutrition of the food. Cooking should be appraised with
respect to the ingredients used, knife work, cooking time and seasoning.

NOTEWORTHY PEOPLE FROM CHINA AND THEIR MAJOR CONTRIBUTION

Chairman Mao Zedong (1893 - 1976)

Mao was a Chinese communist leader and the founder of the People's Republic of China. He
was responsible for the disastrous policies of the 'Great Leap Forward'
and the 'Cultural Revolution'. The communists under Mao and the
KMT under Chiang Kai-shek were temporarily allied against Japan
during World War Two, but afterward, civil war broke out between
them, which ended with the communists as victors. Mao declared the
creation of the People's Republic of China (PRC). Although initially
loved by most people across the nation, his unrealistic policies of the
'Great Leap Forward' and 'Cultural Revolution' caused the deaths of
millions of people and the destruction of the cultural heritage of China, leading to widespread
anarchy.
 12

Qin Shi Huang (259 - 210 BC)

Emperor Qin Shi Huang was the first emperor of China. He

is primarily remembered for building the Great Wall of
China, and his tomb with the terracotta army. Being the
first emperor, he greatly influenced the history and culture
of the newly formed nation. He changed many systems of
administration and worked on the concepts of agriculture
and economy by standardizing the currency, laws,
education, taxation, and trade values. He built the Great Wall of China to repel the barbarian
invasions from the north, build great networks of roads and fortification all across his kingdom.
However, he is also known to be a cruel and dictatorial king in many cases, such as ordering the
destruction of all books and manuscripts which originated in previous regimes across the
nation.

JACK MA

Jack Ma born on 10 September 1964 is a Chinese

business magnate, investor, and philanthropist. He is the
co-founder and executive chairman of the Alibaba
Group, a multinational technology conglomerate. As of
January 2019, he is one of China's richest men with a net
worth of $39.1 billion, as well as one of the wealthiest
people in the world. Ma's primary ideology was for an open and market-driven economy.
 13

GEOGRAPHIC OVERVIEW
China is located in Southeast Asia along the coastline of the Pacific Ocean; China is the world's
third largest country, after Russia and Canada. With an area of 9.6 million square kilometers
and a coastline of 18,000 kilometers, its shape on the map is like a rooster. China is bordered by
14 countries -- Korea, Vietnam, Laos, Burma, India, Bhutan, Nepal, Pakistan, Afghanistan,
Tajikistan, Kyrgyzstan, Kazakhstan, Mongolia, and Russia. Marine-side neighbors include eight
countries -- North Korea, Korea, Japan, Philippines, Brunei, Indonesia, Malaysia and
Vietnam. He People's Republic of China has an area of about 9,600,000 km2 (3,700,000 sq mi).

The Chinese climate varies from region to region, since the country is so huge.
In the northeast, where Beijing sits, the summers are hot and dry and the winters are freezing
cold. The north and central regions, including Chengdu, have frequent bouts of rain coupled
with hot summers and cold winters. In the southeast there is plenty of rainfall, semi-tropical
summers and cool winters. Flooding can occur in the central, southern and western regions
and the country in general can experience earthquakes.

The time in China follows a single standard time offset of UTC+08:00 (eight hours ahead
of Coordinated Universal Time), despite China spanning five geographical time zones. The
official national standard time is called Beijing Time domestically and China Standard Time (CST)
internationally.

The major rivers in china listed according to their length are:

1. Yangtze River——6380km
2. Yellow River——5464km
3. Heilongjiang River——3474km
4. Pearl River——2320km
5. Brahmaputra River——2208km (length of its Chinese Course)
 14

6. Lancang River——2161km (length of its Chinese Course)

7. Tarim River——2137km
8. Nujiang River——2013km (length of its Chinese Course)
9. Songhuajiang River——1927km
10. Han River——1577km

The major mountain peaks in china are:

1. The Yellow Mountains- Huangshan City, Anhui Province, East China.

2. Mount Everest- south part of Tingri County in southern Tibet, Mt. Everest, or
Qomolangma in Tibet, is the highest mountain of the world.
3. Mount Taishan (East Great Mountain) located in the middle part of Shandong
Province, and covers Tai’an city and Jinan city
4. Mt. Hengshan locates in Hunan Province
5. Mount Huanshan Situated 100 km to the east of Xian, Mount Huanshan is known as
"The Number One Precipitous Mountain under Heaven".

Did you know?

China has over 100 cities of over 1 million people

China has the greatest diversity of wildlife in the world. There are more than 2,000 species
of terrestrial vertebrates, more than 10 percent of the world's total. There are 1,189 known
species of birds, nearly 500 animal species, more than 210 species of amphibians and 320
species of reptiles. Among the wild animals, there are many rare species found only in China.
These include the giant panda, golden monkey, white-lipped deer, Chinese river dolphin and
Chinese alligator. Giant pandas, recognized as one of China’s national treasures, live in the
remote mountain areas of Sichuan, Gansu and Shaanxi provinces and feed on bamboo. The
 15

panda, called a "living fossil," is a remnant species which thrived during the glacier period of
the Quaternary.
China has 7,000 species of woody plants, of which 2,800 are arbors. The met sequoia, China
cypress, cathaya, silver fir, China fir, golden larch, Taiwan flousiana, Fujian cypress, and
eucommia are trees found only in China. The metasequoia grows to 35 metres in height.
Commonly found in East Asia, North America and Europe one hundred million years ago, it
became extinct by the glacial period of the Quaternary. In 1941, China discovered more than
a thousand metasequoias on the Sichuan-Hubei border. This was one of the greatest
botanical discoveries of the 20th century.

Did you know?

Half of the world’s pigs live in China

The Major shipping ports in China are:

PORT OF SHANGHAI
 16

1. Port of Shanghai

2. Port of Shenzhen

3. Port of Ningbo

4. Port of Qingdao

5. Port of Guangzhou

PAST AND PRESENT GOVERNANCE SYSTEM

The People’s Republic of China has been ruled by the Communist Party since 1949 when it won
the Chinese Civil War by overthrowing the Nationalist government. Under the Constitution, the
Communist party has the complete political authority and governs according to democratic
centralism. This governmental system allows for open discussion about policy decisions, but all
members of the government are required to uphold collective decisions once a vote is made.
Several smaller political parties comprise the United Front, although, they do not hold power or
independence from the Communist party.
The Politburo Standing Committee controls the Communist party and the military; it has
between 4 and 9 members. The majority of governmental power, however, is concentrated in
one position, the Paramount Leader. This leader holds several other titles as well: the General
Secretary of the Communist Party, General Secretary of the Central Committee, Chairman of
the Central Military Commission, and President of the country. The government is further
divided into 4 branches: the legislative, the executive, the judicial, and the military.

Legislative Branch Of The Government of China

The legislative branch of the government of China consists of the highest department of the
Communist party, the National People’s Congress. This body plays a role in debating policy
 17

proposals and mediating discussions among its 2,987 members. Representatives are elected for
5-year terms and meet once a year. Amendments to the constitution are considered after
proposed by at least 20% of its members and are approved by a two-thirds vote. The Congress
also writes and amends laws concerning civil affairs, state issues, and criminal acts. Additionally,
it is responsible for electing the members of the Standing Committee, the President and Vice
President of the country, and the Premier of the State Council. Additionally, the Congress
reviews and approves the National Economic and Social Development Plan and oversees its
proper administration.

Executive Branch Of The Government of China

The executive branch is made up of the State Council, the Premier, and the President. The
President serves as a ceremonial head of state for a 5-year term and has little power within the
government. The Premier acts as a Prime Minister and is head of the 50-member Council, each
member the head of a ministry or government agency. These members manage the provincial
governments and meet once every 6 months. The State Council must answer to the National
People’s Congress and ensure that its legislative decisions are carried out.

Judicial Branch Of The Government of China

The Supreme People’s Court and the Supreme People’s Procuratorate are part of the judicial
branch of the Chinese government. The Supreme Court is the highest in the land, and the
National People’s Congress appoints its 340 judges. These judges oversee the following courts:
economic, criminal, civil, administrative, and special courts. The Chief Grand Justice also serves
as the President over the Supreme Court. The Supreme People’s Procuratorate carries out
investigation and prosecution of crimes. It is managed by the Office of the Procurator-General.

Military Branch Of The Government of China

The Central Military Commission consists of 11 members and is responsible for controlling the
People’s Liberation Army, the People’s Liberation Army militia, and the People’s Armed Police.
 18

It does this by creating military policy and ensuring that it is carried out by the lower offices.
Additionally, this Commission makes decisions about deployment of its armed forces and
budget spending. The head of this Commission is the Chairman, who acts as the Commander-in-
Chief of the military. The National People’s Congress elects the Chairman of the country.

China makes no pretence to be - or to want to be - a democracy in the Western style unlike the
other countries whose political systems are described on this web site. However, I thought it
appropriate to offer a guide to the Chinese political system because the country is the largest in
the world by population and it is a nation of growing economic and political importance in
global affairs, so we would all do well to have some appreciation of how the country is run.
However, it is a political system probably rivalled in its opacity only by the government of North
Korea.

Since the end of the civil war in 1949, the Communist Party of China (CPC) has ruled the country
and operates a pyramid of power which reaches down to every village and every workplace.
The Party's 89-million membership makes it the biggest political party in the world bua huge
factor.

As with the former Communist-controlled USSR and its satellite states, China pretends to be a
multi-party state by technically permitting a limited number of other political parties. The eight
registered minor parties have existed since before 1950. These parties all formally accept the
leadership of the CPC and their activities are directed by the United Front Work Department of
the CPC.

THE CONSTITUTION

The Constitution of the People's Republic of China is a changing document. The first
Constitution was declared in 1954. After two intervening versions enacted in 1975 and 1978,
the current Constitution was declared in 1982. There were significant differences between each
 19

of these versions, and the 1982 Constitution has subsequently been amended no less than five
times (1988, 1993, 1999, 2004 and 2018). In addition, changing Constitutional conventions have
led to significant changes in the structure of Chinese government in the absence of changes in
the actual text of the Constitution.

There is no special organisation tasked with the enforcement of the Chinese Constitution.
Furthermore, under the legal system of the People's Republic of China, courts do not have the
general power of judicial review and cannot invalidate a statute on the grounds that it violates
the Constitution.

The constitutional changes of 2018 are of great importance since they represent a
consolidation of power of the current President Xi Jinping. Firsi, Xi Pinping Thought has been
written into the Constitution, following its addition earlier to the Communist Party's Charter.
Second, the five-year term limit on the positions of President and Vice-President have been
abolished, allowing Xi to serve as long as he wishes.

Every significant decision affecting China is first discussed and approved by a handful of men
who sit on the party's Political Bureau or Politburo which is the nexus of all power in this nation
of 1.3 billion. The 25-member Politburo is elected by the party's Central Committee. New
Politburo members are chosen only after rigorous discussion and investigation of their
backgrounds, experience and views. To reach the top, people need a strong record of
achievement working for the party, to have the right patrons, to have dodged controversy, and
to have avoided making powerful enemies.

Members of the Standing Committee also share out the posts of party General Secretary,
premier, chairman of the National People's Congress, and head of the Discipline Inspection
Commission.

The Politburo controls three other important bodies and ensures the party line is upheld
through these bodies. These are:

 the National People's Congress or parliament

 20

 the State Council, the government's administrative arm

 the Military Affairs Commission which controls the armed forces

The President of China is the head of state. He is currently Xi Jinping who was appointed at the
end of 2012 in the expectation that he would serve for 10 years. He is widely regarded as
having acquired more power and as behaving in a more paranoid fashion than any other leader
since Mao Zedong. He has abandoned the Communist Party's once hallowed tradition of
'collective leadership' in favour of strongman rule by himself. While he is genuinely opposed to
corruption among party officials, he has used his anti-corruption campaign to remove rivals and
consolidate power.

The Premier of China is the head of the government and leads the State Council. He is currently
Li Keqiang who was appponted at the end of 2012 and is expected to serve for 10 years.

Although a relatively recent innovation, introduced in 1997, enforcement of age and term limits
for top Party and State positions has brought a degree of predictability into otherwise opaque
Chinese elite politics. So, over many years, for all senior officials, there has been an official
retirement age of 65 and a limit of two five-year terms in the same post.

This meant that normally the President would serve for two five-year terms and his successor
would effectively be nomintaed five years in advance. However, the current President Xi Jinping
is doing things differently. First, at the 19th Party Congress held in October 2017, he ensured
that no member is young enough to take over from him in 2022. Second, he abolished the term
limit for the Presidency so that he can now serve as long as he wants.

Finally, it should be noted that senior leaders sometimes retain great influence over decisions
and appointments long after they officially step down from power. Part of the reason the elders
wield such influence is because of the patron-protege nature of Chinese politics.
 21

THE CENTRAL COMMITTEE

The Central Committee is elected once every five years by the National Congress of the
Communist Party of China although in fact almost all of these people are approved in advance.
This Central Committee has 205 full members and 171 lower-ranking or "alternate" members".
It meets every couple of months.

The Central Committee is, formally, the "party's highest organ of authority" when the National
People's Congress is not in session. According to the Party Constitution, it is vested with the
power to elect the General Secretary and the members of the Politburo, its Standing
Committee, and the Military Affairs Commission, and to endorse the composition of the
Discipline Inspection Commission. It also oversees work of various powerful national organs of
the party

THE NATIONAL PEOPLE'S CONGRESS

Under China's 1982 constitution, the most powerful organ of state is meant to be the National
People's Congress (NPC), China's unicameral legislature. However, the reality is that this is little
more than a rubber stamp for party decisions.

The Congress is made up of 2,270 delegates elected by China's provinces, autonomous regions,
municipalities and the armed forces. Delegates hold office for five years. The full Congress is
convened for one session in March of each year and lasts a mere two weeks. This means that
China has the largest legislature in the world which meets for the least time in the world.

In theory, the Congress has the powers to change the constitution and make laws. But it is not,
and is not meant to be, an independent body in the Western sense of a parliament. For a start,
about 70% of its delegates - and almost all its senior figures - are also party members. Their
loyalty is to the party first, the NPC second.
 22

What actually tends to happen, therefore, is that the party drafts most new legislation and
passes it to the NPC for "consideration", better described as speedy approval.

The NPC has shown some signs of growing independence over the past decade. For instance, in
a notable incident in 1999, it delayed passing a law bringing in an unpopular fuel tax. It has also
been given greater leeway drafting laws in areas like human rights.

The formal position is that Congress "elects" the country's highest leaders, including the State
President and Vice-President, the Chairman of the government's own Military Affairs
Commission, and the President of the Supreme People's Court.

THE STATE COUNCIL

The State Council is the cabinet which oversees China's vast government machine. It sits at the
top of a complex bureaucracy of commissions and ministries and is responsible for making sure
party policy is implemented from the national to the local level.

In theory, the State Council answers to the National People's Congress, but more often the
State Council submits legislation and measures which the NPC then approves.

The State Council's most important roles are to draft and manage the national economic plan
and the state budget, giving it decision-making powers over almost every aspect of people's
lives. It is also responsible for law and order.

The full council meets once a month, but the more influential Standing Committee comes
together more often, sometimes twice a week. This committee is made up of the country's
premier, four vice-premiers, state councillors and the secretary-general.

THE MILITARY AFFAIRS COMMISSION

China's People's Liberation Army (PLA) - currently 2.25 million strong - has always defended the
party as much as national borders. During the early years of communist rule, most of the
 23

country's leaders owed their positions to their military success during the civil war, and links
between them and the PLA remained very close. However, as this generation has died off and
reforms have been introduced to make the armed forces more professional, the relationship
has shifted subtly.

Party leaders know they are lost without the army's support, as became clear during crises like
the 1989 Tiananmen protests. At the same time, senior military leaders realise they need the
leadership's backing if far-reaching plans to modernise the armed forces are to be paid for.

The party's control over the armed forces and their nuclear arsenal is institutionalised through
the Central Military Affairs Commission. Currently the 11-member Commission has a civilian
chairman (the President Xi Jinping), two uniformed vice chairmen, and eight uniformed regular
members. The eight are the Minister of Defence, the directors of the PLA’s four
headquarters departments, and the commanders of the Navy, Air Force, and strategic missile
forces, known as the Second Artillery Corps.

This Commission has the final say on all decisions relating to the PLA, including senior
appointments, troop deployments and arms spending.

PLA officers are also party members and there is a separate party machine inside the military to
make sure rank and file stay in line with party thinking.

The Military Affairs Commission also controls the paramilitary People's Armed Police (1.5
million strong), which has the politically sensitive role of guarding key government buildings,
including the main leadership compound of Zhongnanhai in Beijing.

THE DISCIPLINE INSPECTION COMMISSION

Party members suspected of corruption, bad management or breaking with the party line are
liable to be brought before the Discipline Inspection Commission, set up to deal with internal
party discipline and to monitor abuses. Indeed, as economic reforms have gathered pace,
corruption has become probably the single most damaging issue for the party's standing.
 24

President has launched an assault on inefficiency and corruption. The targets of the anti-
corruption campaign have included the former head of security Zhou Yongkang, the country's
highest-ranking official to be prosecuted in more than three decades, and Ling Jihua, a top aide
to the former president Hu Jintao. Of course, such actions, as well as combating corruption,
serve to eliminate opponents and consolidate power.

THE COURTS

Unlike in democratic countries, the China's court system is in no sense independent. Both main
legal organs answer to the National People's Congress.

The Supreme People's Procuratorate is the highest legal supervisory body, charged with
safeguarding the constitution, laws and people's rights.

The Supreme People's Court sits at the top of a pyramid of people's courts going down to the
local level. Public security organs are in charge of the investigation, detention and preparatory
examination of criminal cases.

THE PROVINCES

China is governed as 22 provinces, five "autonomous" regions, four municipalities - considered

so important they are under central government control (Beijing, Shanghai, Tianjin and
Chongqing) - and two special administrative regions. The people in charge of these bodies - a
group of about 7,000 senior party and government leaders - are all appointed by the party's
organisation department.

Although many are powerful individuals - the governor of Sichuan province rules over 80 million
people - their ability to deviate from the party line is limited because they know their next
career move would be at stake. Nevertheless, most analysts agree the centre has lost some
control to the regions in the past two decades, especially in the economic field.
 25

CONCLUSION

The Chinese Communist Party is almost schizophrenic in its economic policies. On the one hand,
China is still a communist society but, on the other hand, its economy is more capitalist than
most European countries. This contradiction is blurred by language with the use of vague
phrases like "socialism with Chinese characteristics" and "the socialist market economy". The
word 'capitalist' is rarely used; instead policymakers talk of "economic development" and
"commercial business".

On one of my four trips to China, I was told by one person with an eye on the recent history of
Russia's economy: "Socialism has not saved China; China has saved socialism".

Meanwhile politics is almost invisible in China. Although the country is still controlled by the
Communist Party, there is none of the overt sloganising that one sees in communist countries
like Vietnam or Cuba (both of which I have also visited). Real politics takes place opaquely in the
organs of the Communist Party, not publicly on the streets or in the media.

Most citizens - even educated ones - have no interest in politics generally or democracy in
particular. Instead there seems to be an unwritten and unannounced compact between the
Party and the people: 'You leave us to run the country and we'll leave you to make as much
money as you can'.

After the Roman Republic ceased to exist and the Roman Empire began, the Roman satirist
Juvenal wrote: "Two things only the people anxiously desire - bread and circuses." The Chinese
Communist Party leadership appears to be practicising a 21st century version of this dictum: as
far as 'bread' is concerned, food is plentiful, living standards are rising and consumer goods
flood the markets while, as far as 'circuses' is concerned, television and cinema provide
exuberant entertainment, theme parks and scenic areas proliferate, and domestic tourism is
booming. Meanwhile politics is for the few, behind closed doors, and totally in the confines of
the Communist Party.
 26

It remains to be seen whether this massive disconnect between economics and politics - the
former liberal, the latter totalitarian - can survive and, if not, whether the changes are smooth
or disruptive.

But fundamental change is unlikely under the current leadership. Early in 2014, President Xi
Jinping said in a speech at the College of Europe in the Belgian city of Bruges: "Constitutional
monarchy, imperial restoration, parliamentarism, a multi-party system and a presidential
system, we considered them, tried them, but none worked."

Meanwhile Xi has consolidated his personal power to an extent unrivalled since Mao and
indeed, at the Party Congress in 2017, had written into the Party Charter "Xi's Thoughts on
Socialism with Chinese Characteristics for a New Era". Since then, in 2018 his Thoughts have
actually been written into the nation's Constitution and the term limit of the Presidency has
been abolished.

Functioning of government in China

The Central Government of the People's Republic of China is divided among several state
organs:

1. the legislative branch, the National People's Congress and its Standing Committee
2. the presidency, including the President and the Vice-President
3. the executive branch, the State Council (constitutionally synonymous with the "Central
People's Government"), whose Premier is the head of government
4. the military branch, the People's Liberation Army (PLA) and the People's Armed
Police (PAP), via the Central Military Commission, whose Chairman is the Commander-
in-chief
5. the supervisory branch, the National Supervisory Commission
6. the judicial branch, the Supreme People's Court
7. the prosecutorial branch, the Supreme People's Procuratorate
 27

The legal power of the Communist Party is guaranteed by the PRC Constitution and its position
as the supreme political authority in the PRC is realised through its comprehensive control of
the state, military, and media. According to a prominent government spokesman:

We will never simply copy the system of Western countries or introduce a system of multiple
parties holding office in rotation; although China’s state organs have different responsibilities,
they all adhere to the line, principles and policies of the party.

The primary organs of state power are the National People's Congress (NPC), the President, and
the State Council. Members of the State Council include the Premier, a variable number of Vice
Premiers (now four), five State Councilors (protocol equal of vice premiers but with narrower
portfolios), and 29 ministers and heads of State Council commissions. During the 1980s there
was an attempt made to separate party and state functions, with the party deciding general
policy and the state carrying it out. The attempt was abandoned in the 1990s with the result
that the political leadership within the state are also the leaders of the party. This dual
structure thereby creates a single centralized focus of power.

At the same time there has been a move to separate party and state offices at levels other than
the central government. It is not unheard of for a sub-national executive to also be party
secretary. This frequently causes conflict between the chief executive and the party secretary,
and this conflict is widely seen as intentional to prevent either from becoming too powerful.
Some special cases are the Special Administrative Regions of Hong Kong and Macau where the
Mainland Chinese national laws do not apply at all and the autonomous regions where,
following Soviet practice, the chief executive is typically a member of the local ethnic group
while the party general secretary is non-local and usually Han Chinese.

Under the Constitution of China, the NPC is the highest organ of state power in China. It meets
annually for about two weeks to review and approve major new policy directions, laws, the
budget, and major personnel changes. Most national legislation in the PRC is adopted by
the Standing Committee of the National People's Congress. Most initiatives are presented to
the NPCSC for consideration by the State Council after previous endorsement by the
Communist Party's Politburo Standing Committee. Although the NPC generally approves State
 28

Council policy and personnel recommendations, the NPC and its standing committee has
increasingly asserted its role as the national legislature and has been able to force revisions in
some laws. For example, the State Council and the Party have been unable to secure passage of
a fuel tax to finance the construction of expressways.

Electoral process

Elections in China are based on a hierarchical electoral system, whereby local People's
Congresses are directly elected, and all higher levels of People's Congresses up to the National
People's Congress, the national legislature, are indirectly elected by the People's Congress of
the level immediately below. There are five central and local levels of people’s congresses in
China. They are the National People’s Congress, the people’s congresses of provinces,
autonomous regions and municipalities directly under the Central Government, the people’s
congresses of cities divided into districts, and autonomous prefectures, the people’s congresses
of cities not divided into districts, municipal districts, counties and autonomous counties, and
the people’s congresses of townships, ethnic minority townships and towns. The people’s
congresses at all levels are constituted through democratic elections.

The basic points of China’s electoral system are:

 All citizens of the People’s Republic of China who have reached the age of 18 have the
right to vote and stand for election, regardless of ethnic background, race, sex,
occupation, family background, religious belief, education level, property status or
length of residence. People who have been deprived of their political rights according to
law do not have the right to vote and stand for election. One voter has only one vote in
each election.
 Deputies to the people’s congresses of cities not divided into districts, municipal
districts, counties, autonomous counties, townships, ethnic minority townships and
towns are elected directly by their constituencies. Deputies to the NPC and the people’s
congresses of the provinces, autonomous regions, municipalities directly under the
 29

Central Government, cities divided into districts, and autonomous prefectures are
elected by the people’s congresses at the next lower level.
 All political parties and mass organizations may either jointly or separately recommend
candidates to be deputies. Candidates may also be recommended by a minimum of 10
voters in a direct election and 10 deputies in an indirect election.
 In both direct and indirect elections, the number of candidates must exceed the number
of delegates to be elected and the elections must be competitive. In a direct election,
the number of candidates should exceed the number to be elected by one-third to
100%. In an indirect election, the number of candidates should exceed the number to be
elected by 20% to 50%.
 Voters may vote for a candidate, vote against a candidate, vote for someone else, or
abstain. In a direct election, more than half of the eligible voters in the election district
must vote in order for the election to be valid, and candidates who receive the votes of
a majority of the voters are elected. In an indirect election, candidates receiving the
votes of a majority of the deputies voting are elected. The costs of elections are paid for
out of the state treasury.
 China's Internal Pluralism Is Nothing to Cheer About. The Communist Party has 80
million members -- with a collective leadership of nine members, growing local power,
and calls for internal party democracy, there is far more pluralism in theChinese system
than first meets the eye.

Civil Liberties

 Freedom of speech. Political protest in Hong Kong against the detention of Chinese
Nobel Peace Prize laureate Liu Xiaobo.
 Freedom of the press
 Freedom of movement
 Freedom of association
 Religious freedom
 30

 Political freedom
 Execution protocol
 Criticism

Dedication to Communism

 Government no longer expects people to actively support communism, so long as the

don’t actively oppose it.
 Since 1978, leaders have chosen to be judged by their ability to generate economic
growth and increased standards of living for the people.
 In modern China, legitimacy is directly tied to economic performance
 In 2006, in colleges all over the country, the state reduced the number of required
political ideology courses from 7 to 4

Economic Development

 The government has supported and advanced a policy of “some get rich first.”
 This, of course, has led to tremendous income inequality.
 Rural income is 30% lower than urban.
 Government also supports a policy of “first development, then environment.”
 Economic development has become the key in promotion through the system

Legal Reform

 1982 constitution subjects the party to authority of law

 1996 reform gives the right to counsel at early stages of criminal investigation
 1997 reform created laws dealing with economic crime
 It also eliminated the crime of “counterrevolution”
 Instituted property rights and contract law
 31

 Done to encourage foreign investment, to provide codes for growing capitalism, and to
appease outside pressure (particularly surrounding the Olympics)

Problems with law

 Capital punishment used in “lesser crimes” (e.g., rape, theft, smuggling, and child
trafficking).
 Trials are inquisitorial in nature – by the time you get there, you’re already guilty
 There are several thousand political prisoners despite the removal of the
counterrevolutionary law
 No judicial review
 The party controls the legal system

Military in China

The Chinese People's Liberation Army (PLA) is the armed forces of the People's Republic
of China (PRC) and its founding and ruling political party, the Communist Party of China (CPC).
The PLA is the world's largest military force and constitutes the second largest defence budget
in the world.

Services Branch

The PLA encompasses five main service branches: the Ground Force, the Navy, the Air Force,
the Rocket Force, and the Strategic Support Force. Following the 200,000 troop reduction
announced in 2003, the total strength of the PLA has been reduced from 2.5 million to just
under 2.3 million. Further reforms will see an additional 300,000 personnel reduction from its
current strength of 2.28 million personnel. The reductions will come mainly from non-combat
ground forces, which will allow more funds to be diverted to naval, air, and strategic missile
forces. This shows China's shift from ground force prioritisation to emphasising air and naval
power with high-tech equipment for offensive roles over disputed coastal territories.
 32

Ground Force

The PLA has a ground force with 975,000 personnel, about half of the PLA's total manpower of
around 2 million. The ground forces are divided among the five theatre commands as named
above. In times of crisis, the PLA Ground Force will be reinforced by numerous reserve and
paramilitary units. The PLAGF reserve component has about 510,000 personnel divided into 30
infantry and 12 anti-aircraft artillery (AAA) divisions. In recent years two amphibious
mechanised divisions were also established in Nanjing and Guangzhou MR. At least 40 percent
of PLA divisions and brigades are now mechanised or armoured, almost double the percentage
before 2015.

Navy

Until the early 1990s, the navy performed a subordinate role to the PLA Land Forces. Since then
it has undergone rapid modernisation. The 240,000 strong People's Liberation Army Navy
(PLAN) is organised into three major fleets: the North Sea Fleet headquartered at Qingdao,
the East Sea Fleet headquartered at Ningbo, and the South Sea Fleet headquartered
in Zhanjiang. Each fleet consists of a number of surface ship, submarine, naval air force, coastal
defence, and marine units.

The navy includes a 15,000 strong Marine Corps (organized into two brigades), a 26,000
strong Naval Aviation Force operating several hundred attack helicopters and fixed-wing
aircraft. As part of its overall programme of naval modernization, the PLAN is in the stage of
developing a blue water navy. In November 2012, then President Hu Jintao reported to the
Chinese Communist Party Congress his desire to “enhance our capacity for exploiting marine
resource and build China into a strong maritime power.”

Air Force

The 395,000 strong People's Liberation Army Air Force is organized into five Theater Command
Air Forces (TCAF) and 24 air divisions. The largest operational units within the Aviation Corps is
the air division, which has 2 to 3 aviation regiments, each with 20 to 36 aircraft. The surface-to-
 33

air missile (SAM) Corps is organized into SAM divisions and brigades. There are also three
airborne divisions manned by the PLAAF. J-XX and XXJ are names applied by Western
intelligence agencies to describe programs by the People's Republic of China to develop one or
more fifth-generation fighter aircraft.

Rocket force

The 100,000 strong People's Liberation Army Rocket Force (PLARF) is the main strategic missile
force of the PLA. It controls China's nuclear and conventional strategic missiles. China's total
nuclear arsenal size is estimated to be between 100 and 400 (thermos) nuclear weapons. The
PLARF has approximately 100,000 personnel and six ballistic missile divisions (missile corps
bases). The six divisions are independently deployed in different theater commands and have a
total of 15 to 20 missile brigades.

Strategic Support Force

Founded on December 31, 2015 as part of the first wave of reforms of the PLA, the People's
Liberation Army Strategic Support Force is the newest branch of the PLA. It as strength of
175,000. Initial announcements regarding the Strategic Support Force did not provide much
detail, but Yang Yujun of the Chinese Ministry of Defense described it as a combination of all
support forces. Additionally, commentators speculate that it will include high-tech operations
forces such as space, cyberspace and electronic warfare operations units, independent of other
branches of the military. Another expert, Yin Zhuo, said that "the major mission of the PLA
Strategic Support Force is to give support to the combat operations so that the PLA can gain
regional advantages in the astronautic war, space war, network war and electromagnetic space
war and ensure smooth operations."
 34

Presence/existence of Monarchy in China

Use of the title is considered to have officially ended with the abdication of Puyi in 1912
following the Xinhai Revolution and the establishment of the Republic of China, although there
were two failed attempts to reestablish an imperial government in China in 1915 and 1917.

Religious heads in China

Under following leaders, religious organisations were given more autonomy. The government
formally recognizes five religions: Buddhism, Taoism, Catholicism, Protestantism
and Islam (though the Chinese Catholic Church is independent of the Catholic Church in Rome).

Although China is officially an Atheist country, many Chinese people are religious. The main
religions in China are Buddhism, Chinese folklore, Taoism and Confucianism.

In recent years, the number of Chinese Christians has increased significantly; Christians were 4
million before 1949 (3 million Catholics and 1 million Protestants), and are reaching 67 million
today, Christianity is reportedly the fastest growing religion in China with average annual rate
of 7%.

Economic Freedom Index

China’s economic freedom score is 58.4, making its economy the 100th freest in the 2019
Index. Its overall score has increased by 0.6 point, with higher scores on judicial effectiveness
and labor freedom outpacing a sharp drop in fiscal health. China is ranked 20th among 43
countries in the Asia–Pacific region, and its overall score is below the regional and world
averages.

Cost Of Living In China

The typical salary can range from an average of 10,000 – 15,000 RMB per month. This converts
to roughly $1500 - $2200 USD per month. Now while this may seem like a low salary when
compared to your home country, the thing to keep in mind is that the cost of living in China is
overall dramatically lower.
 35

World Competitiveness Index

The country's favourable demographic has earned it a rank of 58 among 140 countries in
the World Economic Forum's (WEF) latest global competitiveness index. This was mainly
because it is home to the third largest market in the world after China and the US, according to
the WEF report

Corruption Index

China scored 39 points out of 100 on the 2018 Corruption Perceptions Index reported by
Transparency International. Corruption Index in China averaged 34.49 Points from 1995 until
2018, reaching an all time high of 41 Points in 2017 and a record low of 21.60 Points in 1995.

Quality of Life in China

China's economic prosperity is spreading. Riding the upsurge of economic success has improved
the lives of millions. From more comfortable living standards to staggering raises in salary, life
for the average Chinese citizen outclasses many Western nations, and has had a massive impact
on the lives of foreign visitors to China. The amount of things to do and see have increased ten-
fold, safety standards have shot through the roof, and the overall level of comfort is rivaled by
few. All to say, China's quality of life has improved, and improved for us all.

 Transportation
 Construction
 Health Standards
 Public Safety
 Better "Quality of Life" for the China Tourist
 36

Currency of China

Renminbi

In conversion it is 10.27 Indian Rupee.

Chinese Money. The official currency in China is

the Renminbi (RMB or CNY) or in Chinese "Ren-min-bi". The basic unit is the yuan also known as
"kuai", which equals 10 jiao, which is then divided into 10 fen. Paper currency comes in
1.2,5,10,50 and 100 yuan notes.

PPP Concept

Transport infrastructure is the most important area in PPP application in China at Present.  Up
till now, a total of 6,997 PPP projects have been incorporated into the MOF’s PPP information
system, and the total investment of which has reached 8.13 trillion RMB.  PPP models have
been applied among19 industries in China, including energy, transport, water conservancy,
ecological construction and environmental protection, municipal engineering, regional
development, agriculture, forestry, science and technology, government-subsidized housing,
tourism, healthcare, the seniors housing & care, education, culture, sports, social security,
 37

government infrastructure, and others.  Currently, the number of transport infrastructure

projects using PPP in China is 761, making up 10.9% of the total; the investment on the PPP
projects in transport sector is about 2.23 trillion RMB, accounting for 27.47% of the total.

China's economic reform is a long-term plan to shift from a command economy to a mixed
economy. That means its recent slowdown in economic growth is intentional. It's not a sign of a
collapse. It's consistent with a long-term plan Chinese President Xi Jinping released on
November 16, 2013. That plan was updated in December 2015.

The “Made in China 2025” plan recommends advances in technology. Specifically big data,
aircraft engines, and clean cars. China has become a world leader in solar technology. It is
cutting back on steel and coal production. China's leaders hammered out details of the five-
year plan it drafted in October. It will continue the reforms outlined in 2013. Global leaders
have become more interested in President Xi's plans now that.

If you understand this blueprint for economic reform, all the warnings about China's slowdown
or collapse will be less alarming. That includes the 3 percent drop in the yuan to
dollar exchange rate and the July drop in China's stock market in 2015. It also explains
China's desire for the yuan to become a global reserve currency. China has become the world's
largest economy

China's Economic Reform Plan

China's reform will shift the economy from one based on government spending, state-run
companies, and low-cost exports. It moves it toward private investment, entrepreneurial
innovation, and domestic consumption. China needs to reduce overcapacity in factories. It must
allow the market to absorb a stockpile of newly built and vacant homes. It wants to also lower
business costs for entrepreneurs. As a result, China is willing to accept a slower rate of growth
of around 6.5 percent.
 38

China's state-owned companies are the pillars of its economic growth. But many are bloated,
ineffective, and unprofitable. They are in the steel, glassworks, and other manufacturing
industries. The reforms modernized them to attract private investors. But they created a glut
of commodities. The oversupply caused prices to plummet which consequently sabotaged the
privatization efforts.

The government will loosen price controls on water, electricity and natural
resources. Companies in these industries can consolidate and become larger. But they must
become profitable.

They will also be listed on China's stock market to hold them accountable. In return, they will
pay 30 percent of earnings as dividends to the government. Proceeds will be used to fund social
security programs by 2020. That allows the Chinese people to save less, spend more, and boost
demand.

The “Made in China 2025” plan comprehensively upgrades the manufacturing industry. It
focuses on innovation and quality over quantity. China sees an opportunity in being a world
leader in green development. To achieve these ends, China will nurture its human talent.

Innovation will flourish only if China strengthens the protection of intellectual property rights.
The government must allow firms to declare their own technology standards. They must also be
free to participate in international standards setting.

The government creates 40 manufacturing innovation centers by 2025. It also wants source 70
percent of core manufacturing materials domestically by 2025.

The plan prioritizes 10 sectors:

1. New Advanced Information Technology

2. Automated Machine Tools & Robotics
3. Aerospace and Aeronautical Equipment
4. Maritime Equipment and High-Tech Shipping
 39

5. Modern Rail Transport Equipment

6. New-Energy Vehicles and Equipment
7. Power Equipment
8. Agricultural Equipment
9. New Materials
10. Biopharma and Advanced Medical Products

Banking reform

It will create a competitive financial system. In the past, the government lowered interest rates
to make borrowing easier. But the American Enterprise Institute said only saddled companies
with more debt. Corporate debt is 160 percent of GDP, double the U.S. level of 70 percent.
China has gotten by with a large shadow banking system that substituted for small private
banks. But that created lots of corruption.

In 2014, the government insured bank deposits. It then allowed banks to raise interest rates for
consumer deposits. Those two moves gave savers more to spend and banks more to lend. The
government also encouraged the creation of more privately-held smaller banks. They are
financing the innovative new companies that drive competition.

Innovation will help these companies grow enough to launch an initial public offering. In the
past, the government decided which companies could list stocks on the market. The reform will
allow the companies to make their own decisions.

This greater risk is being carefully introduced. The government will allow some companies to
default without bailing them out. That will create bank losses that the government will try to
manage.

Un-employment
4.09 percent
 40

The statistic shows the unemployment rate for China from 2012 to 2017, with projections up
until 2023. In 2012, China's unemployment rate ranged at about 4.09 percent. From the
statistic at hand one can see that the unemployment rate in China has been fairly constant at
around four percent over the last few years. Already, the economy is widely expected to slow
from around 6.5 percent growth to just above 6 percent. "We think the biggest risk in the near
term is rising unemployment around the Lunar New Year."

Environment in China

The six main categories of environmental problems of China are: air pollution, water problems,
soil problems, habitat destruction, biodiversity loss and mega projects. ... Many of
the Chinese citizens started to wonder if air pollution is the cause of the increase of lung cancer.
China is home to a diverse landscape of wildlife. It is considered to be one of the megadiverse
countries in the world. Many animal species are endemic to China. China has a diverse flora,
with more than 30,000 plant species native to the country.

Environmental Issues

Rapid industrialization, population growth, and lax environmental oversight have caused many
environmental issues, such as large-scale pollution in China. As of 2013, Beijing, which lies in a
topographic bowl, has significant industry, and heats with coal, is subject to air
inversions resulting in extremely high levels of pollution in winter months.

In January 2013, fine airborne particulates that pose the largest health risks, rose as high as 993
micrograms per cubic meter in Beijing, compared with World Health Organization guidelines of
no more than 25. The World Bank estimates that 16 of the world's most-polluted cities are
located in China.

Many of the Chinese citizens started to wonder if air pollution is the cause of the increase of
lung cancer. This question began to rise because the citizens in China must constantly wear face
masks to avoid breathing in the hazardous particles from their polluted skies. Some experts
agree that it is the reason, but others say there isn't enough evidence. Wang Ning, deputy
 41

director of the Beijing Office for Prevention and Control, says he has seen a rise in a certain
cancer called adenicarcinoma, which is a mucus that is seen as a side effect from pollution.
China's lung cancer rate is 32% of the entire world's lung cancer patients. Meanwhile, as lung
cancer increases, gastric, esophageal, and cervical cancer have all decreased in China.

Agriculture in China

Agriculture is a vital industry in China, employing over 300 million farmers. China ranks first in
worldwide farm output, primarily producing rice, wheat, potatoes, tomato, sorghum, peanuts,
tea, millet, barley, cotton, oilseed and soybeans. Agriculture is a vital industry in China,
employing over 300 million farmers. China ranks first in worldwide farm output, primarily
producing rice, wheat, potatoes, tomato, sorghum, peanuts, tea, millet, barley, cotton, oilseed
and soybeans. China feeds 22 percent of the world population with only seven percent of the
planet's arable land. Land is heavily utilized for agriculture. Vegetables are planted on road
embankments, in traffic triangles and right up the walls of many buildings. Even so since 1949
China has lost one fifth of its arable land. Only about 10 to 15 percent of the land in China is
good for agriculture (compared to 1 percent in Saudi Arabia, 50 percent in India, 20 percent in
the United States, and 32 percent in France). There is 545,960 square kilometers of irrigated
land in China. Forty percent of China's crop land is irrigated, compared to 23 percent in India.
The average yield per acre in China is double that of India. China traditionally has struggled to
feed its large population. Even in the twentieth century, famines periodically ravaged China's
population. Great emphasis has always been put on agricultural production, but weather, wars,
and politics often mitigated good intentions. With the onset of reforms in the late 1970s, the
relative share of agriculture in the gross domestic product (GDP) began to increase annually.
Driven by sharp rises in prices paid for crops and a trend toward privatization in agriculture,
agricultural output increased from 30 percent of GDP in 1980 to 33 percent of GDP by 1983.
Since then, however, agriculture has decreased its share in the economy at the same time that
the services sector has increased. By 2004 agriculture (including forestry and fishing) produced
only 15.2 percent of China's GDP but still is huge by any measure. Some 46.9 percent of the
 42

total national workforce was engaged in agriculture, forestry, and fishing in 2004. China is the
world's top consumer of meat and grain. As it becomes more affluent people consume more
meat and cooking oil and this has lead to increased demand for soybeans as an oil source and
feed for livestock. China also uses more fertilizer that any other country.

Aging Population of China

 The current population of China is 1,418,845,950 as of Thursday, April 4, 2019, based on

the latest United Nations estimates.

 China population is equivalent to 18.41% of the total world population.

 China ranks number 1 in the list of countries (and dependencies) by population.
 The population density in China is 151 per Km2 (392 people per mi2).
 The total land area is 9,388,211 Km2 (3,624,807 sq. miles)
 60.4 % of the population is urban (857,055,542 people in 2019)
 The median age in China is 37.3 years.
 43

Terrorism in China

 29 December 2016

Xinjiang

Islamic militants drove a vehicle into a yard at the county Communist party offices and

set off a bomb but were all shot dead. Three people were wounded and one other died.

 18 September 2015

Aksu, XinjiangSogan colliery attack

An unidentified group of knife-wielding men attacked off-duty workers at a coalmine,

killing 50, among them 5 police officers.[

 24 June 2015

Xinjiang

Group killed several police with knives and bombs at traffic checkpoint before 15

suspects died in armed response

 28 November 2014

Xinjiang

Militants with knives and explosives attacked civilians, 15 dead and 14 injured. 14 of the

15 deaths were attackers

 22 May 2014
 44

Ürümqi, Xinjiang

Two sport utility vehicles (SUVs) carrying five assailants were driven into a busy street

market in Ürümqi. Up to a dozen explosives were thrown at shoppers from the windows

of the SUVs. The SUVs crashed into shoppers then collided with each other and

exploded. 43 people were killed, including 4 of the assailants, and more than 90

wounded.

 26 June 2013

Lukqun, Xinjiang

At least 35 people were killed in clashes between ethnic Uyghurs and police in the

deadliest altercation in the region since 2009. Chinese official media reported that a

group of 17 knife-wielding Uyghur men attacked a police station and government

building. Chinese authorities pronounced the event a terrorist attack, and blamed

separatists and overseas forces for fomenting tensions. The World Uyghur Congress

blamed the event on "continued suppression and provocation" by Chinese authorities in

the region.Foreign media outlets were prevented from visiting the area to investigate.

 29 June 2012

Xinjiang

Tianjin Airlines Flight GS7554

Chinese official media reported that six men attempted to hijack Tianjin Airlines flight

GS7554 from Hotan to Urumqi, Xinjiang. The men reportedly sought to gain access to

cockpit ten minutes after takeoff, but were stopped by passengers and crew. A
 45

spokesperson for the Xinjiang government said the men were ethnic Uyghurs. Xinhua

reported at least 10 passengers and crew were injured when six hijackers tried to take

control of the aircraft. The World Uyghur Congress contested the official account of

events, claiming instead that a dispute over seating broke out between Uyghurs and

ethnic Han. The WUC suggested the event was being used as a pretext to "reinforce

repression" in Xinjiang.

 30–31 July 2011

Kashgar, Xinjiang

2011 Kashgar attacks

At least 18 people died in a series of alleged terrorist attacks in the city of Kashgar.

According to state-run media accounts, the violence began when two Uyghur men

hijacked a truck, ran it into a crowded street, and started stabbing people, killing six.

The attack ended when the assailants were overpowered by the crowd, which killed one

attacker. On the second day, state media reported that a "group of armed terrorists"

stormed a restaurant, killed the owner and a waiter, and set it ablaze. They then

proceeded to indiscriminately kill four more civilians. Armed clashes then reportedly

ensured, ending with police capturing or killing the attackers. The Turkistan Islamic

later claimed responsibility for the attack. One of the suspects appeared in a TIP video

training in Pakistan.
 46

 19 August 2010

Aksu, Xinjiang

According to Chinese media reports, six ethnic Uyghur men were allegedly involved in

loading a vehicle with explosives and driving into a group of security officers at a

highway intersection near Aksu, Xinjiang. Seven people, including two attackers, were

killed, according to police. In the wake of the attack, authorities in the region vowed to

crack down "relentlessly" on criminal activity.

ABOUT THE COUNTRY

CAPITAL OF CHINA:

Beijing, which means "Northern Capital", is the capital of the People’s Republic of China and
one of the most heavily populated cities in the world. The Beijing Capital International Airport
is the second busiest in the world by passenger traffic.

SYMBOLS OF PEOPLE’S REPUBLIC OF CHINA

NATIONAL FLAG

The National flag of China was officially adopted on

October 1, 1949. The red of the Chinese flag symbolizes
the communist revolution, and it's also the traditional
color of the people. The large gold star represents communism, while the four smaller stars
 47

represent the social classes of the people. In addition, the five stars together reflect the
importance placed on the number five in Chinese thought and history.

Did you know?

The current Chinese flag was selected out of a total of 2992 entries

NATIONAL ANTHEM

The national anthem of China is the "March of the Volunteers". Its lyrics were composed
by Peot and playwright Tian Han and its music was composed by Nie Er.

NATIONAL ANIMAL

The national animal of China is the giant panda, a

bear native to south-central China.

The Chinese dragon is a legendry creature appearing in Chinese

mythology and folklore.
 48

NATIONAL BIRD

The red-crowned crane or Manchurian crane is a

large East Asian crane and among the rarest cranes in
the world. It is found in Siberia (eastern Russia),
northeastern China, and the Mongol Daguur Strictly
Protected Area in northeastern Mongolia

NATIONAL FRUIT

The fuzzy kiwifruit is the national fruit of China. It has fuzzy,

dull brown skin and tangy, bright green flesh.

NATIONAL CURRENCY

The Renminbi is the official currency of the People's Republic of China. The Yuan is its
basic unit. The ISO code for renminbi is CHY.

NATIONAL TREE
Ginkgo is the only living species in the division Ginkgophyta, all
others being extinct. Six ginkgo trees survived the atomic bombing of
Hiroshima.
 49

NATIONAL SPORT

China dominates the top of men’s world ranking in table tennis with Ma Long, Fan Zhendong,
Xu Xin and Lin Gaoyuan.

MAJOR CITIES IN CHINA

1. Hong Kong - International Trade Center of China

Urban Population: approximately 7.15 million (2017)

Population density of Hong Kong is ranked as the third of the world. Hong Kong has
become on the world’s major manufacturing and financial centers.

2. Shanghai - The Largest City of China

Urban Population: approximately 14.33 million (2015)

Shanghai, a city directly under the Central Government, is China's largest city. Major
industries include metallurgy, machine-building, shipbuilding, chemicals, electronics,
 50

instruments and meters, textiles and other light industries, in addition to its highly
developed commerce, banking and ocean-going shipping industry.

3. Beijing - The Capital of China

Urban Population: approximately 21.72 million (2016)
Reputed as the world’s historical city and one of the top seven ancient capitals in China,
Beijing has been the capital of China since Lioa Dynasty, 800 years till now. The city of
Beijing has preserved the imperial architecture of the Ming Dynasty well. Another highlight
of Beijing is the Great Wall which is regarded as a symbol of China.

4. Guangzhou - The Third Largest City in China

Urban Population: approximately 13.5 million (2016)
As one of the most prosperous trade and business cities in China, Guangzhou is a symbol of
China’s trade and economy power. It is the largest and most important gateway in south
China.

Did you know?

China’s railway lines are so extensive and long that they could loop around earth twice

POPULATION AND DISTRIBUTION OF POPULATION

The demographics of China demonstrate a large population with a relatively small youth
component, partially a result of China's one-child policy. China's population reached the
billion mark in 1982.

In 2019, China's population stands at 1.418 billion, the largest of any country in the world.
According to the 2010 census, 91.51% of the population was Han Chinese, and 8.49% were
minorities. China's population growth rate is only 0.59%, ranking 159th in the world. China
conducted its sixth national population census on 1 November 2010.[3] Unless otherwise
 51

indicated, the statistics on this page pertain to mainland China only; see also Demographics
of Hong Kong and Demographics of Macau.

In the 11 provinces, special municipalities, and autonomous regions along the southeast
coast, population density was 320.6 people per km2.

Did you know?

CHINA IS THE WORLD’S MOST POPULOUS COUNTRY. With more than 1.4 billion people,
China holds the world record for having the largest population on Earth.

PER CAPITA INCOME

The socialist market economy of the People's Republic of China is the world's second largest
economy by nominal GDP and the world's largest economy by purchasing power parity.
Until 2015, China was the world's fastest-growing major economy, with growth rates
averaging 6% over 30 years. According to the IMF, on a per capita income basis China
ranked 71st by GDP (nominal) and 78th by GDP (PPP) per capita in 2016. The country has an
estimated $23 trillion worth of natural resources, 90% of which are coal and rare earth
metals. China also has the world's largest total banking sector assets of $39.9 trillion (252
trillion CNY) with $26.54 trillion in total deposits.

GROSS DOMESTIC PRODUCT

The GDP of China is $14.172 trillion (nominal; 2019 EST.) And $27.449 trillion (PPP; 2019
EST.) and GDP Growth rate is 6.6% (2018).
 52

INTERNATIONAL INDEXES

S.NO. INDEX RANKING

1 Global Findex 2017 1st

2 Ease of Doing Business 46th

3 Largest Overseas holder of US 1st

Government Securities
4 Economic Freedom Index 100th

5 TI Corruption Perceptions Index 79 of 175

6 Global Innovation Index 25 of 128

OFFICIAL LANGUAGE
Standard Chinese (known in China as Putonghua), a form of Mandarin Chinese, is the official
national spoken language for the mainland and serves as a lingua franca within the
Mandarin-speaking regions.

ETHNIC GROUPS AND CULTURE

Han Chinese is the largest ethnic group in mainland China, where (as of 2010) some 91.51%
of the population was classified as Han (~1.2 billion).
 53

Minority Ethnic groups in China are:

S. NO. ETHNIC GROUPS POPULATION (IN MILLION)

1 Zhuang 16.9
2 Hui 10.5
3 Manchu 10.3
4 Uyghur 10
5 Miao 9.4
6 Yi 8.7
7 Tujia 8.3
8 Tibetan 6.2
9 Mongol 5.9
10 Dong 2.8

INDUSTRY

IMPORT AND EXPORT OF THE COUNTRY “CHINA”

China is the largest export economy in the world and the 33rd most complex economy
according to the Economic Complexity Index (ECI). In 2017, China exported $2.41T and
imported $1.54T, resulting in a positive trade balance of $873B.

Top exports of china:

EXPORTS AMOUNT
Cotton $15 billion
Tea $1.5 billion
Rice $378.8 million
Potatoes $227.2 million
Soya beans $108.5 million
 54

China’s other notable exports are:

1. Electrical machinery, equipment: $557.1 billion (26.3% of total exports)

2. Machinery (including computers): $344.8 billion (16.3%)

3. Furniture (including bedding, lighting, prefab buildings, signs: $89.5 billion (4.2%)

4. Knit or crochet clothing, including accessories: $75 billion (3.5%)

5. Clothing, accessories (excluding knit or crochet items): $72.8 billion (3.4%)

6. Optical, technical, and medical apparatus: $67.9 billion (3.2%)

7. Plastics and associated items: $64 billion (3%)

8. Vehicles: $60.4 billion (2.9%)

9. Iron and steel products: $53.1 billion (2.5%)

10. Footwear: $47.8 billion (2.3%)

Did You Know?

The total annual value of the country’s exports equates to approximately $1,500 for
every Chinese resident.

TOP IMPORTS OF CHINA:

IMPORTS AMOUNT

Mineral fuels including oil $116.2 billion

Iron ore $57.1 billion

Copper & Copper Ore $53.2 billion

 55

Oil Seeds e.g. canola $38.3billion

Coal $11.5 billion

China’s other notable Imports:

1. Electronic equipment: $431.6 billion

2. Electrical machinery and equipment: $414.3 billion

3. Machinery (including computers): $147.8 billion

4. Optical, technical, and medical apparatus: $92.6 billion

5. Vehicles: $71.5 billion

6. Plastics, and plastic articles: $61 billion

7. Organic chemicals: $43.9 billion

Did you know?

China is a significant importer and accounts for about 10% of total global imports of for
than $17 trillion. This equates to a figure of about $1,200 annual product demand per
person.

More about china’s Import and Export:

1. China is the largest cotton spinner in the world and the textile industry is also the
biggest globally in terms of overall production and exports. Twenty four of the provinces
in China grow cotton and the industry is responsible for employing about 300 million
people in the country.
 56

2. The Asia Pacific region is the largest tea producer and China plays a pivotal role in global
tea production.

3. The annual production of rice accounts for almost half of the country’s total grain
output. China is responsible for about 30% of global rice production.

4. China is now emerging as one of the biggest importers of soybeans and has signed
contracts that maintain its commitment to import billions of dollars of soybeans from
the United States.

5. China is the largest importer of crude oil in the world and the annual average of $116
billion per year represents just over 17% of global crude oil imports.

6. China is also the biggest importer of iron ore by some margin. Imports total around $57
billion annually, which is over 67% of total global iron ore imports.

CHINA’S TOP TRADING PARTNERS:

The world’s largest exporter by value, China shipped US$2.294 trillion worth of products
around the globe in 2018 according to the latest statistics reported by the International
Trade Centre.

Top trading partners are:

1. United States: US$479.7 billion (19.2% of total Chinese exports)

2. Hong Kong: $303 billion (12.1%)
3. Japan: $147.2 billion (5.9%)
4. South Korea: $109 billion (4.4%)
5. Vietnam: $84 billion (3.4%)
6. Germany: $77.9 billion (3.1%)
7. India: $76.9 billion (3.1%)
8. Netherlands: $73.1 billion (2.9%)
9. United Kingdom: $57 billion (2.3%)
10. Singapore: $49.8 billion (2%)
 57

11. Taiwan: $48.7 billion (2%)

12. Russia: $48 billion (1.9%)
13. Australia: $47.5 billion (1.9%)
14. Malaysia: $45.8 billion (1.8%)
15. Mexico: $44.1 billion (1.8%)

Over two-thirds (67.8%) of Chinese exports in 2018 were delivered to the above 15 trade
partners.

CHINA’S PROHIBITED AND RESTRICTED IMPORTS:

1. Arms, ammunition, and explosives of all kinds

2. Counterfeit currencies and counterfeit negotiable securities

3. Printed matter, magnetic media, films, or photographs which are deemed to be

detrimental to the political, economic, cultural and moral interests of China

4. Lethal poisons; illicit drugs; disease-carrying animals and plants; foods, medicines,
and other articles coming from disease-stricken areas

5. Food items containing certain food colorings and additives deemed harmful to
human health by the National Health and Family Planning Commission (NHFPC)
 58

MAJOR INDUSTRIES IN CHINA:

The Chinese economy has witnessed tremendous transition and growth since 1978 when
Deng Xiaoping introduced China to capitalist market reforms and moved away from
a centrally planned economy. The resulting growth has persisted for the last 35 years;
its gross domestic product (GDP) has seen an average annual growth rate of 10.12%
between 1983 and 2013, making China's economy the second-largest in the world.

China’s GDP is broadly contributed by three broader sectors or industries:

1. Primary industry (agriculture)

2. Secondary industry (construction and manufacturing)

3. Tertiary industry (the service sector).

China's GDP Breakup

Primary Industry,
10%

Primary Industry
Tertiary Industry,
46% Secondary Secondary Industry
Industry, 44% Tertiary Industry

MASSIVE AGRICULTURAL SECTOR:

 59

China is the world’s largest agricultural economy with farming, forestry, animal husbandry and
fisheries accounting for approximately 10% of its GDP. It accounts for approximately 34% of the
total employed population.

The economic reforms of 1978 changed the face of agriculture in China. Prior to these reforms,
four out of five Chinese worked in agriculture. But this changed as property rights in the
countryside took hold and led to the growth of small nonagricultural businesses in rural areas.
De-collectivization, coupled with better prices for agricultural products, led to
more productivity and more efficient use of labor. The other major change took place in 2004
when the farm sector started to receive increased support under a major shift in economic
policy wherein the government came up with policies to support the agriculture sector rather
than overtax it, which was the previous policy.

CONSTRUCTION AND INDUSTRY:

Construction and industry (including mining, manufacturing, electricity, water and gas)
accounted for 44% of China's GDP in 2013. Industry is the bigger contributor (84% of the
secondary industry), while construction accounts for just 7% of overall GDP. Approximately 30%
of China's employed population works in these secondary industries. China is a world leader in
industrial output, including mining and ore processing, processed metals, petroleum, cement,
coal, chemicals and fertilizer. It's also a leader in machinery manufacturing, armaments, textiles
and apparel. Add to that, China is a top manufacturer of consumer products, a leader in food
processing, and a major maker of telecommunications equipment. It's a growing manufacturer
of automobiles, train equipment, ships, aircraft and even space vehicles, including satellites.

SERVICE SECTOR:
China's service sector has doubled in size over the last two decades to account for about 46% of
GDP. In 2013, it surpassed China's the secondary industries for the first time. Within the service
sector are transport, storage and post (5% of GDP), wholesale and retail trades (10%), hotel and
 60

catering services (2%), financial services (6%), real estate (6%) and mishmash of services
categorized as 'other' (18%).

FUTURE PROSPECTS OF CHINA

All over the world, countries that are undergoing industrialization have the tendency to move
from low-cost into high-quality manufacturing. It happened in both 19th century Europe and
early 20th century America .What kicks off a country’s economic growth are usually small-scale
industries and low-tech factories. As efficiency goes up, so will labor and production costs.
Nowadays, China is going through the same transition of low-tech to high-tech manufacturing.
The time of lower quality products and cheap production is coming to an end for China.

The game plan: “Made in China by 2025”

In 2015, the Chinese government announced “Made in China 2025. It’s a bold plan to
revolutionize China’s image.

The country’s new policies are aimed at enhancing innovation and production efficiency. The
image below shows which ten key sectors are targeted to drive the economy.
 61

China would like to be competitive with developed manufacturing economies in 2035. And
Chinese leaders want to give the country a nice 100thbirthday present by becoming the world’s
top manufacturer in the year 2049.The ultimate target is to change China from a mass-producer
to a quality-master.

The Chinese government is making short work of improving the private sector by spending
more on high-quality research. This helps to transition out a cheap and low-tech export-
oriented economy. They are also curbing the country’s research and development projects
managed by foreign nations. By doing this, China is looking to grow into an innovative, efficient
and highly skilled economic powerhouse. The ultimate goal is concentrating on experimental
development by supporting experimental research. In order to succeed in this endeavor, China
already spent billions on research and development (R&D). The graph below shows that it’s the
world’s second highest spender on R&D.

EASE OF DOING BUSINESS:

Did you know?

China is ranked 46 among 190 economies in the ease of doing business, according to the latest
World Bank annual ratings.
 62

WORLD BANK STUDY

China has made rapid progress in improving its business climate for domestic small and medium
enterprises in the past year. This progress, which now puts China among the top 50 economies
in the world, signals the value the government places on nurturing entrepreneurship and
private enterprise,” said Bert Hofman, World Bank Country Director for China.

Highlights of reforms from past year are:

1. Starting a Business was made easier through the introduction of online registration
systems and simplifying social security registrations.

2. Dealing with Construction Permits was made easier by streamlining the process of
obtaining building permits and certificates of completion, as well as registering new
buildings with the real estate registry.
3. Getting Electricity was made easier by expanding network capacity and making the
connection process free of charge.
4. The time and cost of Trading Across Borders was reduced by implementing a single
window, eliminating administrative charges, increasing transparency and encouraging
competition.

5. Paying Taxes was made easier by abolishing the business tax, allowing for joint filing and
payment of all stamp duties and by implementing several administrative reforms to
lower the compliance time.
 63

REGISTRATION FORMALITIES

Registering a business in China can be a long process. In 2015, China was ranked 128th out
of 189 countries (1 being the best) for starting a business It takes an average of 11
procedures and 31 days to establish a corporate entity in China.

The process for registering a business in China depends on the type of business – joint
venture, wholly foreign-owned enterprise or representative office.

The primary Chinese Government authorities involved are:

 Ministry of Commerce

 State Administration of Industry and Commerce (SAIC)

 State Administration of Foreign Exchange (SAFE)

 State Administration of Taxation

 General Administration of Customs

 State Bureau of Quality and Technical Supervision

 National Bureau of Statistics

The four primary options Australian business can choose from to set up a foreign investment
enterprise (FIE) are: representative offices (RO), wholly foreign owned enterprises (WFOE), joint
ventures (JVs) – of which there are two types – one being foreign invested partnerships (FIP).

Representative Offices (RO)

The easiest and simplest type of business structure to register in China is a representative
office (RO). It is therefore popular with Australian businesses that simply want to get a feel for
the Chinese market and environment and make business connections. There are no registered
capital requirements for a representative office, but it does have a limited business scope.
Other requirements include:
 64

 The parent company must have been established for a minimum of two years.

 It cannot directly hire local employees. Rather, it must engage an official Chinese
employment agency.

 The registration certificate is issued for a one year term, subject to annual renewal.

 It cannot restructure into a more comprehensive form of foreign direct investment

enterprise.

To establish an RO, the parent company must first apply for a business licence by submitting
an application with the SAIC, followed by registration with other relevant authorities. In
certain industry sectors, an approval from relevant authorities is required prior to
submitting the SAIC application. The SAIC registration process generally takes between
three and four months and is quite time-consuming when submitting directly to authorities.
Australian businesses may prefer to engage a consulting company that has more in-depth
procedural knowledge to submit the application.

Wholly foreign-owned enterprise (WFOE)

A wholly foreign-owned enterprise (WFOE) is a limited liability company that is entirely

funded by one or more foreign entities. WFOE is the most popular business structure chosen
by foreign investors as it permits the most freedom in business management. A large
amount of capital is required to establish a WFOE but the benefit is that it creates an
independent legal entity that can engage in profit-making business, and manage the
business in its own way while also allowed to create subsidiaries.
 65

Joint venture (JV)

A joint venture (JV) is created through a partnership between foreign and Chinese investors,
who together share the profits, losses and management of the venture.
For foreign investors, there are two major reasons for choosing to establish a JV; these include
government requirements for specific industries and the local partner being in a beneficial
position to assist with market knowledge or established networks.

Foreign-investment partnerships (FIPs)

There are two other foreign investment options that you may consider for setting up a business
in China. Foreign-invested joint stock companies (otherwise known as foreign-invested
companies limited by shares) are not very common in China and tend to be for larger
organizations. The other is the recently introduced foreign-invested partnership (otherwise
 66

referred to as a general partnership or limited partnership). FIPs have different benefits not
offered by WFOE, including a set-up process without registered capital verification, tax savings,
the options of domestic and foreign ownership (both corporate and individual) and hiring of
foreigners. The challenge with FIPs is the unlimited liability of the general partner.

INVESTOR PROTECTION
The Incomplete Law Theory of Pistor and XU contends that regulators, as they are more
efficient, play a more dominate role than the judiciary in protecting investors in the securities
markets. This theory to some extent explains why the China’s judiciary has been inactive in
protecting investors in China, the host of the third largest securities market in the world. By
deploying various political resources, the Chinese state plays a direct role in protecting the
interest of investors that is often more significant than that played by judicial or regulatory
authority action.

EASE OF PAYING TAXES

With the changes made since the 1994 tax reform, China has preliminarily set up a streamlined tax
system geared to the socialist market economy.

China's tax revenue came to 11.05 trillion yuan (1.8 trillion U.S. dollars) in 2013, up 9.8 percent
over 2012. The 2017 World Bank "Doing Business" rankings estimated that China's total tax rate
for corporations was 68% as a percentage of profits through direct and indirect tax. As a
percentage of GDP, according to the State Administration of Taxation, overall tax revenues
were 30% in China.

The government agency in charge of tax policy is the Ministry of Finance. For tax collection, it is
the State Administration of Taxation.
 67

As part of a US$586 billion economic stimulus package in November 2008, the government
planned to reform the VAT, stating that the plan could cut corporation taxes by 120 billion
yuan.
 68

BIBLIOGRAPHY
 https://www.chinahighlights.com/travelguide/culture/china-history.htm
 https://www.investopedia.com/articles/investing/103114/chinas-gdp-examined-servicesector-
surge.asp
 https://commodity.com/china/
 http://www.chinawhisper.com/top-10-great-dynasties-of-china/
 https://www.topchinatravel.com/china-guide/china-overview/
 https://asialinkbusiness.com.au/china/getting-started-in-china/registering-a-business-in-
china?doNothing=1
 https://www.ceicdata.com/en/indicator/china/labour-productivity-growth
 https://www.topchinatravel.com/china-guide/the-longest-rivers-in-china.htm
 https://www.britannica.com/place/China/Economic-policies
 https://www.investopedia.com/articles/investing/091515/3-industries-driving-chinas-
economy.asp
 https://successstory.com/companies/country/china