Introduction
China is located in East Asia and it has the largest population in the world. It is one of the largest countries in the world. The population of China is estimated to be 1.3 billion people. The Communist Party of China (CPC) is the sole party that governs China. China is therefore a single-party state. CPC exercises jurisdiction in 22 provinces across China. It is also responsible for monitoring the operations that take place in the five autonomous provinces and the four main metropolitans in China.
China has a vast and diverse landscape. It is characterized by forest steppes and deserts which are found in the northern and central Asia. China also has subtropical forests which are found in the wet regions of Southeast Asia. The terrain of Western China is rugged and raised. China is separated from Central and Southeast Asia by the Himalaya, Pamir, Tian Shan ranges. The Yellow and Yangtze rivers are some of the largest rivers in the world.
They originate from the Tibetan Plateau. These rivers flow from Tibetan Plateau up to the densely populated seaboard in Eastern China. China’s coastline along the Pacific Ocean is one of the most elongated coastlines in the world. It is estimated to be 14,500 kilometers (Guthrie, 2012).
China has experienced a series of historical manifestations. The Chinese civilization is one of the earliest form of civilization that has ever been encountered in the world. The first civilization in China occurred around the Yellow. The political system of China is also based on monarchies. The early Chinese used to refer to monarchies as dynasties. Dynasties in China came to an end when the Qing dynasty fell in 1922.
The Chinese Civil War took place between 1946 and 1949. During this time, the Chinese Communist Party fought with the Nationalist Kuomintang who had occupied mainland China in order to reclaim China. CCP defeated Nationalist Kuomintang in 1949. After CCP won the fight against Nationalist Kuomintang, it set in place the People’s Republic of China (PRC).
The establishment of PRC was carried out in Beijing. The Kuomintang was therefore forced to move the Republic of China (ROC) administration to Taiwan. Today, the jurisdiction of ROC is limited to Taiwan only. However, since 1949, both the PRC and ROC have been in dispute regarding the political state of Taiwan. They compete over the ownership of Taiwan (Guthrie, 2012).
Many academicians, economists and analysts stipulate that China is advancing at a dramatic rate. The market-based reforms that were set in place in 1978 by world’s superpowers are the ones that have spurred the dramatic growth of the Chinese economy. By the end of 2011, China was regarded as the second largest economy in the world.
China is ranked number two in terms of import volume and it is the principal exporter goods in the world. It has the largest army in the world. As a result, it is ranked as the second country in the world which allocates the largest budget to its defense force. China is also a well-known for its ability to manufacture nuclear weapons. China has also been able to launch space mission without encountering any difficulties. Today, many economists, analysts and academicians stipulate that China is a potential world superpower (Xiaotian, 2012).
Land Area and location
China is the second largest state in the world. It is located on the east of Asia and borders the Pacific Ocean to the West. It covers an area of approximately 9.6 square kilometers. China has a boundary that is approximately 22,800 kilometers long. Korea borders China to the east while Mongolia borders it to the north. It is bordered by Russia to the Northeast while Tajikistan, Kazakhstan and Kyrgyzstan border it to the northwest.
To the west, China is bordered by India, Pakistan, Nepal, Afghanistan, and Bhutan. To the south, it is bordered by Vietnam, Laos and Myanmar. China’s mainland shoreline is estimated to be 18,000 kilometers in length. China’s shoreline is unique in that it has a flat terrain.
In addition, the shoreline has plenty of docks and harbors which do not get covered by ice during the winter season. China’s mainland is bordered to the east by East China and Bohai. To the south China is bordered by Yellow and South China seas. These seas are estimated to have a maritime area of about 4.73 million square kilometers.
Natural resources
Natural resources are very important in terms of enabling countries to survive in this fast growing world economy. The main categories of natural resources found in China include water, minerals, and favorable climate. China’s big size has played a very vital role in enabling it to be in possession of different types land resources. The farmland of China is about 122,400 square kilometers. This is approximately 10 percent of China’s total land area.
The farmland in China is mostly scattered across the plains which are located in northeast China, north China and middle China. Agriculture plays a very important role in improving the standards of living of the people who are located in the plains. The main agricultural products that the people in the plain grow include wheat, corn and rice.
They also grow cash crops which they sell to industries to enable them improve their standards of living. Fresh water lakes occupy an area of approximately 67,500 square kilometers thereby facilitating the production of shrimps and fish products (Xiaotian, 2012).
The amount of rainfall that falls in China annually is estimated to be around 5.9 trillion cubic meters. Moreover, the overall water resources in China are estimated to be add up to 2.7 trillion cubic meters. This state of affairs has made China to be ranked the number six state in the world to be in possession of abundant water resources.
The rivers in China have the capacity to produce 676 million kilowatts of hydropower. China is so rich in minerals in that it has been found to have deposits of all kinds of minerals that are believed to exist in the world. The country has approximately 135 deposits. China has some of the biggest mineral deposits in the world. The biggest mineral deposits that are known to exist in China include the tungsten, antimony, vanadium, magnetite, pyrite, graphite, and barite deposits.
China also has vast land along the mainland coastline which is rich marine resources. The coastline also has pleasant beaches which attracts tourists from different parts of the world. Out of China’s 280,000 square kilometers of off-coast sea areas, it is said that approximately 260,000 square kilometers is fit for carrying out agricultural practices.
China also has the largest salt pans in the world which have the ability to produce approximately 17 million tons of salt annually. The amount of salt that is produced in China is said to account for approximately one third of the salt that is produced all over the world. China is therefore the principal manufacturer of salt in the world. Since China has more than 2,600 marine varieties, the fishing industry is also very large (China Today, 2012).
Population
China is regarded as the world’s most populated state. By mid-2011, the population of China was estimated to be approximately 1.3 billion people. The population of the world is approximately 6.7 billion people. Therefore, it is true that the population of China accounts for one fifth of the total population in the world.
Therefore, this means that one out of every five children in the world lives in China. However, in 1979, the population of China was observed to decline slightly. This is because the government of China implemented the one Child policy which required people to have only one Child. The goal of implementing this policy was to ensure that the swelling population of China was drastically reduced. It is estimated that the population of China was approximately 563 million people in 1950 (Guthrie, 2012).
Experts stipulate that the fertility rate of China is 1.7. This means that every woman in China has the ability to give birth to at least one child during her lifetime. However, it is argued that the total fertility rate for any stable population is supposed to be 2.1. This is an indication that China’s fertility rate is below the required minimum.
However, the fertility rate in China is expected to rise in the next decade since there is a high rate of immigration into China. In addition, the infant mortality rate has reduced significantly over the past few years.
Moreover, the death rate in the country has reduced owing to the improvement in national health services and the massive investment by the Chinese government to provide adequate health care institutions. In 2010, the population of China was approximately 1.4 billion people. Experts stipulate that the population of China will reach its peak in 2030. After reaching its peak, the population of China will start declining.
Age structure and life expectancy
China is regarded as one of the most populated countries in the world. Since 1950, the fertility rate of China’s population has been on a constant decline. As a result, sizeable bulges in the Chinese age structure keep being established. This is because of the social and economic developments that have taken place in China since 1950.
For example, in 1970s, the Chinese government sponsored birth control programs which played a very critical role in bringing down the fertility rate of the Chinese people. Studies show that transition in the age structure of the Chinese people presented a window of opportunity in 2010 when the share of the working population reached 70.7 percent. This led to a drop in China’s dependency ratio by 4.5 percent.
However, differences in dependency ratio existed between provinces, urban areas and rural areas. However, it is expected that the dependency ratio will start to pick up again in 2015 since the Chinese population will be aging by then. It is therefore important for China to take advantage of the working population in order to enable it to reach its 2020 target of quadrupling its per capita GDP (China Today, 2012).
Many analysts stipulate that the Chinese age and sex distribution is alarming. The efforts by the Chinese government to reduce birth rates in China have been observed to increase the number of males in the country while the number of females is declining slowly. The one child policy forced many parents to strive to have a male child as the only child. This is because many parents in China argue that a male child is more beneficial to the family than a girl Child.
The life expectancy in China has been observed to be on a constant rise since the People’s Republic of China was founded in 1949. Studies reveal that the life expectancy of the Chinese people was 73 years in 2005.
This reflected a 1.6 percent increase from the previous year. In 2008, infant death rate reduced to 1.53 percent compared to the previous year. This is because in 2007, the Chinese government increased health organizations by 315,000 and spent more than US $144.27 billion to enable it provide adequate health care services to its population (Sinomania, 2010).
Ethnic groups
China is a large multi-national state. It has 56 ethnic groups. The Han is the largest ethnic group in China. These people account for approximately 91.59 percent of the entire Chinese population. The other 55 ethnic groups account for the remaining 8.41 percent. The different ethnic groups in China are widespread in the entire Chinese territory. They live in individual societies. Since the Han people are the majority, they are found to be present in any part of China.
The Han group is also famous for being the largest ethnic group in China and in the world. The other 55 ethnic groups in China are distributed evenly throughout China. The regions whereby the other 55 ethnic groups in China are normally concentrated include Northwest China and Northeast China.
In order to ensure that peace prevails among the different ethnic groups in China, the Chinese government introduced policies whose goal was to foster equality among all the ethnic groups living in China. These policies were meant to ensure that the different ethnic groups in China respected others peoples’ beliefs, culture and faith (China Today, 2012).
Religion
There are four major religions that are observed in China. They include Catholicism, Islam, Taoism and Buddhism. All the residents of China are free to choose any religion that they wish to follow. Studies reveal that there are more than 100 million people who follow these different religions that are found China.
There are more than 85,000 sites where the religious people conduct their religious activities. The total number of religious organizations in China is three 3,000. In addition, the number of clergymen is approximately 300,000. Moreover, it has been observed that the different religious organizations in China usually set up learning institutions such as colleges in order to assist the less privileged members of the Chinese society to acquire quality education. The total number of religious schools in China is 74.
Buddhism is said to have been introduced in China more than 2,000 years ago. The Buddhists have established more than 13,000 temples to enable them to carry out their religious activities more effectively. In addition, there are more than 200,000 monks who live in the temples.
On the other hand, Taoism is said to have been in existence for approximately 1,700 years. Taoism is the second largest religion in China and has more than 1,500 temples. In addition, there are more than 25,000 Taoist priests and nuns who reside in the temples. Islam and Catholicism were introduced in China in the 7th century. There are approximately 18 million people in China who believe in the Islam faith and there are more than 4 million Catholics (Guthrie, 2012).
Language
The formal language that is spoken in China is referred to as Putonghua. However, not all people in China are able to speak the language. Studies reveal that only 53 percent of the people who live in China speak Putonghua. It is said that there are more than 200 languages that are spoken in China. These different languages cause problems to the foreigners who visit China and other Chinese who live in different parts of the country.
The different languages in China are said to be written in a similar manner. However, the different languages spoken in China pronounce the different characters differently. As a result, many Chinese often communicate by passing notes to each other in order to ensure that they communicate effectively with their colleagues. People in China are therefore encouraged to learn Putonghua in order to make it easy for them to communicate effectively with each other (China Today, 2012).
Chinese society and culture
China is regarded as the world’s largest society. It is characterized by a set of values and institutions. The Chinese practice different languages and they relate differently to their environment. Their cultural practices are also different. For example, it is very difficult for people living in the south to understand a speech that is made by a person who comes from the north and vice versa. Research indicates that the Chinese society has experienced significant changes in the 20th century (Sinomania, 2010).
Are Chinese collectivists or individualistic?
Chinese people are regarded as collectivists. This is because they mostly pay special attention to family and work group goals. They lay less emphasis on individual desires or needs. There are various traits that the Chinese portray which demonstrate that they are collectivists. Chinese encourage each other to be active players in their society and to put the needs of their nation ahead their personal desires.
The rules that are set up by the different societies in China are usually aimed at promoting obedience and order. People in China also believe in the spirit of cooperation and they give their colleagues support whenever they get stuck while undertaking any activity. In addition, the citizens of China usually identify themselves as a community.
Power distance
Power distance is a concept which illustrates the manner in which different kinds of inequalities in a society are handled. It targets intellectual, power and wealth inequalities. In China, inequality in wealth and power is very high. As a result, people in China play different roles depending on the positions that they occupy in the society (Mathilde, 2008).
Uncertainty avoidance
Uncertainty avoidance refers to a situation whereby different cultures devise certain rules that can enable them to handle certain ambiguous situations that challenge them. However, the Chinese are said to have a lower need for uncertainty avoidance. This is because they avoid many formalities and rules while conducting their daily activities.
Masculinity/ Femininity
The Chinese society is regarded as Chauvinist. The roles that men and women play in the society are very different. Men are the ones who take up most leadership positions. On the other hand, the roles that women play in the Chinese society are limited. In addition, studies reveal that the status of women is inferior in the rural areas (Mathilde, 2008).
Economic environment and government type
The Chinese economy is very big. It is also expanding at a high rate. Experts argue that the rate at which the Chinese economy has grown is miraculous. China’s GDP has been growing at a steady 8 percent per annum in the past 30 years. Today, the Chinese economy is growing at a rate that is 10 times higher than it was growing in the 1970s.
Studies show that China’s GDP averaged US $ 3.42 trillion in the last quarter of 2007. Analysts predict that China will be the largest economy by the end of the 21st century. However, though the Chinese economy is one of the best performing economies in the world, income inequalities still prevail among the Chinese people. The per capita income in China is approximately US $2,000 (The Economic Times, 2010).
The type of government in China is regarded as Communist. This is because it is the role of the government control and plan for the economy. The government strives to ensure that private ownership of property is eliminated and that people share all the resources in the economy equally. Moreover, China is also regarded as a single-party democracy. This is because there is only one political party that governs the country.
Macro and micro factor analysis
GDP
Gross Domestic Product (GDP) refers to the rate at which the value of goods and services produced in a country change within a given time period. 30 years ago, China was a centrally planned economy. However, China has gradually shifted from being a centrally planned economy into a market oriented economy.
This has made the private sector in China to experience significant growth. The growth of the export industry has played a critical role in enabling China to realize significant growth in the past 30 years. In the last quarter of 2011, the GDP of China was estimated to be 10,799.5 billion Yuan.
This value indicated an 8.1 percent increase from the first quarter of the year. Moreover, the value added by state owned enterprises increased by 7.2 percent. The enterprises that are funded by private investors from Hong Kong and Taiwan gained value by 6.4 percent compared to the previous year (Trading Economics, 2012).
Inflation rate
Inflation refers to the persistent rise in prices of goods and services thereby making the purchasing power of the residents of a nation to drop significantly. China is said to have recorded a 3 percent inflation rate in May 2012. However, the inflation rate of China was 5.5 percent in 2011.
Studies show that China’s inflation rate has remained constant at 4.3 percent from 1994 to 2012. However, in October 1994, the inflation rate rose to 27 percent and in March 1999 it dropped to -2.2 percent.
The Consumer Price Index (CPI) is the widely used mechanism to measure inflation rate. Studies reveal that the Consumer Price Index in China went up by 3.0 percent in May 2012 compared to the previous year. This state of affairs made prices to rise by 3.0 percent in urban areas and 2.9 percent in the rural areas (Trading Economics, 2012).
Unemployment
Unemployment refers to the number of people who are able and willing to work at the prevailing wage rates but they are unable to secure jobs. It is said that in 2010, 25 percent of graduates were unable to secure jobs in China. Most organizations in China stipulate that one of the major challenges that they face is the ability to find and retain talent. The level of joblessness in China was estimated to be 6.1 percent in 2009.
The level of unemployment in 2009 was a drop from the 6.3 percent which was observed in 2008. In the beginning of 2012, China reported a 4.1 percent unemployment rate. However, studies reveal that the unemployment rate in China has been constant at 4.15 percent from 2002 to 2012 (Economy Watch, 2010).
China’s Exports and Imports compared to other countries in the world
China is employing a lot of effort to enable it become competitive in the global market. After entering World Trade Organization in 2002, China has made a significant contribution to the world market. Studies show that China’s exports in 2010 reflected an average of US $1.194 trillion. China’s main products that China exports to the world market include electrical goods, machinery, apparel, iron, and steel. The major countries where China exports its products include United States, South Korea, Hong Kong, and Japan.
On the other hand, China’s imports in 2010 were estimated to be $ 921.5 billion (Economy Watch, 2010). The main products that China imports include machinery, oil, mineral fuels, organic chemicals, and electrical components. The major countries where China imports its goods from include Japan, South Korea, and Germany.
What investors should know before opening up businesses in China?
Restrictions
There are certain restrictions that are imposed on companies that conduct their operations in China. For example, China imposes high tariffs on foreign organizations. This makes the foreign companies to perform poorly despite the high rate of growth that is being observed in China. China lowers quotas and tariffs for those companies that it has close business relationships with.
Moreover, China imposes restrictions which limit foreign organizations from interacting with certain crucial industries in China such as health care, energy, and financial organizations. In the case of those companies that are involved in mining, transportation and power generation services, the government of China selects the best performing local companies to perform the operations. This action by the Chinese government prevents the foreign companies from competing effectively with the local companies.
Legal framework
Studies reveal that China has implemented a complete legal framework in its main aspects of social, economic and political life. It is therefore important for investors in China to ensure that they abide to all the rules that are set in place in China. This would ensure that their business perform optimally without any interference from the state. All foreign organizations should also ensure that they abide with the rules and restrictions set forth in order to enable them to boost their competitiveness in the country.
The legal system in China is based on Civil law. However, the legal system is normally under heavy influence of the traditional Chinese law. It also incorporates certain aspects of the German and Japanese law. It is the responsibility of judges to interpret the law depending on cases that are presented before them. Courts are not allowed to make any decisions that conflict with the policies that are set in place by the Communist Party.
The process of publishing court cases in China is normally under heavy influence of politicians. However, some cases are published in order to provide foreign investors with sufficient information regarding the “rule of law” in China.
The published cases also help the government in setting up policies that regulate the activities of foreign investors in China. Foreign investors in China are therefore required to ensure that they understand the Chinese legal system fully in order to enable them to conduct their business activities smoothly.
Chinese Business etiquette and Protocol
Communication
It is said that Chinese do not like to carry out business activities with organizations that they do not have enough information about. Foreign organizations are therefore encouraged to talk an intermediary in order to facilitate their communication with companies in China.
Companies that desire to carry out business activities in China are required to submit material that is written in Chinese language. The written materials should describe the company, its history and the products that it offers. Chinese do not entertain gender bias while carrying out business activities. Moreover, investors are required to understand that Chinese prefer face-to-face communication as opposed to telephone or written communication (Williams, 2012).
Business negotiations
While conducting business operations in China, only the senior members who represent a foreign organization are allowed to speak. The business negotiations are carried out at a slow pace in order to ensure that all parties reach an agreement collectively. If the Chinese are not interested in transacting business activities with a certain organization, they usually say that they will think about the negotiations.
In addition, the Chinese usually take a long time to make decisions because they believe that all decisions must be carefully reviewed and considered before they can be implemented. A person is also required to remain calm while negotiating with the Chinese (Williams, 2012).
China relations with UAE
China and United Arab Emirates established diplomatic ties in 1984 in order to foster trade between them. Since then, trade between the two countries has been on a constant growth. For example, the trade between the two countries exceeded $ 19.4 billion in 2007. This reflected a 41 percent increase from the previous year.
It has also been noted that there are approximately 2,000 Chinese organizations that operate in the UAE. Moreover, it has been noted that there are many Chinese who work in the construction sector in UAE (The Economic Times, 2010).
Studies reveal that UAE ranks as the second largest country trades with China in the Gulf region. As a result, UAE is regarded as China’s most valued trade partner in the Gulf region. UAE serves as an intermediary because it facilitates in the transfer of products from China to Africa and Middle East markets. The close relationship between China and UAE has therefore played a major role in enabling the two nations to become competitive in the global market.
The main products that China exports to the UAE include handicrafts, machinery equipment, clothes and apparels, textile products and products that are made from silver, gold, tin and copper (Guthrie, 2012). On the other hand, the main products that China imports from UAE include petroleum and natural gas. This is because China is the world’s largest consumer of energy. Therefore, since UAE is a major oil producing country, it is able to assist China meet its energy demands.
China is the principal exporter of goods and services to UAE. China’s exports to UAE account for almost a quarter of UAE’s total imports. For example, in 2009, China’s exports to UAE were approximately Dh 47.8 billion. In 2011, it is estimated that the bilateral trade between China and UAE reached 32 billion dollars.
This was a 38.6 percent rise from the previous year. The exports to UAE were 24.3 percent in 2011. This was a 24 percent increase compared to the exports that were made in 2010. On the other hand, the imports from UAE to China stood at 7.6 billion dollars. The exports by UAE to China rose by 88.9 percent compared to 2010’s exports.
It is said that there are approximately 200,000 Chinese citizens who live and work in the United Arab Emirates. The Chinese citizens residing in the UAE have made a significant contribution to the development of infrastructure, energy and trade in UAE. The free trade agreement between China and UAE is the one that contributed to the intense growth in the trade between the China and UAE (The Economic Times, 2010).
References
China Today. (2012). General Information of the People’s Republic of China. Web.
Economy Watch. (2010). China Trade, Imports and Exports. Web.
Guthrie, D. (2012). China and Globalization: The Social, Economic and Political Transformation of Chinese Society. New York: Routledge.
Sinomania. (2010). How China Trade Affects You and Your Business. Web.
The Economic Times. (2010). India, China dominate exports to UAE. Web.
Trading Economics. (2012). China GDP Growth Rate. Web.
Williams, D. (2012). China Business Etiquette, Culture and Manners. Web.
Xiaotian, W. (2012). China Plans New System to Facilitate Cross-border Yuan Use, Improve Trade. Web.