This document provides an overview of China's culture, politics, economy, legal system, and garment industry. It discusses key cultural aspects such as languages, religions, and family roles. It also examines political systems and risks, economic factors like demographics and trade, legal protections and business regulations. Specific details about China's garment market are given, including popular brands, retail channels, consumption trends, and the competitive landscape.

1. Welcome to the presentation
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2. INSTRUCTED BY
MAHMUDA ALI
FACULTY, CBA, IUBAT
Presented By
MD. SAIDUR RAHMAN SAID
16204006, MBA
Summer 2017, IUBAT
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China: An Analysis of Culture, Politics, Economy, Legal System, Government, and Market

3. CULTURAL FACTORS
 Major languages
 Standard Chinese or Mandarin
 Yue (Cantonese),
 Wu (Shanghainese),
 Minbei (Fuzhou),
 Minnan (Hokkien-Taiwanese),
 Xiang,
 Gan,
 Hakka dialects.
 Major religions
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4.  Ethnic makeup
 Han Chinese 91.6%,
 Zhuang 1.3%,
 Other (includes Hui, Manchu,
Uighur, Miao, Yi, Tujia,
Tibetan, Mongol, Dong,
Buyei, Yao, Bai, Korean,
Hani, Li, Kazakh, Dai and
other nationalities) 7.1%
 Role of family
 Males
In the traditional Chinese family, the man
is responsible for maintaining, providing
for and protecting his family. At the same
time, he is given all the decision-making
power when it comes to his wife, family
and other family members.
 Females’
Traditional Chinese mothers usually stay
in the home to take care of the home, the
children, and the rest of the family. Many
modern Chinese women have careers.
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92%
1% 7%
Ethnic group
Han Chinese
Zhuang
other

5. Unique business customs,
etiquette and practices
 Business Mentality
 Chinese business people will expect you to
be well prepared for the meeting.
 They prefer to establish a strong
relationship before closing a deal, so you
might have to meet up several times to
achieve your objectives.
 Regarding decision-making, the Chinese
tend to extend negotiations far beyond the
agreed deadline to gain some advantage.
 People in China usually enter the meeting
room in hierarchical order.
 Greetings
 Handshakes are common but wait for
your Chinese counterpart to initiate the
gesture.
 Regarding titles of courtesy, most
people should be addressed with a title
followed by their last name.
 Body Language
 Body posture should always be formal
and attentive as it demonstrates self-
control and respectfulness.
 Be careful about what you do with your
hands as well.
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6. Business meetings and meals
 Dress code: conservative suits. Bright
colors of any kind are considered
inadequate.
 Exchanging business cards is common
practice, so make sure to bring plenty!
 Gold is the color of prestige and
prosperity, so if you print your business
cards in gold ink, it will have that
connotation.
 Do not bring presents! The official policy
in Chinese business etiquette forbids
gifts. is illegal in the country.
 If you are invited to a business meal,
wait to be seated, as there is a seating
protocol based on hierarchy.
 It is also important to know how much
to eat..
Unique aspects of written, oral
and non-‐verbal communications
 Nonverbal Communication in
China
 facial expression,
 eye contact,
 gestures, and
 tone of voice.
 Verbal
 The most common by far is Mandarin
Chinese, which is the dialect of China,
and is the language taught in almost all
Chinese schools and used on TV and in
the media.
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7.  Describe the country’s culture
using Hofstede’s model of
cultural dimensions
 Major sports
 Women's national volleyball
 Ping Pong – (Table Tennis)
 Shooting
 Bicycling
 Football
 Chinese diving
 Chinese martial art
 Badminton
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8.  Recreation
 Music
 Opera
 Dance and Acrobatics
 Kites
 Board Games
 Card Games
 Literature
 Food
 Sweet and Sour Pork
 Gong Bao Chicken
 Ma Po Tofu
 Wontons
 Dumplings
 Chow Mein
 Peking Roasted Duck
 Spring Rolls
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9. POLITICAL AND LEGAL
FACTORS The Constitutional System
 The current constitution was adopted on
December 4, 1982 by the 5th National
People's Congress.
 The System of People's Congress
 The National People's Congress (NPC) holds
the highest authority in state power, while
local people's congresses are the local
authorities. Both are elected by the people.
 The Party in Power
 The Communist Party is the only party in
power. Founded in 1921, the Communist
Party of China (CPC) finally recognized the
People's Republic of China in 1949 through
years of armed struggle.
 The System of Multi-Party Cooperation
and Political Consultation
 The CPC has eight other political parties
accepting its leadership and participating in
the discussions and management of state
affairs, in cooperation with the CPC.
 The Local Administrative System
 It's the system and practice of establishing
administrative regional divisions and setting
up of local administrative organs to assist
the implementation of local administration.
 The System of the Head of State
 The President is the head of the state of
the People's Republic of China.
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10.  The Election System
 China has a comprehensive system for it
elections which include laws and regulations
pertaining to the peoples' right to vote and
stand for election, function of the powers
that supervise the election, procedures of
direct and indirect election, election
expenses and punishment of violations.
 The System of Self-Government of
Ethnic Autonomous Areas
 All the areas heavily populated with ethnic
minorities are managed by self-government
under national leadership, which is
determined by geographical size and
population.
 Stability of government
 The index of Political Stability and
Absence of Violence/Terrorism measures
perceptions of the likelihood that the
government will be destabilized or
overthrown by unconstitutional or violent
means, including politically-motivated
violence and terrorism.
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11.  Future political risks, if any
 China is particularly hazardous with
respect to political risk. Similarly, there
are the risks of confiscation,
expropriation, currency inconvertibility
and contract repudiation. Currency
devaluation and rampant inflation are
possible scenarios in many countries.
There is also risk to company employees
of personal harm or kidnapping, and risk
to the firm of extortion attempts.
 Bribery and corruption risk/index
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2016 2015 2014 2013 2012
Score 40 37 36 40 39
34
36
38
40
42
Briberyindex
Score
It positions 79 among 178 countries in
corruption index

12. ECONOMIC FACTORS
 Demographics
 Population 1,373,541,278 (July 2016 est.)
 0-14 years: 17.1% (male 126,732,020/female
108,172,771)
 15-24 years: 13.27% (male 97,126,460/female
85,135,228)
 25-54 years: 48.42% (male 339,183,101/female
325,836,319)
 55-64 years: 10.87% (male 75,376,730/female
73,859,424)
 65 years and over: 10.35% (male
67,914,015/female 74,205,210) (2016 est.)
 Population growth rate 0.43% (2016 est.)
 Urban population: 55.6% of total population
(2015)
 Per capita income levels, wealth
distribution: GNI, GDP (Per capita
conversion), Rate of Change, PPP
Per capita income levels, wealth
distribution
 GDP 11,795.3 billion US dollars
 GDP based on PPP 23,194.41 billion
international dollars
 Real GDP growth 6.6 %
 GDP per capita 8,481 US dollars
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13.  HDI indexes
HDI
rank
Country Human
Development
Index
(HDI)
Life
expectancy at
birth
Expected
years
of schooling
Mean years of
schooling
Gross
national
income (GNI)
per
capita
GNI per
capita
rank
minus
HDI
rank
Value (years) (years) (years) (2011 PPP $)
90 China 0.738 76.0 13.5 7.6 13,345 -7 91
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14.  Inflation rate
 Inflation as measured by the consumer price
index reflects the annual percentage change
in the cost to the average consumer goods
and services that may be fixed or changed at
specified intervals, such as yearly.
 Currency exchange rate
 1 US Dollar = 6.77 Chinese Yuan
 1 Chinese Yuan = 0.15 US Dollar
 Unemployment rate
 Unemployment rate in China is 4%
 Debt
 Government gross debt as a share of GDP
49.3 %
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15.  Business environment: Government
attitude to foreign investment and
trends, ease of doing business, trade
regulations
 Government policies both encourage
and restrict foreign direct investment
flows and operations.
 Due to the Chinese unique
characteristic and the nature of socialist
state, the government had to control
and govern foreign investment in a bid
to avoid occupying the dominant role in
the domestic economy.
 A principal concern about FDI is that
MNEs’ global orientation will make them
insensitive to national interests and
concerns.
 Major exports and trading
partners
 The top exports of China are:
 Computer ($188 B)
 Broadcasting Equipment ($165 B)
 Telephones ($ 112 B)
 Integrated Circuits ($65 B)
 Office Machine parts ($ 45.4 B)
 The top trading partners are:
 United States ($ 457 B)
 Hong Kong ($273 B)
 Japan ($152 B)
 Germany ($ 97 B)
 South Korea ($ 910.1 B)
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16.  Education and literacy levels
 Definition: age 15 and over can read
and write
 Total population: 96.4%
 Male: 98.2%
 Female: 94.5% (2015 est.)
 Availability of skilled labor, labor
costs
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17. LEGAL SYSTEM
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 Protection of intellectual property rights

18. Enforcement of contracts
 First, there must be a written contract between the parties, executed by both
parties in accordance with the requirements of Chinese law. Traditionally, it has
been common in China to do business without a contract. The court will insist on
a written agreement that unambiguously names the parties and provides the
basis for the agreement.
 Second, the contract must be enforceable in China. As a practical matter, no
Chinese court will enforce a foreign judgment and it can be quite difficult to get
them to enforce a foreign arbitration award.
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19. Legal procedures to open a new business
 Have the correct documents. The
following documents are normally needed
from the investing business entity:
 Articles of Incorporation or equivalent
(copy)
 Business license, both national and
local (if any) (copies)
 Certificate of Status (original)(U.S. and
Canada) or a notarized copy of the
Corporate Register for the investor or
similar document (original)(Civil Law
jurisdictions)
 Description of the investor's business
activities, together with added materials
such as an annual report, brochures,
website, etc.
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Articles of Association. This document
will set out all of the details of
management and capitalization of the
company. This includes directors, local
management, local address, special rules
on scope of authority of local managers,
company address, and registered capital.
Feasibility Study. The project will not be
approved unless the local authorities are
convinced it is feasible.
Leases: An agreement for all required
leases must be provided. This includes
office space lease and warehouse/factory
space lease.

20. GOVERNMENT INFLUENCE ON
TRADE
 Tariff
 The average tariff was higher for agricultural
products at 15.6% while the average tariff for
non agricultural products was 9.0%. Since
expanding domestic consumer demand is an
important move in achieving stable economic
growth and economic restructuring, it was
decided that steps would be taken to
improve policies on the import and export of
consumer goods.
 Sales tax
 From 2012, China began to implement
business tax to VAT conversion pilot
program. Corporate income tax is lowered
to 25% (from 30%) for both domestic and
foreign-invested enterprises from January
2008. Individual income tax for foreign
nationals working in China is charged at
progressive rates from 3% to 45%. The
import consumption tax rate has been
lowered to 15% from 30%.
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21.  VAT
 VAT on imported goods at basic rate of
17% for general goods and at a lower
rate of 13% for some foodstuffs, grains
and edible vegetable oils, gas and other
energy products for domestic use,
books and newspapers, magazines,
feedstuffs and fertilizers, etc.
 Membership in regional economic and
trading blocks that will grant preferential
treatment?
 China has FTAs in force with regions and
countries such as ASEAN, New Zealand,
Singapore, Switzerland, Korea and
Australia. It is currently
negotiating FTAs with regions and
countries such as Regional
Comprehensive Economic Partnership
(RCEP), the Gulf Cooperation Council
(GCC) countries, Norway, Japan-Korea,
Sri Lanka, and Maldives. Reduced import
tariff rates may be applied to certain
commodities imported from FTA countries
into China.
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22.  Market prospects
 China’s Garment industry shows
apparent scale economy and cost
effects in material supply, labor costs,
product qualities, compatibility
between up and down stream, which
contribute to its vigorous export
competitive advantage.
 Current product usage habits
 In a survey report published by HKTDC
Research in 2015 on garment
consumption in the Chinese mainland,
respondents indicated that their average
spending on garments in the 12 months
prior to the survey was Rmb4,000, while
their average budget for buying
garments in the next 12 months is
Rmb4,517. Mainland consumers have
the habit of visiting clothing stores
frequently, with almost 80% of them
visiting at least once a month.
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23. COMPETITIVE PRODUCTS ON THE MARKET IN
CHINA
 Figures from a mainland apparel
brands research centre indicate
that, with more than 10,000 brands
in existence, the degree of brand
concentration in the market has
gone down.
 In focusing on innovation and brand
upgrading in response to market
changes, they are driving the
development of domestic apparel
brands.
 Currently, China’s high-end garment
market is almost taken up by brands
from France, Germany, Italy, Japan,
the US, the UK and Korea.
 Overall, the garment market was
relatively slow in recent years, but
fast fashion and online sales
continued to grow. In particular,
European brands such as Zara and
H&M have posted marked growth in
market shares.
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24. RETAIL DISTRIBUTION CHANNELS
 Garment sales channels ranging from
warehouse-style shopping centers,
supermarkets and chain stores,
specialized garment markets, mail-
order, TV and online sales.
 Specialized garment markets:
Focusing mainly on the mid- and low-
end segments, specialized garment
markets have played an indispensable
role in China in the 1980s.
 Specialty stores: Selling in specialty
chain stores is now one main model of
selling branded garments and quite a
number of enterprises are adopting a
combination of franchised stores and
self-operated stores.
 Garment supermarkets and discount
stores have now become the new
skyline in the garment market.
Garment items sold in supermarkets
are usually not the trendiest in style,
but prices are more affordable and
quality is more assured
 Online shopping market: China’s
online garment shopping market has
gradually come of age and people
have formed the habit of online
shopping over the years. Online
shopping had a penetration rate of
over 30% in 2014.
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25.  Major advertising media used in the
country
 The most effective advertising or promotion activity
is offering discount/sale in shopping malls, followed
by TV/radio/broadcast commercials. Other than in
Shenyang, Tianjin and Chengdu, offering
discount/sale in shopping mall is the garment
advertising/promotion activity that is most effective
in attracting the attention of the respondents in the
survey.
 Total size of the market and market
potential for your product
 The Garment industry has long been a pillar 0f
China’s economy thanks to its advantage in
factor endowment and market scale. The trade
volume of the Garment sector has increased by
27.11 times during the past 25 years (from the
Reform and Opening). In 2005, Garment exports
took up 15.4% of China’s total exports and
24.4% of the world’s total exports in Garments.
The production and exports of Chinese Garment
products are the largest in the world.
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26.  Target market and demographics
for your product
 Women’s garment market: China’s
women’s garment brands have already
developed into a market structure which
encompasses high- to low-end products.
 Men’s garment market: The consumer
market for men’s garment is now
undergoing a growth period..
 Children’s garment market: According to
National Bureau of Statistics figures, in
2015 there were about 240 million children
under the age of 15 in China and, for the
whole year, 16.55 million babies were born,
representing a birth rate of 12.07%.
 Work wear (uniform) market: According
to an assessment of Chinese leading
enterprises in work wear released by the
China National Garment Association,
there are 19 industries in China that
require wearing standard uniforms and
market demand is estimated to be worth
more than Rmb300-400 billion a year.
 Casual wear market: As the economy
grows, mainland consumers’
requirements on casual wear are on the
rise and casual wear categories are also
changing and evolving continuously.
 Sportswear market: From Adidas, Nike,
Puma, Li Ning and Anta to Qiaodan, 361
Degrees and Step, the sportswear market
has posted rapid growth in the last few
years.
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27. Thank you for listening
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