How China Will Change Your Business

How China Will Change Your Business Ted C. Fishman Kaihao Zheng Ye Zhang

Current Situation of China’s Economy • The GDP in 2011 was 7.497 trillion USD, increase 9.2% in this year. • The grossimport in 2011 was 1.7435 trillion USD, the total export in 2011 was 1.898 trillion • The inflation in 2011 was 5%

Effect’s of China’s Economy growth • Positive • low cost make products have low price. • Huge import and export brings lots of benefits for both country. • Promoting global economic integration. • Enhance the global economic development

Effect’s of China’s Economy growth • Nagative • Pollution : The industrialization of China is producing more pollutants and using more raw material. • Unemployed: low labor price competitive edge make lots of people lots their work and lots of company bankruptcy.

China’s economy is much larger than the offical numbers show. • In 2003, China’s official GDP was $1.4 trillion but that measure is suspect. • Because of government measures only China’s legal economy, illegal business is enormous but uncountable. • China uses the massive power of its foreign currency reserves to keep the world price of the yuan marching in lockstep with the dollar.

The growth of China's economy has no equal in modern history. • The country is closing in on a 30-year run during which its economy has doubled nearly three times. • Since China set about reforming its economy a generation ago, its GDP has expanded at an annual rate of 9.5%.

China is winning the global competition for investment capital. • According to Japan's Research Institute of Economy, Trade and Industry, one-third of China's industrial production was put in place by the half-trillion dollars of foreign money that has flowed into the country since 1978. • More than half of China's trade is now controlled by foreign firms.

China can be a bully • China now makes 40% of all furniture sold in the U.S.. Because of the competition in price and quality the work force at America's wooden-furniture factories dropped by 35,000, or one of every three workers in the trade.

China's economy is an entrepreneurial economy. • For a world fretting over Chinese economic competition, the entities to fear are not government planners but enterprises that spring on the scene lean and mean, planned and financed by investors who want to make money quickly.

The most daunting thing about China is not its ability to make cheap consumer goods. • As the Chinese developing, China can not only processing low technology products, but also high-tech products like Manned spaceship can be built.

China is closing the research and development gap -- fast. • Last year, China spent $60 billion on research and development. The only countries that spent more were the U.S. and Japan, which spent $282 billion and $104 billion, respectively. But China still has a long way to go.

China now sets the global benchmark for prices • For now China has set the benchmark for prices of products just like the Wal-mart, price and quaily is the key that make consumers have a better value and life. “live better and save money” • High consumer demand make the low price as possible, hard to find competitors for short period.

China's growth is making raw materials more expensive. • As China's economy has been expansion, the world of raw materials is also facing a shortage in the states of affairs. Constantly competition make the price of raw materials had increase a lot. Acctually China is not the only country who needs raw materials.

There are hidden costs associated with doing business in China. • Companies that engage with China have to expect pressure to transfer their technology which causes them to create their own competition in the country. • More than 40% of the Chinese domestic handset market now belongs to local companies.

Piracy is a problem • Foreign companies have little defense against even outright theft of their technology in China. • Microsoft is a good example in China, China have over 1.4 billion population and less than three people every have a computer but legal copy of Microsoft software no less then 1/5.

China's heavy buying of U.S. debt has lowered the cost of money in the U.S. • In the first half of 2004, China had a foreign exchange reserve of $460 billion. • China’s heavy buying of U.S. debt on the other hand has remitted the negative effect of subprime crisis in U.S.

Americans and Chinese have become reliant on each other's most controversial habits. • Without the U.S. to buy Chinese goods, China cannot sustain its growth; without China to lend money to the U.S., Americans cannot spend. Without the twin engines of the U.S. and China stoking the fortunes of other nations, the rest of the world might also sputter • The Chinese need a low-priced currency to keep their export machine going and create jobs. But maintaining the yuan's low price also means that Chinese consumers are stuck with a currency that would otherwise buy more for them on the world market.

http://www.inc.com/magazine/20050301/china_pagen_7.html • http://iask.sina.com.cn/b/4768124.html • http://chinaslm.blog.hexun.com/23818643_d.html • http://boyichayuan.blog.hexun.com/28675628_d.html • http://www.afinance.cn/new/gjcj/201012/308079.html

How China Will Change Your Business