China PESTLE Overview China is the third largets country in the world, with an area of 9,596,960 sq Km with a population

of 1.33 billion , the average life expectancy is 73.47 years. GDP per capita, adjusted by purchasing power parity (PPP) is $6500. China s major exports are, machinery and equipment, plastics, optical and medical equipment, iron and steel. Imports are oil and mineral fuels, plastics, data processing equipment, optical and medical equipment and organic chemicals. (CIA) The chinese government, a one party communist state, has renewed its efforts to form new international relationships and continues to strengthen relationships within the Asia-Pacific co-operation (APEC). In January 2010 a free trade agreement between China and the Association of Southeast Asian Nations (ASEAN) was signed, meaning that up to 90% of products were subject to zero trading tarrifs. As a result the trade volume between China and ASEAN was $21.48 billio, up 80% year on year. China has maintained a strong economic growth with an average GDP of 10.3% during 2003-09. In 2009, china s economic output was up by more than 10% to $2.8 trillion. The credit crunch and the global econominc down turn caused China s growth rate to dip to 8.99% in 2008, the cinese government responded by injecting $586 billion into infrastructure, this cash injection helped China to remain in positive growth of 8.3% in 2009, during a period when the major western economies were all in recession. China conitinues to have a problem with its growing population, even though a one child per family was introduced, this policy has caused a gender inbalance. The growing number of students continue to give the communist party cause for concern as the pro-democracy protests were led by students. Political The communist party of China is the ruling party and has been in power since 1949, with over 70 million members the CPC is the largest poitival party in the world and is responsible for governing down to provincial level. The CPC has branches in areas of government, industry, military and schools. Originally the CPC was set up to mirror the ideology of Soviet Communism but the CPC now follows an ideological mix of both democracy and communism. The CPC constitution stipulates that all citizens over 18 years should accept the programme and constitution of the CPC and be willing to join one of the parties organizations, paying membership dues regularly. Since 1946, the economic, open door policy adopted by the CPC has helped to drive the economy of China. Hu Jintao and Wen Jiabao, continue to focus on continued economic development and social equality.

Economic The economic reforms implemented over the last few decades in China have helped to develop a global economy. China has evolved from a highly regulated market place to an open liberal marketplace. In the mid eighties the People s Bank of China (PBC) began to exercise central banking functions, and this movement continued to develop the the financial services and the wholly state owned commercial banks have been transformed into modern financial enerprises. The China Banking Regulatory Commission (CBRC) was established in 2003, working in co-ordination with the China Securities Regulatory Commission (CSRC) and the China Insurance Regulatory Commission (CIRC). China recorded the highest economic growth rate in the world during the period 1990-2005, with an average yearly growth rate of 10%. Ch ina s entry into the WTO generated an influx of foreign investment, $108 billion in 2008, this helped to increase employment opportunities and continued to drive the economic growth during the credit crunch. The Chinese economy is largely dependent on its industrial sector, which accounted for 49% of GDP in 2009 , services was 41% with agriculture accounting for 10%. At present China has yet to formulate investment-friendly policies for the industrial and services sector. Taxation is also proving to be a problem, as tax incentives for certain sectors has led to an inbalance in the revenue structures. The CPC has a target of 8% growth for 2010, by conitueing to invest in developmental activities, China is into its 12 th FiveYear Economic plan, 2011-2015. Social China is the most populous country in the world, the continues growth during the 1990 s led to the introduction of the one child per family policy. As a result of this policy China has successfully achieved its goal of a more stable population. This policy has led to a gender inbalance with there being 20% more boys than girls and in 2004, the government banned selective abortions of female fetuses. In China schooling is monitored by the Ministry of Education, a central government agency under the State Council, a nine-year compulsory is followed. Higher education has played a vital role in the economic growth of China , by the end of 2004 there were 2,250 institutes of higher learning with over 20 million registered students. Many courses are vocational or tailored to suit industrial needs. As the need continues new course have been developed in areas like, radiochemistry, polymer physics and biophysics. In 2007, the CPC eliminated all educational charges for rural students receiving their nine years compulsory education. Flexibility within the education curriculum has led meant that students are more involved in planning their curriculum. China s spend on education rose to 3.48% of GDP in 2008 from 3.32% in 2007. The healthcare services in China are dominated by government run hospitals, which have been widely criticized for high having levels of corruption. In January 2009, a medical reform plan was promised by the State Council, which promised to spend $124 billion by 2011 to provide universal medical care to all the citizens. Need some info on quality of life?????????????

Technological China has moved its policy focus form joint ventures and transfer of technology to independent innovation. By 2020, China will invest around 2.5% of GDP in Research and Development. Since its entry into the WTO and the signing of the Agreement on Tax-Related Aspects on Intelectual Property rights (TRIPS) the number of patents received has continued to increase year on year. The Development Research Center of the State Council (DRC) is the main research and consulting institute and is under the direct control of central government. The contribution of technology to economic growth continues and China is developing as a main hub for R&D, IT and ICT services. Other areas of focus for continued development is energy, health and life sciences and agriculture. China s goal is to reduce their dependence on imported technologies, China now has one of the world s largest telecommunications industries in the world. China s e-commerce industry grew by 43% in 2008 and recahed a figure worth 454.5 billion. China s IT ind ustry is one of the largest contributors to the Chinese economy, in 2008 approximately $14 billion worth of software and services was exported. LEGAL The legal structure in China consists of two main bodies, one department dealing with state trials and one dealing with prosecution. Due to the vastness of the company and the amount of trade in the country there are still large loopholes within the system. The laws on taxation and labor for foreign investors are complex and need to be reformed as do the laws governing clearance and custom duty. The high levels of corruption by officials still causes concern when trying to do business in China, although the Doing Business Survey conducted by the World Bank suggests that the processes for doing business in Ch ina have vastly improved and China is described as a good destination for investment. In 2010, China was ranked 89th in as survey, indicating that it takes only 37 days to set up a business, compared to the regional average of 41 days which indicates an efficient and hassle free business environment. The CPC intend to free the market and streamline investment processes further to make the investment climate more attractive. Environmental The rapid and continued economic and industrial growth in China has created ever-increasing Environmental issues like, air pollution, land degradation, soil erosion, water pollution and a shortage of resources. These issues are compounded by the population growth and the demand for consumables and electricity. Tis increase in energy consumption will continue to cause air quality concerns and China is likely to surpass the US to become the largest emitter of greenhouse gases by 2010. The Chinese Government has recognized the growing environmental issues and has set ambitious targets goals to control the environmental deterioration in

some areas and reduce total emissions of major pollutants by 10%. Plans to lower energy consumption per unit of GDP by 20%, from the level in 2005 and maintain agricultural land, while increasing forest by 2% will go some way to address the environmental concerns that China faces while still trying to grow diversify its economy.

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