CHINA

By: Ashish Ganesh Nupur Pooja Shravan

THE TOP 10 SECRETS

Do your homework Beware of industrial Dynamics

Take your time

Chinese Society is Collectivist Out of bound behavior dont match

 Mistrust and Opportunism Trust building takes time Chinese society are hierarchical Decentralized government Be conscious of the large picture

THE KEY ASPECTS

DEALING WITH CONSTRUCTION PERMITS Globally china stands at 179 in the rankings of 183 economies on the ease of dealing with construction permits. It requires 33 procedures and takes 311 days. India Stands at 181 as it takes 34 procedures with 227 days but due to high cost it ranks below. Best - Hongkong

GETTING ELECTRICITY
Getting electricity in china requires 5 procedures, takes 145 days. Here china ranks at 115 out of 183 economies. India stands at 98 as it requires 7 procedures and takes 67 days only. BEST- Iceland

REGISTERING PROPERTY

China stands at 40 as it requires 4 procedures to be fulfilled which takes 29 days with a cost of 3.6% of total property value. India stands at 97 as it requires 5 procedures to be fulfilled which takes 44 days with a cost of 7.6% of total property value. BEST- New Zealand

GETTING CREDIT Here China stands at 67 as it requires a lot of procedures to be fulfilled. India stands at 40 as it has less procedures to be fulfilled.

BEST- UK

PAYING TAXES

Here China stands at 122 globally as it requires 7 payments to be made in a year which takes 398 hours. India stands at 147 as it requires 33 payments per year to be made which 254 hours. BEST- CANADA

RESOLVING INSOLVENCY
China stands at 75 when it comes to resolving insolvency as it takes 1.7 years to resolve it with a cost of 22 percent of the property. India stands at 128 as it takes 7 years to resolve on insolvency with a cost of 9 percent of total property. BEST- JAPAN

BUSINESS OPPORTUNITIES IN CHINA

There are whole a lot of investment opportunities for the FDI. Following are the different sectors in which investment can be made and profits can be earned. Real estate

Energy
Information technology Tourism Manufacturing and production

BEAUTIES OF CHINA THE GREAT WALL OF CHINA

KARST MOUNTAIN

TERRACOTTA WARRIORS

IMPORTANT CITIES
Shangai, with a population of 9.5 millions Hong Kong, with 7 millions inhabitants

Beijing, with 7.3 millions people

POLITICAL FACTORS

The first national government of the Chinese Republic was established on 1 January 1912, in Nanjing, with Sun Yat-sen as the provisional president. China got freedom in 1 October 1949 One party can control all government activity . China is an industrial and agricultural country. Government can declare certain area tax free and thus attracting new investors in the country.

MAJOR PARTY IN CHINA

Communist Party in China

Republic of China
Democratic Progressive Party People First Party

PRESIDENT OF CHINA

Hu Jintao

MEMBER OF ASSOCIATION
The United Nations (UN)

The Association of Southeast Asian Nations Regional Forum (ARF)

The Asia-Pacific Economic Cooperation Forum (APEC)

The Asian Development Bank (ADB)

World Trade Organization ( WTO) The Shanghai Cooperation Organization (SCO)

CHINA TRADE, IMPORTS AND EXPORTS

China Export

China exports totaled $1.194 trillion down from $1.429 trillion in 2010
Its main exports are electrical goods and other machinery, including data processing equipment, apparel, textiles, iron and steel, optical and medical equipment. China's main export partners are US (17.7%), Hong Kong (13.3%), Japan (8.1%), South Korea (5.2%) and Germany (4.1%)

China Import

In 2010, China imports totaled $921.5 billion, down from $1.131 trillion .
Its main imports are electrical components and other machinery, oil and mineral fuels, optical and medical equipment, metal ores, plastics and organic chemicals. China's main import partners are Japan (13.3%), South Korea (9.9%), US (7.2%) and Germany (4.9%).

Exchange Rate Of China 1 Chinese Yuan = 0.157339 U.S. dollars 1 U.S. dollar = 6.35570329 Chinese Yuan Foreign Direct Investment

In Vehicle Sector in 2011 117.7$ billion and 46.1% FDI come from Service sector.
Total FDI investment in China 2950.72$ billion compare to India is very high .

ECONOMIC FACTORS
(CIA World fact book)

 GDP (purchasing power parity): - $11.29 trillion (2011 est.) - Country comparison to the world : 3 GDP (official exchange rate):

- $6.989 trillion
GDP - real growth rate: - 9.2% (2011)

- Country comparison to the world: 7

GDP - per capita (PPP): - $8400 (2011 est.) - Country comparison to the world: 120 Unemployment rate: - 6.5% (2011 est.) - Country comparison to the world: 70

GDP - composition by sector:

- Agriculture: 10.1% - Industry: 46.8% - Services:43.1% (2011 est.)

Inflation rate (consumer prices): - 5.4% (2011 est.) - Country comparison to the world: 132

Central bank discount rate: - 2.25%(31 December est.) - Country comparison to the world: 100

Labor force: - 795.5 million - Country comparison to the world: 1

Exports: - $1.898 trillion (2011 est.) - Country comparison to the world: 1

Exports commodities:
- Electrical and other machinery, including data processing equipment, apparel, textiles, iron and steel, optical and medical equipment

Imports:

- $1.743 trillion (2011 est.)

- Country comparison to the world: 3 Imports - commodities: - Electrical and other machinery, oil and mineral fuels, optical and medical equipment, metal ores, plastics, organic chemicals Exchange rates: - Renminbi yuan (RMB) per US dollar - 6.4614 (2011 est.)

Reserves of foreign exchange and gold:

- $3.236 trillion (31 December 2011 est.) - Country comparison to the world: 1

SOCIO-CULTURAL FACTORS

BUSINESS ETIQUETTE
Present business card with both hands dont put it away hold it and when sitting down put business card on the table.

Dont use the term comrade in China.

Call them by their first name Personal questions are asked(this is done to seek common ground)

No touching like hugs or arm around the shoulder

Personal space in China is closer than the western norm People of same sex walk hand in hand (sign of friendship)

Clean plate means you are still hungry

Dont pour your own drink Drinking alcohol is very important

GETTING TO KNOW EACH OTHER

Dont like to do business with strangers. Like formal introduction. Standing up and keep standing through introduction Dont show excessive emotion when introduced Handshake and maybe bow from the shoulders Chinese avoid direct contact GIFTS Gifts are very important Chinese people decline gift three times before accepting be sensitive to genuine refusals Chinese do not open gifts when received Do not open the gift unless they insist

BUSINESS MEETING
Punctuality is considered virtue in business meeting (not late and not early) Chinese generally expect foreign delegation leaders to enter a room first, this prevents confusion Meetings are generally held in conference room rather than offices. Seating is not rigid but there are designated places for the principals It is wise to pause on entering the meeting room so that you can be seated in the correct place: Dont always assume that any seat is ok

 Be prepared to introduce your company with a presentation, even if you have met the key players before
Meetings generally begin with small talk and are structured dialogues between principals on both sides

Never put anyone on the spot during a meeting. Always offer a way out so your counterpart can preserve face
A good interpreter can help you; do pause and keep sentences short give your interpreter time to interpret short packets of information avoid long dialogues - avoid slang, metaphors, saying and similes etc. use simple English Always talk to the host, never directly to the translator Restate what was accomplished at the end of the meeting to avoid any misunderstanding. Ask for a contact person for future dealings

140 120

100
80 60 40 20 0 Power Distance Individualism Masculinity / Femininity Uncertainty avoidance Long term orientation China India

POWER DISTANCE
At 80 China sits in the higher rankings of PDI i.e. a society that believes that inequalities amongst people are acceptable. The subordinate-superior relationship tends to be polarized and there is no defense against power abuse by superiors.

Individuals are influenced by formal authority and sanctions and are in general optimistic about peoples capacity for leadership and initiative.
People should not have aspirations beyond their rank.

INDIVIDUALISM
At a score of 20 China is a highly collectivist culture where people act in the interests of the group and not necessarily of themselves. In-group considerations affect hiring and promotions with closer ingroups (such as family) are getting preferential treatment.

Employee commitment to the organization (but not necessarily to the people in the organization) is low. Whereas relationships with colleagues are cooperative for in-groups they are cold or even hostile to out-groups. Personal relationships prevail over task and company.

MASCULINITY / FEMININITY
At 66 China is a masculine society success oriented and driven.

The need to ensure success can be exemplified by the fact that many Chinese will sacrifice family and leisure priorities to work.
Service people (such as hairdressers) will provide services until very late at night. Leisure time is not so important. The migrated farmer workers will leave their families behind in faraway places in order to obtain better work and pay in the cities.

UNCERTAINTY AVOIDANCE
At 30 China has a low score on uncertainty avoidance.

Truth may be relative though in the immediate social circles there is concern for Truth with a capital T and rules (but not necessarily laws) abound. The Chinese are comfortable with ambiguity; the Chinese language is full of ambiguous meanings that can be difficult for Western people to follow.
Chinese are adaptable and entrepreneurial. At the time of writing the majority (70% -80%) of Chinese businesses tend to be small to medium sized and family owned.

LONG TERM ORIENTATION

With a score of 118 China is a highly long term oriented society in which persistence and perseverance are normal. Relationships are ordered by status and the order is observed. Nice people are thrifty and sparing with resources and investment tends to be in long term projects such as real estate. Traditions can be adapted to suit new conditions. Chinese people recognize that government is by men rather than as in the Low LTO countries by an external influence such as God or the law

TECHNOLOGICAL FACTORS

 New technologies create new products and new processes. MP3 players, computer games, online gambling and high definition TVs are all new markets created by technological advances. Online shopping, bar coding and computer aided design are all improvements to the way we do business as a result of better technology.

Technology can reduce costs, improve quality and lead to innovation

 Internet users- 500 million (2011)

Internet hosts- 15.251 million (2010) China telecom alone serves 55 million broadband subscribers

Tianhe -1 the worlds fastest supercomputer developed in 2010

In 2011, China unveiled a prototype train capable of reaching speeds of 310 mph (500 km/h) the first ultra high speed train developed solely by its domestic railway industry. China conducted a successful test of an anti-satellite missile China made its first attempt at the robotic exploration of Mars in Non 2011 In Sep 2011, the first Chinese space station module, Tiangong-1 was successfully launched, marking the first step in a decade- long project to construct a large manned space station

LEGAL

 Chinese law is one of the oldest legal tradition in the world It has been a complex mix of traditional Chinese approaches and western influences Legal system is based on the Confucian philosophy As the same time it emphasize on codified law Republic of china have adopted civil law tradition

ENVIRONMENTAL FACTORS

 Environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider.

The growing desire to protect the environment is having an impact on many industries such as the travel and transportation industries. Environmentally friendly products and processes is affecting demand patterns and creating business opportunities.

 The environmental policy is becoming one of the most critical issues for the Chinese government, which is investing $175 billion over the next five years for environmental improvements.
In fact the current ecological degradation, due to rapid industrial growth of the country, is posing a long term threat for China in terms of economic growth and more generally in terms of international relationships.

Due to the heavy dependence on coal and to the increasing energy demand, the air is heavily polluted, resulting in acid rain and water reserves contamination.
China is currently the world second largest producer of carbon monoxide.

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