This presentation throws light on the current stature of China and has traced its competitive success factors , besides the threats they face

1. A SWOT Analysis on CHINA
by
Dr.Malathi Selvakkumar

2. CHINA
It has the largest population in the world
It is a communist country and
ruled by the People’s Republic
of China since 1949
It has shifted from a planned
economy to a mixed economy
They follow an open market
environment called as “market
socialism” introduced by the
government

3. CHINA
o The country follows socialism with Chinese
characteristics, that has been adapted in its
Constitution since 1982
o China became a member of WTO in 2001
o Between 1997 and 1999, Hong Kong and Macau
became their special administration regions
o These were earlier European
Colonies

4. CHINA
• It is preparing itself to become the world leader
• If so, it will affect not only the US, but also the global
economy, impacting the global social system
• When China becomes the world leader, it will bring
in a wave of new socialism

5. CHINA
 They are taking conscious steps to become a world
leader
 World Bank and Un work with capitalism
 If China conquers the top position in the World, it
will become a socialistic system

6. CHINA – STRENGTHS- POPULATION
Has the world’s highest population of 1.43 billion in
2020
Currently, the birth rate is controlled in comparison
to India
Industrial productivity higher because of its HR

7. CHINA – STRENGTHS- DEFENCE
Bags the 3rd place in the world after US and Russia
Its military expenses in 2018 was $ US 250 billion
Controls several harbours and airports across the
globe
Its Border Soldiers count 22,60,000, while others
total 14,52,000

8. CHINA – STRENGTHS- Economy
It has a track record of being the fastest growing
economy in the world
China’s growth pushed Japan
from its then 2nd position to the 3rd
in 2010
It’s GDP is the 2nd largest in the
world, following USA
They are marching forward with the
focus of sweeping the global
economy as UNO NUMERO

9. CHINA – STRENGTHS- FDI
According to the World Investment Report 2020
(UNCTAD), the FDI in China is showing an upward
trend
Recorded an increase to US$141 billion in 2019
from US$138 billion in 2018
It is noted for its development in infrastructure

10. CHINA – STRENGTHS- FDI
The investing country has an easy access to all
Chinese factors of production, making it a
manufacturing hotspot
This has given huge scope for investors across the
globe to invest here

11. CHINA – STRENGTHS- National Savings
 According to the World Bank Report in 2017, GDP
of China was US$ 12.238 trillion
 It has secured the 3rd rank among 170 countries,
with a high savings rate of 47%
 High savings rate is an indicator of the earning
capacity of any country

12. CHINA – STRENGTHS- National Savings
High savings rate is a economic indicator of earing
capacity
China’s savings is nearly 50% of its GDP
This paves way for commendable economic growth

13. CHINA – STRENGTHS- As a creditor
• It has a high fiscal power and grants development
loans to around 150 under developed and
developing countries across the globe
• Lending by China amount to over US$5 trillion,
exceeding that of IMF and World Bank
• This lending is through more than 2000 loans to
different countries

14. CHINA – STRENGTHS- Belt and Road
Initiative (BRI)
o Popularly called as the “Silk Road” or the “one Belt
One Road”, in 2013 china implemented its
infrastructure development strategy, matching
global standards
o China has signed MoU with 138 countries to accept
this initiative

15. CHINA – STRENGTHS- Belt and Road
Initiative (BRI)
The objective of this strategy is to promote global
economic development through inter-regional
connectivity
This has helped to foster its ties with other countries
and enhance its goodwill
Expected to complete in 2049

17. CHINA – STRENGTHS-Infrastructure
Focus is on production of energy, infrastructure and
basic resources
China is the base for the world’s largest “Hydro-
Electric Dam” (3 gorges dam)
Solar power sector manufactures
more ta 2 gigawatts per annum
which is more than 25% of the
world’s total production

18. CHINA – STRENGTHS
Infrastructure and production
• Its flagship products are fastest supercomputers and
high speed rail networks
• It has emerged as the world leader
in production
• 80% of the world’s AC units are
manufactured by them
• Personal computers are manufactured
45 times more than the rest of the
world’s combined production

19. CHINA – STRENGTHS
Infrastructure and production
World’s largest manufacturer of ships, shoes, cell
phones and solar cells
3rd largest produce of automobiles (car)
China constitutes 60% of the world’s cement
production

20. CHINA – STRENGTHS
Manufacturing sector
China’s share in the global manufacturing output in
2018 was 28%, putting US behind it
They follow “mass production” strategy for global
market, that reduces the cost of production
40% of China’s GDP is contributed by their
manufacturing and industrial sectors

21. CHINA – STRENGTHS-World Trade
Bagged the 1st place in global trade scenario,
followed by USA and Germany
Accounted for 12.4% of global trade valued at US$
4.60 trillion in 2018
US and Germany followed with 11.5% and 7.7%
respectively

22. CHINA – STRENGTHS-World Trade
Year China’s share in World Trade
1976 1%
1995 3%
2018 12%
2025 20% (projected)

23. China – Weakness – No Democracy
 China is a communist economy, where people are
restricted to airing their grievances only
 All members of the public are under a scanner
 If anything is expressed against the government,
the individual will be identified and punished
 Posts on the internet are also monitored

24. China – Weakness – No Democracy
o Comments against the government is a punishable
offence
o No freedom of expression by media – newspapers,
TV and social media
o Government has no transparency
o They do not advocate democracy- for the people
and by the people

25. China – Weakness - Population
More than 50% of the Chinese population are
elderly and have low productivity levels
Because of this, their economic status and standard
of living is poor
There is a stark difference between the rural and
urban Chinese population

26. China – Weakness - Language
Chinese “Mandarin” is the official language they
use
Adaptation of English to communicate at global
level is a necessity
English speaking population is negligible
So trade relations and inter-country dealings are
dependant on translators

27. China – Weakness – Low productivity
Of their total population, 300 million Chinese are
farmers with low productivity
S.Korean farmers are 40 times more
productive than Chinese farmers
R&D
Government is not inclined to R&D
and so poor fund allocation for it
If allocated, utilisation is very poor

28. China – Weakness
Environmental Issues
China is marked with air pollution, soil deterioration
in terms of fertility and polluted water bodies
Pollution control measures are poor although mass
production is done and manufacturing is on a
massive scale
90% of the rivers in Chinese towns are polluted

29. China – Weakness- Export Focus
o An array of Chinese products are available across
the globe
o China has been blamed by USA ,Australia and
European countries for the spread of Covid 19
o With the ban on Chinese products in India too, their
exports have been steeply hit

30. China – Weakness- Social Disparity
 Farmers and workers in villages are paid poor wage
rates
 Farmers are not allowed easy entry into the city
 It creates an economic and social disparity between
urban and rural residents

31. China – Opportunities - HR
Huge population base in the entire world
If the rural population is trained to improve
productivity, their output will also improve
Then the contribution from agriculture to GDP can
also improve

32. China – Opportunities - FDI
The government is open to collaborations and joint
ventures in China through investment
Importance given to infrastructure development (880
kms between Pakistan and China)
With huge potential in solar energy, IT, production, and
marketing, China has become the investment hotspot
of the world
With high lending from China, more
countries are open to tie up on a
win-win basis

33. China – Opportunities
Bi-lateral Relationships
With extensive loans offered to developing
countries, China stands a great chance to take over
their economy
(eg) Venezuela – oil; Srilanka – Hambantota Port
taken on lease for 99 years
Chinese overseas military base established in
Dijibouti, Africa

34. China – Opportunities
Bi-lateral Relationships
o Zambian State Electricity Company, ZESCO, taken
over by China
o All this is done to get a strategic advantage in the
economic control in exchange for the collection of
loans given by China

35. China - Threats
• The cold war that existed between USA and Russia is
now replaced by USA and China
• The power of USA should not be
undermined
• Economic ties with India have
soured such that “boycott China” has
become the mantra today
• If India uses this opportunity and adopts mass
production and improves domestic
production, China will be hit