the Business Environment of China 论文

the Business Environment of China
Financial management(财务管理)
LiYingyu（李颖余）
20101256007
In recent years, China has become a focus of attention of all over globe. More and more countries are willing to do business with China companies and invest money to China market. So the business environment of China is causing widespread concern among foreign organizations.
To make effective decisions in China market organizations must constantly scan the business environment of China to identify change and prepare for it.The detailed business environment offers a comprehensive introduction to a leader of a company. It includes microenvironment and microenvironment.
Part I Microenvironment
It refers that those factors is beyond the immediate control of the company. Four factors (political and legal, technological, economic, social and cultural) are included.
1.Political and legal environment
China's government is a pyramid shaped structure, at the top of which sits the President, currently Hu Jintao. The role of the Presidency is essentially to provide vision - to set the general course for the country as a whole. Each of China's leaders since Mao has marked his role with a body of thought which all those below are supposed to turn to as general guidance in policymaking.
China is moving towards a fully established market economy. At central government level, the main tendency is a gradual withdrawal by the state from direct control of business and a greater willingness to free business activity from wider policy objectives. This is combined with an increasingly laissez faire approach to foreign involvement in the economy.
State-level bureaus and agencies play an important and evolving role in administering and enforcing China's growing body of commercial and industrial law, along with its regulations on imports and exports, financial matters and in sensitive areas like intellectual property and environmental protection.
Below state level, economic decision-making is carried out by the following groups.
Shi are unitary metropolitan authorities for China's four largest cities - Beijing, Shanghai, Tianjin and Chongqing. These have a very great level of autonomy in economic decision making, including exemptions from national level economic policies.
In order to encourage foreign investment and protect the legal interests of foreign investors, China has established a legal system that is being strengthened by numerous domestic legislations as well as bilateral and multilateral agreements.
With reform and opening to the outside world, China is increasingly taking part in many international trade pacts. To fulfill its obligations and commitment as a new member of WTO, China has enacted new laws and constantly revised existing ones to improve its legal environment for investment. At the same time, about 30 government departments have up-dated regulations contained in more than 2,300 documents. With its laws and policies on foreign investment being brought into conformity with requirements of the market economy and international rules, China is gradually creating a legal environment that is favourable to foreign commercial interests.
The legal framework governing foreign enterprises comprises three basic legislations. ' These laws as well as their provisions constitute the core of the legal system governing foreign investments in China. To supplement these laws, a series of regulations and measures concerning the establishment, management, reform, purchase, investment, reinvestment, termination, and liquidation of foreign enterprises had been introduced
2.technological
The Chinese government has an ambitious plan to make China a world leader in science and technology by 2050. Moreover, in just 15 years from now, China’s leaders wish to see the country transformed into an innovation-oriented society. According to the Chinese science and technology officials, Chinese companies are to become less reliant on foreign technology and Chinese scientists are to pursue “indigenous innovation.” However, researchers in China face numerou s hurdles, including bureaucratic control, corruption, and an education system based on rote learning.
3.economic
Since the beginning of its economical opening — when the first 5-year plans were devised in 1979 — China has being growing at an incredible speed, with its GNP numbers jumping from 44 billion dollars to 1.6 trillion dollars in just 20 years. China ranks since 2010 as the world's 2nd largest economy after the United States. It has been the world's fastest-growing major economy, with consistent growth rates of around 10% over the past 30 years. China is also the largest exporter and second largest importer of goods in the world. The country's per capita GDP was $7,544 (International Monetary Fund, 94th in the world) in 2010. The provinces in the coastal regions of China tend to be more industrialized, while regions in the hinterland are less developed. As China's economic importance has grown, so has attention to the structure and health of that economy.
In the modern era, China's influence in the world economy was minimal until the late 1980s. At that time, economic reforms initiated after 1978 began to generate significant and steady growth in investment, consumption and standards of living. China now participates extensively in the world market and mostly state owned but also some private sector companies play a major role in the economy. Since 1978 hundreds of millions have been lifted out of poverty - yet hundred of millions of rural population as well as millions of migrant workers remain unattended: According to China's official statistics, the poverty rate fell from 53% in 1981 to 2.5% in 2005. However, in 2009, as many as 150 million Chinese were living on less than $1.25 a day The infant mortality rate fell by 39.5% between 1990 and 2005, and maternal mortality by 41.1%.Access to telephones
during the period rose more than 94-fold, to 57.1% as did in many developing countries such as Peru or Nigeria.
4.Social and Cultural Environment
China has a long history with over 5000 years.Social issues in the People's Republic of China in the 21st century are varied and wide-ranging, and are a combined result of the Chinese economic reforms set in place in the late 1970s, China's political and cultural history, and an immense population.Chinese culture has profoundly influenced the way a firm does business in contemporary China. With China’s growing economic power and international status, multinational corporations have been increasing their presence in China. Moreover, rapid globalization and development of information technology have enabled increasing numbers of Chinese companies to go international. Understanding foreign business cultural environments is an essential element in ensuring their successful entry into a foreign market.
Part II Microenvironment
The micro-environment consists of stakeholder groups that a firm has regular dealings with. The way these relationships develop can affect the costs, quality and overall success of a business. Issues in the micro-environment include:
Suppliers: Firms must decide on issues such as who to use to supply them, on the responsibility it takes for these suppliers and on the terms and conditions it adopts. Some firms take quite an aggressive attitude towards their suppliers by trying to push down the prices and delay payments. Others view the relationship more as a partnership in which they are working together with suppliers and that by helping each other both can benefit. The importance of suppliers can be seen if things go wrong.
Distributors: often getting products to the end customers can be a major issue for firms. Imagine you sell shampoo - what you need to sell this is to get it on the shelves in the leading chemists and supermarkets but this means moving someone else's products off the shelves! So the challenge is to get stores to stock your products; this may be achieved by good negotiating skills and offering appropriate incentives. The distributors used will determine the final price of the product and how it is presented to the end customer.
Customers: customers are obviously the key to sales. Managers must monitor customer needs and try to anticipate how these will develop so that they can meet these requirements effectively now and in the future. To help understand their customers firms are increasingly trying to gather information on them through mechanisms such as loyalty cards. By gathering data on shopping patterns and matching this to data on the individual shoppers firms can build up detailed pictures of their buyers and then offer them appropriate deals. Many firms are also trying to develop relationships with customers to help ensure they come back time and time again.
Competition: the success and behavior of any business will depend on the degree of competition in its market. In some markets one firm is dominant. This is called a monopoly. If you are in a
monopoly position this may allow you to exploit the consumer with relatively high prices (assuming your position is protected in some way) and you may be able to offer an inferior service if customers have no other choices. In other markets a few firms dominate; this type of market structure is called an oligopoly.In more competitive markets where there are many firms providing similar products customers have more choice; this may put downward pressure on prices and means that excellent customer service is essential.
Reference: Chinese Market and Communication -3.1Political Environment
The Legal Environment for Foreign Investment in China
Innovation with Chinese Characteristics. High-tech Research in China
China: Technology, Innovation and the Environment
Essays about: "technological environment of china
Economy of the People's Republic of China
Social Environment in Central China
Social issues in the People's Republic of China
Gillespie: Foundations of Economics - Additional chapter on Business Strategy。