China Today Final

7/18/2019 China Today Final

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CHINA

GrouPranaSahil Swap(49)



Presentation Road Map

1. Introduction

2. nviron!ental anal"#i# (Political$ cono!ic$ %ultural)3. %hina a# a part o& !ultilateral or'aniation# (*$ +,-$ R

ASA*)4. /oin' u#ine## with %hina0+orld an report. %ountr" Attractivene##. I!plication# &or *5#

6. 7or!# o& u#ine##8. cono!ic Re&or!#0alancin' Act9. %hina #tart# relain' one %hild Polic"1:.%ontrover#ie# and learnin' &or *5#11.South %hina #ea territor" di#pute# in %hina



About China

• A #ociali#t #tate• ,he PR% i# a #in'le0part" #tate 'overned <" the %o!!uni#t

'overn# over 22 province#$ autono!ou# re'ion#$ 4 direct0c!unicipalitie# (ei=in'$ ,ian=in$ Shan'hai$ and %hon'>in')$ an'overnin' #pecial ad!ini#trative re'ion# (?on' Kon' and a

• @in' /"na#t" (14401912)$ Repu<lic o& %hina (191201949)$ PRepu<lic o& %hina(1949 onward#)

• #ed to <e a apane#e %olon"

• Introduction o& econo!ic re&or!# in 1968 under the leader#hBiaopan'

• PR% al#o clai!# ,aiwan C which i# controlled <" the Repu<lic %hina (R-%)$ a #eparate political entit" C a# it# 23rd province

• -ne o& the worldD# &a#te#t0'rowin' !a=or econo!ie#$• 2nd lar'e#t econo!" <" G/P and purcha#in' power parit" (PP

al#o the worldD# lar'e#t eporter and i!porter o& 'ood#.





Economic IndicatorsIndicator Value

G/P E 9.24: trillion

G/P 'rowth rate 6.4F

Population 1.36 <illion

G/P per capita E :

?/I Ran 91

Gini %oecient :.464

In<ound 7/I E 1.4 trillion

ne!plo"!ent rate 4F

InHation rate 1.F

Source: World Ban Econom



• ,he %hine#e 'overn!ent con#i#t# o& a #"#t

!ulti0part" cooperation and political con#uunder the leader#hip o& the %P%. -ther ei'participate in the di#cu##ion and !ana'e!#tate aair#.

• Political Ris J ,here are the ri## o& conepropriation$ currenc" inconverti<ilit" andrepudiation. %urrenc" devaluation and ra!inHation are po##i<le #cenario#.

• Rule o' man J ,he con#tant <attle <etwee

countr"5# central 'overn!ent and the prov

Political En(ironment )&otalitarian



• -ne o& the world5# &a#te#t 'rowin' econo!ie#• Pri!ar" recipient o& the world5# de#tination o& 7/

recent "ear#• %hine#e *ational /evelop!ent and Re&or! %o!

(*/R%) had e#ta<li#hed a plan to <etter !ana'e

inve#t!ent in the econo!"

Economic Ris • Ra!pant inHationar" pre##ure# and corruption i

#"#te!

• /evaluation o& currenc"

Economic En(ironment



Rapidl" 'rowin' population$ 1 child polic" introdu• %on&ucian thou'ht ha# do!inated the %hine#e w

&or 2$::: "ear#

• Collecti(ist culture *Hi+h) Conte,t Culturei!portance o& the &a!il"$ hierarchical #tructure li&e$ cultivation o& !oralit" and #el&0re#traint$ ane!pha#i# on hard wor and achieve!ent

Cultural En(ironment



Po.er distance Indi(idualism Masculinit/ uncertaint/ a(oidance 0on+

Ho'stede1s Cultural &/polo+

Source: China &oda/ Portal



China as a Part o' the 2N• A# a &oundin' !e!<er o& the nited *ation# in %hina i# one o& the ve per!anent !e!<er# o& Securit" %ouncil

• %hinaD# role i# 'rowin' in the * Peaceeepin' &i# the #econd lar'e#t provider o& peaceeeper# athe ve per!anent !e!<er# o& the *S%.

• Pla"# an active role in #u#taina<le develop!ent

chan'e$ renewa<le ener'" and other priorit" are• %hine#e pu<lic view# the * a# a vehicle <" whi+e#tern power# i!po#e +e#tern value# on the world. -ther# !i'ht &ear that <" <eco!in' too athe *$ %hina could <e dra''ed into !e##" &ore

conHict# lie the civil war in S"ria



China as a Part o' W&3• A&ter 1 "ear# o& diplo!atic #tru''le$ %hina <eca!Hed'ed !e!<er o& the +,- in 2::1 in /oha

• %a!e a&ter a lon' #et o& ne'otiation# with it# tradinpartner#$ nota<l" the nited State# and the urope

• %hina ha# #cored re!ara<le achieve!ent# in econ#ocial ter!# J2nd lar'e#t econo!" in G/P ter!#

1#t lar'e#t !erchandi#e eporter4th lar'e#t co!!ercial #ervice# eporter1#t de#tination &or Inward 7/I a!on' developin' co1#t inve#tor &or outward 7/I a!on' developin' cou7ir#t Lar'e#t tradin' partner o& Au#tralia$ %hile$ a

Korea$ ala"#ia$ Ru##ia$ rail$ South A&rica$ Saud



45I in China



China as a Part o' BRICS• ,he #cale o& 'rowth o& %hina5# econo!" and pace

develop!ent ha# out0di#tanced tho#e o& it# RI% p• %hina alone contri<uted !ore than hal& o& the RI

#hare.





China 6 Associate in ASEAN

• #ta<li#hed a &ree trade area a!on' the ten !e!<er the A##ociation o& Southea#t A#ian *ation# (ASA*) an

the PeopleD# Repu<lic o& %hina.• ,he initial &ra!ewor a'ree!ent #i'ned on 4 *ove!<

in %a!<odia• #ta<li#h!ent o& %hina0ASA* Inve#t!ent %ooperatio

which i# a e>uit" &und #pon#ored <" the BI an o&

tar'et inve#t!ent opportunitie# in in&ra#tructure$ enernatural re#ource# in the ASA* countrie#

• ASA* and %hina had a'reed to cooperate on eleven area# o& cooperation$ na!el" a'riculture$ in&or!ation co!!unication technolo'"$ hu!an re#ource develop!

eon' a#in /evelop!ent$ inve#t!ent$ ener'"$ tranculture u<lic health touri#! and environ!ent.







Countr/ attracti(eness)Wh/ should onein(est in ChinaPopulation o& 1.3 illion out o& total 6.1 illion

7ree trade Mone# C Shan'hai 7ree ,rade Mone 2:13

7a#te#t and Second lar'e#t 'rowin' econo!"

Stron' pre#ence in ro<u#t 'lo<al #uppl" chain#

+orld5# lar'e#t !anu&acturin' nation

ten#ive tran#portation networ #ince 198:

%hina5# late#t #trin'# o& re&or!#0,hird Plenu! in *ove!<er2:13



Challen+es .hile doin+ business .ith China)Implications 'or the MNE1s

%hallen'e#

aretA##e##!en

t

*eed &or/ue

/ili'ence

IntellectualPropert"ri'ht#

Re'ulator"Policie#

%han'in'/e!o'rap

hic#

-nerou#Red ,ape

Recent+a'e

InHation#

Stateedia

Guani

Sourc&imes&he &HSBCon 5o.ith C4orbe



China1s Achilles Heel)*$)!)#phenomenon-



4orms o' Business

In %hina$ the 4orei+n In(estment Industr/ 7uidance Catarevi#ed in Au'u#t 2:11 re'ulate# &orei'n inve#t!ent. It5# a do

i##ued <" %hina5# National 5e(elopment and re'orm Com*N5RC- and the ini#tr" o& %o!!erce (-7%-)$ which ove&orei'n inve#t!ent in %hine#e co!panie#. /ependin' on the <activit"$ the catalo'ue cla##ie# direct inve#t!ent a# encourare#tricted$ or prohi<ited.

4orms o' Business: *Common .a/s at present-•*on 7/I <a#ed approachJ%ontract anu&acturin'Licen#in'N7ranchi#in'•7/I <a#ed approache#J oint Oenture#

+holl" owned #u<#idiar"

i ' l i



1. Steppin' up nancial re&or!#• ,he#e include #ettin' up a depo#it in#urance #"#te! <" earl"

>ualied private inve#tor# the 'o ahead to #et up <an#$ loo#on the pricin' o& co!!oditie#$ electricit" and natural re#ourcreva!pin' the #"#te! &or Initial Pu<lic -erin'# (IP-#).

• %hinaD# central <an re!oved control# on lendin' rate# earlie

• %hina i# !ovin' toward# a !aret <ia# and puttin' !ore e!!aret.

• ,he i!plication i# that the non0#tate #ector will pla" a 'reate

2. State0-wned nterpri#e# (S-#)• S-# will <e re>uired to pa" lar'er dividend# to the 'overn!

o& earnin'# &ro! #tate capital to <e paid <ac to the #tate a#ocial #ecurit" <" 2:2:.

• Private r!#$ !eanwhile$ will <e encoura'ed to pla" a 'reate

Economic Re'orms ) Balancin+

3 i Ci i d P



3utsourcin+ Cities and Pars



• %hina5# population i# a''re'ated

in a#t0#outhern part• Geo'raphical Pattern# o&

%hine#e thnic inorit"Population

• ,he Indu#trial and econo!ic'rowth i# al#o a''re'ated in the

a#t0#outhern part o& thecountr"

• *ew re&or!# are encoura'in'countr"5# uni&or! develop!ent

China1s population a++re+ation 67eo+raphic (ie.

E i R ' B l i



+el&are0#"#te! re&or!ed

• S"#te! o& hou#ehold re'i#tration C Q,he ?uou #"#te! 0 !i'rant# 'ive

#ervice# when the" !ove to ur<an area#.• Anal"#t# #a" chan'in' thi# #"#te! i# a e" #tep toward# li<eraliin' the

allowin' the &ree !ove!ent o& la<our and encoura'in' ur<aniation.

Greater ri'ht# &or &ar!er#

• 7ar!er# will <e 'ranted ri'ht# to po##e##$ u#e$ <enet &ro! and tran#&

contracted land$ a# well a# the ri'ht to u#e their land owner#hip a# coll

'uarantee.

• At the !o!ent$ all land in %hina i# owned <" the 'overn!ent with &ar!

per!itted the ri'ht to wor the #oil in their area.

• Anal"#t# #a" thi# chan'e i# i!portant to encoura'in' ur<aniation and

econo!" to a con#u!er0driven one #ince it could ena<le &ar!er# to ca

value o& their land$ inve#t in new venture# and !ove to the citie#.

Economic Re'orms ) Balancin+

Chi t t l i hil



• %hinaD# one child polic" polic" wa# put in place in 1969 to cocountr"D# <oo!in' population C Initial pro#perit" 0 %ontri<ute<irth rate#

• ,he polic" i# ea#ed to allow couple# to have 2 children i& onei# an onl" child.

• Relaation in polic" to #upport %hina5# a'in' population.

China starts rela,in+ one chilpolic/

• +orldD# !o#t populou# countr" would&ace la<our #horta'e within net twodecade#.

• Mhe=ian' wa# the 1#t province tocarr" out relaation 0 a'reed <"countr"D# %o!!uni#t leader# in *ov.

2:13 and approved <" the national

Warnin+8

A+e structure

"6#$ /ears #9!; *!"#! est-

#<6=$ /ears 9>$; *!"#! est-

=< and o(er ?$; *!"#! est-

C t i d l i ' MN



• Apple- 7oconn Apple 7actorie# Oiolated %hine#e La<our Law# in Mhen'hou$ %

received critici#! &or the u#e o& child la<our and unethical <u#ine## pra

- ,he 7air La<or A##ociation (7LA) #a"# 7oconn i'nored the weel" worle'al %hine#e !ai!u! o& 49 hour#Nwee and e!plo"ed la<our &or :

- 7oconn ha# ad!itted to e!plo"in' undera'e intern# in &actorie# a# "oSourceJ %** one" 0 Apple &ace# new %hina la<our alle'ation#T

Contro(ersies and learnin+s 'or MN

•

Star<uc#- Star<uc# Pricin' %ontrover#" C Stor! in a %oeecup

- ,he international coee chain Star<uc# char'ed:F hi'her price# in %hina than in other !aret#

- ,all latte co#t# E4.43 in a Star<uc# in ei=in'$

E3.98 in London$ E3.2 in %hica'o$ and E2.4: inu!<ai.

7 l C t i



7oo+le Contro(ers/ inChina

Source07inan

• Goo'le.cn$ the %hina0<a#ed Goo'le #earch en'ine #ite wa# launched in anuarInc. a'reed to lter the #ite5# #earch re#ult# in co!pliance with the %hine#e 'ocen#or#hip law#. %ontrover#" i!!ediatel" &ollowed thi# announce!ent <ecau

<elieved the co!pan" wa# activel" #upportin' the Golden Shield Pro=ect.• Goo'le re#ponded to the ne'ative !edia re'ardin' their co!pliance with the

<" #tatin'$ Q+hile re!ovin' #earch re#ult# i# incon#i#tent with Goo'leD# !i##ioin&or!ation (or a heavil" de'raded u#er eperience that a!ount# to no in&or!incon#i#tent with our !i##ion.

• Additionall"$ Goo'le eecutive Rich %. S"e$ <luntl" #tated in 2::$ QGoo'le i<u#ine##e# tend to want to !ai!ie prot#.

• ,he &a#t 'rowin' nu!<er o& Internet u#er# in %hina !ae# it a ver" attractive

a 'rowin' <u#ine##.

• anuar" 2:1:$ Goo'le announced the" would no lon'er act in accordance withcen#or#hip law# and co!plained that the" had <eco!e a tar'et o& hacin' oparch 23$ 2:1:$ all Goo'le.cn #earche# were auto!aticall" re0routed to the Go#ite$ where in&or!ation i# &reel" di#tri<uted and i# not #u<=ect to %hina5# Inter

,he %hine#e 'overn!ent >uicl" reacted and <loced Goo'le co!pletel" in !<ut rever#ed thi# <an the &ollowin' da". ,he auto!atic re0direct to Goo'le ?o

une 3:$ 2:1: #o that Goo'le would not lo#e their licen#e to operate in %hina.

I di MNE1 i Chi



Indian MNE1s in China

.•an" Indian co!panie# have #et up operation# either in the &orventure# or wholl" owned #u<#idiarie# in %hina.•Ai# an$ nion an o& India$ I%I%I an$ Pun=a< *ational anrepre#entativeoce# in %hina while <an# lie %anara an$ an o& aroda$ So& India operate <ranch oce# there.•%o!panie# lie harat ?eav" lectrical# Li!ited (?L) and Adover#ea# operation# in %hina•Lar#en U ,ou<ro ha# !anu&acturin' &acilitie# n'ineer# India Li!

operate# throu'h a repre#entative oce.•Phar!aceutical co!panie# lie Lupin$ Pira!al ?ealthcare and SPhar!aceutical# and che!ical# co!panie# lie Reliance Indu#tr u<liant -r'ano#"# have al#o &ora"ed into %hina.

Ali<a<aMio!eeRenRen C %hine#e &ace<oo

China1s MNE

RE4ERENCES



+orld an*%,A/

ournal# &ro! ,ele'raph$ cono!i#t7or<e# International

%** one" 0 Apple &ace# new %hina la<our alle'atiowww.world<an.or'NenNcountr"NchinaNre#earch .ht!lwww.econo!i#t.co!N#pecialreport#Nchina2.ht!l

httpJNNecono!icti!e#.indiati!e#.co!Nnew#NinternatiN<u#ine##N!ain0ri#0&acin'0the0world0i#0a0chine#e0de0di#a#ter0warn#0'eor'e0#oro#Narticle#howN28:6:21.c

RE4ERENCES

A di

http://www.worldbank.org/en/country/china/research%20.html

http://www.economist.com/specialreports/china256.html

http://economictimes.indiatimes.com/news/international/business/main-risk-facing-the-world-is-a-chinese-debt-disaster-warns-george-soros/articleshow/28607021.cms






http://www.economist.com/specialreports/china256.html

http://www.worldbank.org/en/country/china/research%20.html



Appendi,

SourceJ 7or

Internationa



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