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Investment in china and chinese economy

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Investment in china and chinese economy

  1. 1. Investment Spending in China: Reap What You Sow
  2. 2. Meaning of Investment • Investment means to place a portion of our money in company shares or banking in order to obtain an increase.
  3. 3. About china’s economy • China has the world’s second largest economy in terms of nominal GDP, i.e. US$ 9.3253 trillion. • In 1978 China became the country with the fastest economic development in the world, it is the second largest exporter and third largest importer of goods.
  4. 4. An Incredible Growth • Over the last 20 years China has got an extremely high savings rate, averaging around 40 %, Chinese economy has enjoyed one of the highest growth rates in the world. • At the beginning of the 90s there was an incredible increase in GDP, from 4% in 1990 to 12.7% in 1994. • In the ranking of GDP, in 2007 China surpassed Germany and in 2010 Japan.
  5. 5. Coming to Grips with the Numbers and therefore Potentials 1.3 billion people  0.7 billion peasants  0.2 billion migrant workers  200m aspiring middle class  100m middle class as now  14m engineers
  6. 6. Summary • This case study is all about China, whom export is going down (49% to 39%) but he maintained his economic growth. • Export growth fell to just 2.9 percent year-on-year last month, down from 11.6 percent in October. • China’s GDP, which grew at 7.4 percent in the third quarter and 7.6 percent in the second, to bounce back above the 8 percent threshold this quarter, with growth coming in at 8.2 percent. • GDP of investment is 44% last year which is greater then America, i.e. 18%.
  7. 7. • China’s investment spending surged as a nation poured money into roads, railways, and power grids to counter a plunge in exports. • Urban fixed asset investment climbed a more than estimated 26.5% January and February combined to 1.03 trillion yuan ($150 billion) from a year earlier. • China is spending on railways a tripled, agriculture spending is doubled and coal mining expenditure jumped 59.6%.
  8. 8. • According to National Bureau of Statistics data, the share of fixed investment in China’s gross domestic product rose to 46.1% in 2012, up from 45.6% in 2011.And now it is 47%. • China’s GDP decelerated to 7.8% growth in 2012, down from 9.3% in 2011 and the slowest since 1999. As the firms and local governments turned to borrowing to finance investment, a ratio of household, corporate and local government debt to GDP has ballooned from around 123% of GDP in 2008 to about 180% in 2012.
  9. 9. Domestic Investment
  10. 10. Ques:-Do you think that China’s investment spending could soon be bigger than US? Justify. Ans. Yes, China’s investment spending should soon be bigger than US because according to statistics released by Rhodium Group, last year China’s investment in the US is doubled, reaching a record high of 14 billion USD. FDI from Chinese private enterprise also increased quickly : before 2011, private companies only represented 30% of China’s total investment in the U.S., in 2012 this figure is 54% and in 2013 this figure is 76%.
  11. 11. The external environment is also an incentive for Chinese enterprises to go abroad. • Firstly, since the outbreak of the international financial crisis, the US government is looking to create more job opportunities through absorbing foreign capital, providing a favourable situation for Chinese enterprises. By the end of 2013 Chinese enterprises had created more than 70 thousand job opportunities in the US.
  12. 12. • Secondly, "reindustrialization" is an important part of U.S. strat egy. While the U.S. government improves the business environment to attract investment, China’s high end manufacturers are seizing the resulting opportunities. • Thirdly, investing in the US helps Chinese enterprises to improve their result, research, and design ability and get closer to American consumers through developing local logistics and distribution channels.
  13. 13. The rapid increase in China's investments in the U.S. has its internal logic. As the world's biggest mature market, with the most advance technologies and the strongest R&D capability, the US will continue to attract Chi nese investment. Areas with the greatest investment potential include infrastructure, ene rgy, and middle and high end manufacturing. http://www.heritage.org/research/projects/china -global-investment-tracker-interactive-map

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