GDP and Business Environment of China

GDP and Business Environment of China Overview China is the oldest continuous major world civilization, with records dating back about 3,500 years. Successive dynasties developed a system of bureaucratic control that gave the agrarian-based Chinese an advantage over neighboring nomadic and hill cultures. Chinese civilization was further strengthened by the development of a Confucian state ideology and a common written language that bridged the gaps among the countrys many local languages and dialects. Whenever China was conquered by nomadic tribes, as it was by the Mongols in the 13th century, the conquerors sooner or later adopted the ways of the higher Chinese civilization and staffed the bureaucracy with Chinese. The last dynasty was established in 1644, when the Manchus overthrew the native Ming dynasty and established the Qing (Ching) dynasty with Beijing as its capital. At great expense in blood and treasure, the Manchus over the next half century gained control of many border areas, including Xinjiang, Yunnan, Tibet, Mongolia, and Taiwan. The success of the early Qing period was based on the combination of Manchu martial prowess and traditional Chinese bureaucratic skills. During the 19th century, Qing control weakened, and prosperity diminished. China suffered massive social strife, economic stagnation, explosive population growth, and Western penetration and influence. The Taiping and Nian rebellions, along with a Russian-supported Muslim separatist movement in Xinjiang, drained Chinese resources and almost toppled the dynasty. Britains desire to continue its illegal opium trade with China collided with imperial edicts prohibiting the addictive drug, and the First Opium War erupted in 1 840. China lost the war; subsequently, Britain and other Western powers, including the United States, forcibly occupied concessions and gained special commercial privileges. Hong Kong was ceded to Britain in 1842 under the Treaty of Nanking, and in 1898, when the Opium Wars finally ended, Britain executed a 99-year lease of the New Territories, significantly expanding the size of the Hong Kong colony. As time went on, the Western powers, wielding superior military technology, gained more economic and political privileges. Reformist Chinese officials argued for the adoption of Western technology to strengthen the dynasty and counter Western advances, but the Qing court played down both the Western threat and the benefits of Western technology. In Beijing, on October 1, 1949, Mao Zedong proclaimed the founding of the Peoples Republic of China (P.R.C.). The new government assumed control of a people exhausted by two generations of war and social conflict, and an economy ravaged by high inflation and disrupted transportation links. A new political and economic order modeled on the Soviet example was quickly installed. In the early 1950s, China undertook a massive economic and social reconstruction program. The new leaders gained popular support by curbing inflation, restoring the economy, and rebuilding many war-damaged industrial plants. The CCPs authority reached into almost every aspect of Chinese life. Party control was assured by large, politically loyal security and military forces; a government apparatus responsive to party direction; and the placement of party members into leadership positions in labor, womens, and other mass organizations. Natural resources Coal, iron ore, petroleum, natural gas, mercury, tin, tungsten, antimony, manganese, molybdenum, vanadium, magnetite, aluminum, lead, zinc, uranium, hydropower potential (worlds largest). Agriculture: Products Among the worlds largest producers of rice, wheat, potatoes, corn, peanuts, tea, millet, barley; commercial crops include cotton, other fibers, apples, oilseeds, pork and fish; produces variety of livestock products. Industry: Types Mining and ore processing, iron, steel, aluminum, and other metals, coal; machine building; armaments; textiles and apparel; petroleum; cement; chemicals; fertilizers; consumer products, including footwear, toys, and electronics; food processing; transportation equipment, including automobiles, rail cars and locomotives, ships, and aircraft; telecommunications equipment, commercial space launch vehicles, satellites. Trade in 2008 Exports $1.5 trillion: electrical and other machinery, including data processing equipment, apparel, textiles, iron and steel, optical and medical equipment. Business Environment in China Activity indicators Show the working of the economy as a whole. Consumer indicators Show the increase in the demand of consumer product but the unemployment is still rising. Business indicators Show that the profit margin is decreasing but the inventories are increasing yoy. External indicators Show that the import is increasing faster than the export of the country. Inflation indicators Show that the consumer price inflation is become negative but core price are not affected due to this. Financial market indicators Shows that investor are investing but wait for future interest rate cut so that they can get more fund at cheaper rate of interest. Analysis and Interpretation We can analysis from the 1st and 4th chart that the GDP of China is growing from last 5-6 years but it show the decline in the 2008-09 that might be because of the global recession going on. All China has growing economy which set the benchmark for the other country. We can analysis in the 2nd and 3rd chart that the urban fixed investment is very fluctuating from last 5-6 years in one year it increase and in the other year it decrease. But that might be the internal condition and demand and supply effect change the overall investment in the country. Analysis and Interpretation We can analysis from the 1st chart that the retail sales is increasing year after year and that is good sign for the economy as well as for the business environment is concern because it will generate new employment and source of income for the people of China. We can analysis from the 2nd chart that per capital income and consumption is fluctuating from last 5-6 year that might be due the changing in the per capital income and the price index of the country. But another positive sign we find that most of the time consumption is less that the income which means the people are able to save some amount from their income which is good sign for any country. We can analysis from the 3rd and 4th chart that the unemployment is increasing year after year and on the other hand in the 4th chart the employment is fluctuating but most of the time it is increasing. So we can find that the unemployment is increasing because of increasing in population more that the increasing rate of employment. Analysis and Interpretation We can analysis from the 1st and 2nd chart that the industrial output is increasing year after year which is good sign for the growth of the economy because as output increasing which means the sales will increase, if sales will increase then more income will generate, then it will increase money flow in the market. So all these things will effected just because of increasing output of the industry. We can analysis from the 3rd chart that the inventories of the industry is increasing year after year that might be good as well as bad sign for the industry because it has their own benefit like constant supply and its own risk like blockage of funds in the inventory. We can analysis from the 4th chart that the industry has earning a good profit margin from last 5-6 years which is good sign for the growth of the business in China and an opportunity for other to do business in the China. Analysis and Interpretation We can analysis from the 1st and 4th chart that import and export is increasing year after year in amount but if we find the increase in percentage then we find that the increase and decrease is very fluctuating from last 5-6 year. We can analysis from the 2nd and 3rd chart that export is increasing more that the export in last 4-5 years which means it helps to increasing the balance of payment of the economy of China. Analysis and Interpretation We can analysis from the all of the above chart that the price of all the commodities whether they are capital goods or house hold good is increasing year after year and it is always say that in the growing economy the prices are always increasing with the growth of the economy. Analysis and Interpretation We can analysis from the 1st and 2nd chart that the government has given more rate of return to its investor year after year which means the government want to increase the investment in the country. We can analysis from the 3rd and 4th chart that interest rate are decreasing year after year which means the people can borrow money at cheaper interest rate and then can get more return by investing in different sources of income. JAPAN Overview Legend attributes the creation of Japan to the sun goddess, from whom the emperors were descended. The first of them was Jimmu, supposed to have ascended the throne in 660 B.C. a tradition that constituted official doctrine until 1945. Recorded Japanese history begins in approximately A.D. 400, when the Yamato clan, eventually based in Kyoto, managed to gain control of other family groups in central and western Japan. Contact with Korea introduced Buddhism to Japan at about this time. Through the 700s Japan was much influenced by China, and the Yamato clan set up an imperial court similar to that of China. In the ensuing centuries, the authority of the imperial court was undermined as powerful gentry families vied for control. At the same time, warrior clans were rising to prominence as a distinct class known as samurai. In 1192, the Minamoto clan set up a military government under their leader, Yoritomo. He was designated shogun (military dictator). For the following 700 years, shoguns from a succession of clans ruled in Japan, while the imperial court existed in relative obscurity. First contact with the West came in about 1542, when a Portuguese ship off course arrived in Japanese waters. Portuguese traders, Jesuit missionaries, and Spanish, Dutch, and English traders followed. Suspicious of Christianity and of Portuguese support of a local Japanese revolt, the shoguns of the Tokugawa period (1603-1867) prohibited all trade with foreign countries; only a Dutch trading post at Nagasaki was permitted. Western attempts to renew trading relations failed until 1853, when Commodore Matthew Perry sailed an American fleet into Tokyo Bay. Trade with the West was forced upon Japan under terms less than favorable to the Japanese. Strife caused by these actions brought down the feudal world of the shoguns. In 1868, the emperor Meiji came to the throne, and the shogun system was abolished. Geographic An archipelago in the Pacific, Japan is separated from the east coast of Asia by the Sea of Japan. It is approximately the size of Montana. Japans four main islands are Honshu, Hokkaido, Kyushu, and Shikoku. The Ryukyu chain to the southwest was U.S.-occupied from 1945 to 1972, when it reverted to Japanese control, and the Kurils to the northeast are Russian-occupied. Land area: 152,411 sq mi (394,744 sq km); Analysis and Interpretation We can analysis from the above charts that consumption and inventories are increasing from last 2 years and private fixed investment is decreasing from last 1.5 year which means this disinvestment is going on just because of global recession going on in the world. Analysis and Interpretation We can analysis from the above chart that from last 2 quarters the GDP and industrial production is increasing which means the Japan has come out of the recession going on in the world economy and this is good sign for the future of the people of Japan and business going on in Japan. Analysis and Interpretation We can analysis from the above charts that prices where increasing from last 4-5 years but from last one year it is below zero which means due to recession the demand of the good are decrease which decrease the price of the commodity. Analysis and Interpretation We can analysis from the above charts that the unemployment is decreasing from the last 4-5 years but it suddenly increase in the current year and in last year just because of recession and it is permitted that it will decrease again in future also. In the other chart we find that from last 4-5 years the wages are quite constant but it suddenly decrease again due to recession only and we can say that it will again come to its resistance level when the economy will stable. Analysis and Interpretation We can analysis from the above charts that apart from the year 2008-09 the interest rate, monetary policy and money growth is increasing from last 3-4 year which is good sign for any economy. But if we look after the year 2008-09 then that is again the time period of recession which cant show the real picture of the economy. Text of report by official Chinese news agency Xinhua (New China News Agency) Tokyo, 5 December: China and Japan signed the China-Japan Long- Term Trade Agreement in Tokyo on 5 December. This provided a framework for trade exchanges between the two countries between 2006 and 2010. Chen Jian, assistant to Chinas minister of commerce and chairman of Chinas China-Japan Long-Term Trade Agreement Committee, and Koga Kensuke, chairman of Japans Japan-China Long-Term Trade Agreement Committee, signed the agreement. The core content of this long-term trade agreement is that China and Japan will further strengthen cooperation in energy conservation technologies and equipment as well as environmental protection technologies and equipment, and has reached agreement on Chinas export of coal to Japan and Chinas import of energy conservation and environmental protection equipment and technologies from Japan. This was the sixth time a similar agreement was signed since the first China-Japan Long-Term Trade Agreement was signed in 1978. The China-Japan Long-Term Trade Agreement has played an important role in maintaining the stable and rapid development of trade exchanges between the two countries. During this period, total bilateral trade between China and Japan increased from 4.82bn US dollars to 168bn US dollars in 2004. Total trade volume is expected to see further increases this year. Impact of agreement upon both the countries Build good relation between both of the countries. Overcome the weakness of one country by the strength of another country. Increase the trade between the two countries. Open route for future contracts also in different areas. CONCLUSION China and Japan are very popular countries in world. Both have contributed for the development of world economy and helps established the international market in world. China is popular for the production electronic products at very cheap prices. China is one of the fastest growing economies in the world. Japan is popular for development of new technology innovation and Japan is the second largest energy importer after United States. Japan is one of the best destinations for starting new business or we can say that it is an international opportunity to work with the technology conscious country so that it will helps to make a competitive edge for our business. Overall we can say that both the countries have their positive aspect as well as negative aspects. So it is very difficult to select one country to be the best because if we think for the international market we cannot select only one country for our business opportunity. So, both the countries are having good business opportunities. BIBLIOGRAPHY http://www.infoplease.com/ipa/A0107666.html?pageno=4 http://en.wikipedia.org/wiki/Japan http://www.newyorkfed.org/research/global_economy/japanecon_charts.html http://www.mofa.go.jp/POLICY/economy/japan/indicator2.pdf http://www.redorbit.com/news/international/327614/china_japan_sign_20052010_longterm_trade_agreement/index.html www.fundsupermart.com.my/main/research/viewHT http://www.capitaleconomics.com/clientarea/articles/China%20Chartbook%20(Feb%2009).pdf