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Trade with china


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this ppt contains information about
1. brief about china
2. Fta trade of china
3.china/india trade

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Trade with china

  1. 1. By -Akshat poonia , Aanchal bansal, Eshan gambhir, Jasmine sahi , Arshpreet University instt. of applied mgmt. sciences (Chandigarh). CHINA
  2. 2. China is well known for …  Technical advancement  The Great wall of china  Large population  Giant pandas  Jacky chen and Bruce lee  One children per family  Mark zuckerberg’s Gf
  3. 3. China - An Introduction  An ancient and modern civilization  A rich and complex history  Superb cultural legacy  The most populous nation on Earth  Many nationalities  Socialist government  Very diverse landscapes
  4. 4. China - History  Origins of Chinese Kingdom lost in mythology  First Emperor in Many Imperial Dynasties were chiness: Xin, Han, Ming, Tang, Manc hu  The Great Wall of china is the biggest wall of the world  Republic founded in1949
  5. 5. China - Culture  Religions - Buddhism, Taoism, Islam  Art - painting, sculpture, furniture, fabrics etc.  Philosophy - Confucian thought, etc.  Music - Beijing Opera  Kites - Wei Fang kite making tradition
  6. 6. Who Are the Chinese?  The most populous nation on earth  Population = 1.3 billion  20% of world population  Population was only 0.5 billion in 1950  One child per family policy since 1979  Most Populated Province - Henan (92.56 million, almost twice the UK)
  7. 7. China - Landscape  Western area mostly mountains, snow and desert - very sparsely populated  Northern edge borders the Gobi Desert  South-western part tropical - dense forest  Remaining central and eastern zones are very diverse - river valleys, plains, mountains.
  8. 8. China - Government  China is governed by the Communist Party of China  President Hu Jintao and Prime Minister Wen Jiabao are the leaders of China  The parliament currently has 25 members  There are 22 provincial governments, as well as 4 major cities, 5 autonomous regions and 2 special administrative regions
  10. 10. POLITICAL ENVIRONMENT  People’s Republic of China  Communist party of China(CPC)  Fundamental framework of China’s political system comprises of people’s congresses, multi-party cooperation and self governance  Cooperative relations between the CPC and other political parties are based on principle of long term coexistence and mutual supervision
  11. 11. ECONOMIC ENVIRONMENT  World’s second largest economy  GDP growth rate:-7.8% (2012 estimate)  FDI accounts for 27% of the value added production,4.1% of the national tax revenue, and 58% of the foreign trade  Inflation rate:-2.7% as on 9-07-2013  Unemployment rate:-4.10%  Population below poverty line:-13.4%
  12. 12. • Acc to 2010 estimate labor force in China was around 815.3 million, exports were around $1.581 trillion and imports were around $1.327 trillion
  13. 13. SOCIAL ENVIRONMENT  Population of china as on 22-09-2013 is 1,360,070,000  Highly skewed sex ratio:117.8 boys for every 100 girls  Literacy rate:-95.9%
  14. 14. TECHNOLOGICAL ENVIRONMENT  INNCH set sail on the world’s first and only nuclear informatization forum--Nuclear Information Technology China Forum 2013 (NITF2013) which will gather around 150 senior experts and executives to analyze the trend of China’s nuclear informatization industry. NITF2013 will target to provide the high-end platform to promote the communication between government, NPP & Nuclear IT companies in and aboard.  On 18th April 2013 China Environmental Technology Acquired Shenzhen Huaxin Zhongshui Protection Engineering Company Limited to expand water projects.  On 13th July 2012 China Environmental Technology Signed Strategic Co-operation Agreement with China Railway 25th Bureau Group Co., Ltd to Mutually Diversify Business.
  15. 15. CONTD.....  Internet users:-718 million (2013)  China Telecom alone serves 55 million broadband subscribers  Tianhe-1A world’s fastest supercomputer developed in 2010.  China has been pioneering the deployment of pebble bed nuclear reactors, which run cooler and safer than conventional nuclear reactors.  In 2011, China unveiled a prototype train capable of reaching speeds of 310 mph (500 km/h), the first ultra-high-speed train developed solely by its domestic railway industry.  In September 2011, the first Chinese space station module, Tiangong- 1, was successfully launched, marking the first step in a decade-long project to construct a large manned space station.  made its first attempt at the robotic exploration of Mars in November 2011.  China conducted a successful test of an anti-satellite missile.
  16. 16. ENVIRONMENTAL FACTORS  China has a variety of forest types. Hardwoods such as teak and mahogany are cultivated as commercial crops, as are pine and other softwoods. Bamboo is a very fast growing plant which can grow up to one metre a day. An interesting tree found in China is the ginkgo or maidenhair tree which is used in Chinese medicine. It is one of the worlds earliest surviving plant species and first grew 160 million years ago.  China has a wide variety of wildlife: tigers, snow leopards, monkeys, yaks and giant pandas. The birdlife includes peacocks, parrots, cranes and storks. Cormorants are used by some fishermen on the rivers to catch fish for them.  Chinas natural environment has been adversely affected by human intervention in a number of ways. Deforestation has gone on for many years. In 1978 steps were taken to protect the environment.  There is now a programme of tree planting and a national conservation organization looks at the consequences for the environment of using pesticides and chemicals
  17. 17. CONTD....  On 26th July 2012 China Environmental Technology Signed Co-operation Agreement with The Municipal Government of Zixing City in Hunan to Mutually Develop the Environmental Protection Project of the Dongjiang Lake.  On 29th April 2013 China Environmental Technology Signed a Contract with the Beijing Water Authority in Relation to the Project of Empress Xiao River.
  18. 18. LEGAL ENVIRONMENT  Retail outlets in urban areas of China normally open from 09.00 till 18.00, trading 7 days a week and 365 days a year including public holidays as they are considered to be peak trading times  China has a number mandatory laws regarding foreign business entering the country although access was made complex in 2004 when China gained full membership to the World Trade
  19. 19. China’s Free Trade Agreement Strategies • Trans-Pacific Partnership (TPP) • has caused China some disquiet • The agreement was signed among four countries (Brunei, Chile, New Zealand and Singapore • five additional countries (Australia, Malaysia, Peru, the United States, and Vietnam) began negotiations to join the group • The TPP agenda is considered by many a force that could rip apart East Asian economic integration. • The most important strategy for China is to actively push its own FTAs. • China is also considering joining TPP, although it is still cautious about this option. • It will be difficult, if not impossible, for China’s FTA strategy to reach its political aim.
  20. 20. • The Chinese Government deems Free Trade Agreements (FTAs) as a new platform to further opening up to the outside and speeding up domestic reforms • An effective approach to integrate into global economy and strengthen economic cooperation with other economies • As well as particularly an important supplement to the multilateral trading system. • Currently, China has 14 FTA partners comprising of 31 economies, among which 8 Agreements have been signed already.
  21. 21. Dividing China’s FTA into 4 parts:- China's Free Trade Agreements Free Trade Agreements under Negotiation Free Trade Agreements under Consideration Preferential Trade Agreement
  22. 22. China's Free Trade Agreements • China-ASEAN FTA • China-Pakistan FTA • China-Chile FTA • China-New Zealand FTA • China-Singapore FTA • China-Peru FTA • Mainland and Hong Kong Closer Economic and • Partnership Arrangement • China-Costa Rica FTA China’s Free Trade Agreements under Negotiation • China-GCC(Gulf Cooperation Council) FTA • China-Australia FTA • China-Iceland FTA • China-Norway FTA • China-SACU(Southern African Customs Union) FTA
  23. 23. China’s Free Trade Agreements under Consideration • China-India Regional Trade Arrangement Joint Feasibility Study • China-Korea FTA Joint Feasibility Study • China-Japan-Korea Joint Study • China-Switzerland FTA Joint Study China’s Preferential Trade Agreement • Asia-Pacific Trade Agreement
  24. 24. CHINA-ASEAN FTA • The leaders of both China and ASEAN Member (AMS) signed the Framework Agreement on China-ASEAN Comprehensive Economic Cooperation at the sixth China-ASEAN Summit in November 2002. • In January 2007, the two parties signed the Agreement on Trade in Services, which entered into effect in July of the same year. • In August 2009, the two parties signed the Agreement on Investment. • The establishment of China-ASEAN free trade area enhances the close economic and trade relations between the two parties, and also contributes to the economic development of Asia and the world at large.
  25. 25. 28 Impact of Chinese Goods on Indian Economy
  26. 26. No way to escape the DRAGON!!!  Using the big Indian market – to dump their products  Killing the Indian units Example Last year during Diwali, china made crackers were sold in the Indian market. These crackers reportedly contained Sulphur. Sulphur is more harmful than Nitrate. Since the Chinese crackers were cheaper than the Indian crackers, so they managed to attract innocent Indian lot. As a result the Indian cracker industry saw a decline in the revenue. 29
  27. 27. No way to escape the DRAGON!!!  Due to cheaper prices of Chinese products – popular among the Indian masses  Negative effect on our own manufacturing units For instance Data reveals that 60% of the Industrial units in the region of Thane and Bhivandi near Mumbai have been closed down. (Indian cottage industries i.e. handicraft) 30
  28. 28. No way to escape the DRAGON!!!  Due to its cheap labor ◦ China offers low – priced imports  Also affected Indian export market ◦ China replaced Indian goods in the foreign market ◦ Due to being cheaply produced  Fact to be noted: ◦ China manufactures both low as well as high quality products ◦ Eg: the manufacturing of Apple iPhone, Nokia Handset etc. 31
  29. 29. Made in China, Sold in India  China is ruling in many markets  India is the hub of diverse business opportunities ◦ Slowly yet steadily, Chinese products are dominating similar Indian products ◦ Eg: Electronics, crackers, statues, apparels, etc ◦ Eg: In 2010, flooding of the Indian markets with Chinese made statues - welcomed with open arms by the Indian consumers 32
  31. 31. ITS BlueBerry not BlackBerry  Same design  Same colour shade  May be having advance features  Very cheap  Same has been done to various products and brand ◦ E.g.: Apple iPhone 34
  32. 32. Positive Aspects Negative Aspects  Relatively Cheaper than the regular/known brands  Advanced features  Affordability, common man can easily purchase  Widely available  Unsafe products  Non long-lasting  Resulted in closure of many businesses  Outflow of capital  Increased in Imports & decreased in Exports
  33. 33. Trade Relations
  34. 34. Trade Relations  India considers China its largest trading partner  China & India export and import from each other in a huge quantity  India scores only in resource based exports & low technology based exports  China is no. 1 in low technology product, also scores well in medium & high technology BASIS INDIA CHINA Export of Goods & Services (% of GDP) 21% Over 40% Imports of Goods and Services (% of GDP) 24% Over 30%
  35. 35. Trade Analysis Years India’s Exports to China India’s Imports from China Trade Balance Total Trade 1999 825.74 1287.18 -461.44 2112.92 2000 1353.44 1527.51 -174.07 2880.95 2001 1699.06 2057.85 -358.79 3756.91 2002 2273.82 2779.14 -505.32 5052.96 2003 4251.32 4004.50 246.82 8255.82 2004 7677.98 5994.59 1733.39 13622.57 38 India’s exports to China in 2003 and 2004 were phenomenally high due to a surge in exports of steel. This can be attributed to a record growth in the iron and steel sector in India during this year.
  36. 36. List of Imports by India from China  Electrical Machinery (47%)  Organic Chemicals and Inorganic Chemicals  Iron And Steel, Iron/Steel Products  Rare Earth Metals  Fertilizers  Impregnated Text Fabrics  Manmade Filament, Fabric  Silk; Silk Yarn, Fabric  Vehicles  Mineral Fuel, Oil  Aluminum etc 39
  37. 37. List of Import by China from India  Ores, Slag, Ash  Metals  Organic Chemicals Salt; Sulphur; Earth, Stone  Inorganic Chemicals; Rare Earth Metals  Cotton and Yarn, Fabric  Copper and Articles Thereof  Hides And Skins  Artificial Flowers, Feathers  Tanning, Dye, Paint, Putty  Precious Stones  Fish And Seafood  Plastic 40
  38. 38. Companies  Indian companies in China: ◦ Reliance Industries ◦ Ashok Leyland ◦ Adani Power Limited ◦ Bank of India  Chinese companies in India: ◦ Lenovo ◦ Haier ◦ Industrial Bank 41
  39. 39. BUT Senior Vice President and Chief Economist,World Bank Professor of Economics and C Marks Professor, Cornell University
  40. 40. 43
  41. 41. Chinese Business Practices & Etiquette  A nod or slight bow is also a widely used greeting  Avoid using physical contact, other than a handshake, when greeting a new contact  In China the surname comes before the first name  For business purposes it is appropriate to address a Chinese person by their business title and surname (i.e. President Li)  Never underestimate the importance of the relationship building process, as the Chinese prefer to do business only with people they know  Maintain professionalism and formality at all times
  42. 42.  Building relationships involves exchanging of gifts and favors; always reciprocate gifts and favours as appropriate  Meetings are very formal and must be scheduled in advance  Arriving late is very insulting Be sure to arrive on time or early  Meetings will begin with small talk. Keep the conversation positive when speaking about any experiences in China and avoid politics  Seating will be in descending order of rank with senior people sitting opposite each other  The Chinese will not say “no” directly, an answer other than yes could mean no  If you are planning to discuss legal or very technical topics, bringing an interpreter is highly recommended
  43. 43. Conclusion  India & China together constitute 1/3rd of the total world population and 1/4th of world’s skilled labour force.  They are two future economies to TRADE with!  For sustainable trade relationship between the two nations, its imperative that they move from competition to cooperation.  As 20th century was US century, 21st century would be Asian century where the two nations would lead SO, IT COULD BE CHINA & INDIA IN THE FUTURE, NOT CHINA v/s INDIA 46