BUSINESS ENVIRONMENT IN CHINA: ECONOMIC AND POLITICAL FACTORS
1.1 Introduction
Over the last four decades, China managed to open its own economic system to the rest of the
world despite the current constitutional changes. Nowadays China has been recognized as the
economic superpower house and the second-largest economy in the world following the United
States. China still provides wide-scale development chances for foreign direct investment with
tremendous economic opportunities by offering access to a massive market and substantial labor
cost rises. After more than a couple of decades of change and the set up with the outside world,
China assessed the grounds of purchasing power parity (PPP) (World Bank. 2009).
This report designed to represent the overall trend of the Chinese economy, and the direction of
making major policy changes and international relations moving further towards a developed
country. A sign of the affluence that the reformed economy has brought to China can be seen in
the number of its millionaires, reported as 236,000 millionaires in 2004, an increase of 12 percent
over two years earlier (Meredith, 2007).
1.1.1 How strong is the Chinese economy
China has completely transformed not just itself, but also for the global financial system, which
had already transformed and established dozens of cities across China at the pace which other
countries have made. the shift which eventually turned China into an international economy, a
powerhouse and a second-largest in GDP. China's economy has grown faster than in any
developed nation. Which used to be poor and undeveloped, the Chinese giant has become one
of the world's leading export industries for companies and a major heavyweight in international
commerce. China has remained the biggest beneficiary of the international FDI destination in
recent years. FDI contributes 27% of value-added production 4.1% of domestic revenue and 58%
of international trade. In China, which contains 450 Worlds Fortune 500 firms, are allowed to
invest by 190 nations from all over the world. China’s second domestic economy continues to
thrive, and the growth rate eventually reached 6.3 percent in the first half of 2019 as china’s global
trade dramatically increases, especially with major trading partners other than the United States.
Chinese officials note two major trends that have an effect on China’s market economy and future
development: world multi-polarization and regional integration (Balfour, 2004).
, 1.1.2 The political system in china
Special economic zones had already played a major role to be a kind of experiment ground for all
the policies that the Chinese government would achieve all around the country and, as a result,
most of the country's policies have also been a kind of motivating factor for global economic
construction as a whole. It did give the rest of the nation a sense of confidence and trust in the
decision of the Chinese Government and a determination to move ahead with a constitutional
change and opening up. According to some previous analysis and studies, the important aspect
for the Chinese government is the legal, political and economic, as well the main motivation and
cultural barriers for multinational corporate companies to invest in countries, several sectors of
the economy or manufacturing industries that are also likely to attract Foreign Direct Investment
(FDI), the communist party of china has already transformed from a revolutionary party where
mission was to establish the government to a rolling party whose job was to run the economy and
social life so it was very important for people to see the difference between the revolutionary party
and the rolling party which all these differences were observed by Dang Xiao Ping and the
Chinese leadership and all the participants who chose to join the party and had been able to
determine themselves as part of the group's principles. As one of China's fundamental political
system, the multi-party cooperation system identifies the status and functions of the CPC and the
eight other political parties in the political life of the state, and the relations between the parties
(Background Note: China, 2009).
2.2 The story of Revolution
The fundamental issue is the mission of the Chinese communist party is to bring a better life for
the Chinese people and also to make the Chinese nation strong and prosperous in the world.
Innovation is now one of the divers of china’s 21’st country economy. It has become a global
leader in artificial intelligence, supercomputing, gene splicing, and electronic cars. During the
course of developing a civilization of socialism, the top priority in the political culture of china is to
term a new values system into the political civilization of socialism (Hucker, 1995).
On the other hand, the architect who laid the foundation stones for its economic miracle Deng
Xiao Ping. He became the country leader in December 1978 and subsequently left a lasting mark
on the communist country’s economy. Under him, private companies were allowed into China,
along with foreign investment. Dang also created special economic zones. In the four decades
since china has changed in dramatic ways. Millions of rural workers have streamed into the
country’s megacities, the gap between rich and poor has grown along with the overall prosperity.
1.1 Introduction
Over the last four decades, China managed to open its own economic system to the rest of the
world despite the current constitutional changes. Nowadays China has been recognized as the
economic superpower house and the second-largest economy in the world following the United
States. China still provides wide-scale development chances for foreign direct investment with
tremendous economic opportunities by offering access to a massive market and substantial labor
cost rises. After more than a couple of decades of change and the set up with the outside world,
China assessed the grounds of purchasing power parity (PPP) (World Bank. 2009).
This report designed to represent the overall trend of the Chinese economy, and the direction of
making major policy changes and international relations moving further towards a developed
country. A sign of the affluence that the reformed economy has brought to China can be seen in
the number of its millionaires, reported as 236,000 millionaires in 2004, an increase of 12 percent
over two years earlier (Meredith, 2007).
1.1.1 How strong is the Chinese economy
China has completely transformed not just itself, but also for the global financial system, which
had already transformed and established dozens of cities across China at the pace which other
countries have made. the shift which eventually turned China into an international economy, a
powerhouse and a second-largest in GDP. China's economy has grown faster than in any
developed nation. Which used to be poor and undeveloped, the Chinese giant has become one
of the world's leading export industries for companies and a major heavyweight in international
commerce. China has remained the biggest beneficiary of the international FDI destination in
recent years. FDI contributes 27% of value-added production 4.1% of domestic revenue and 58%
of international trade. In China, which contains 450 Worlds Fortune 500 firms, are allowed to
invest by 190 nations from all over the world. China’s second domestic economy continues to
thrive, and the growth rate eventually reached 6.3 percent in the first half of 2019 as china’s global
trade dramatically increases, especially with major trading partners other than the United States.
Chinese officials note two major trends that have an effect on China’s market economy and future
development: world multi-polarization and regional integration (Balfour, 2004).
, 1.1.2 The political system in china
Special economic zones had already played a major role to be a kind of experiment ground for all
the policies that the Chinese government would achieve all around the country and, as a result,
most of the country's policies have also been a kind of motivating factor for global economic
construction as a whole. It did give the rest of the nation a sense of confidence and trust in the
decision of the Chinese Government and a determination to move ahead with a constitutional
change and opening up. According to some previous analysis and studies, the important aspect
for the Chinese government is the legal, political and economic, as well the main motivation and
cultural barriers for multinational corporate companies to invest in countries, several sectors of
the economy or manufacturing industries that are also likely to attract Foreign Direct Investment
(FDI), the communist party of china has already transformed from a revolutionary party where
mission was to establish the government to a rolling party whose job was to run the economy and
social life so it was very important for people to see the difference between the revolutionary party
and the rolling party which all these differences were observed by Dang Xiao Ping and the
Chinese leadership and all the participants who chose to join the party and had been able to
determine themselves as part of the group's principles. As one of China's fundamental political
system, the multi-party cooperation system identifies the status and functions of the CPC and the
eight other political parties in the political life of the state, and the relations between the parties
(Background Note: China, 2009).
2.2 The story of Revolution
The fundamental issue is the mission of the Chinese communist party is to bring a better life for
the Chinese people and also to make the Chinese nation strong and prosperous in the world.
Innovation is now one of the divers of china’s 21’st country economy. It has become a global
leader in artificial intelligence, supercomputing, gene splicing, and electronic cars. During the
course of developing a civilization of socialism, the top priority in the political culture of china is to
term a new values system into the political civilization of socialism (Hucker, 1995).
On the other hand, the architect who laid the foundation stones for its economic miracle Deng
Xiao Ping. He became the country leader in December 1978 and subsequently left a lasting mark
on the communist country’s economy. Under him, private companies were allowed into China,
along with foreign investment. Dang also created special economic zones. In the four decades
since china has changed in dramatic ways. Millions of rural workers have streamed into the
country’s megacities, the gap between rich and poor has grown along with the overall prosperity.
