This document provides an overview of China, covering political, economic, and sociocultural factors. Politically, China is ruled by the Communist Party and has a decentralized system with limited democratic processes. Economically, China has experienced rapid growth with an average 10% GDP increase for 30 years, making it the world's second largest economy. Socioculturally, China has a large and growing population that is becoming more urbanized and educated, with rising incomes and consumption.

1. CHINA
Juncheng Wang
07/06/2012

2. | 2
Contents
▪ POLITICAL FACTORS
▪ ECONOMIC FACTORS
▪ SOCIOCULTURAL FACTORS

3. | 3
Political Factors
▪ 22 provinces
▪ 5 autonomous regions
▪ 4 directly administered municipalities (Beijing, Tianjin,
Shanghai and Chongqing)
▪ 2 highly autonomous special administrative regions
(SARs) (Hong Kong and Macau)
▪ Capital is Beijing
▪ Ruled by the Communist Party of China (CPC)
▪ The political system is much decentralized with limited
democratic processes internal to the party and at local
village levels
▪ “The level of support to the government is among the
highest in the world(85%)”
– Pew Research Center survey (2008)
SOURCE: China National Bureau of Statistics; Team analysis
▪ As the most important source of fiscal revenue, tax is a
key economic player of China’s macro-economic
regulation
▪ In an effort to encourage inward flow of funds, technology
and information, China provides numerous preferential
treatments in foreign taxation
Taxation Policy
Social Welfare PolicyForeign Trade regulation
▪ The second largest poverty population among the
world(250million)
▪ 1999-2004 China experienced the greatest decrease its
poorest population(2.9million)
▪ 2008 China had 159.89 million people(12%) aged 60 or
above , will reach 0.28 billion(18%) in 2015
▪ Social welfare/fiscal revenue will take from the current
27% (2009) to 35% the coming 12 years
▪ Late 1980s China started import/export
▪ 1991 China joined in APEC (Asia-Pacific Economic
Cooperation)
▪ 2001 Created SCO(Shanghai Cooperation Organization)
▪ 2001 Has been approved to WTO
▪ 2004 "PRC Foreign Trade Law“
▪ 2004 proposed an entirely new East Asia Summit (EAS)
framework
924847713543
5,8784,9914,520
3,4942,713
2006 07 08 09
1,191
2010
TAX(bnUSD)
GDP(bnUSD)
0.0
0.1
0.2
0.3
TAX(growth rate)
GDP(growth rate)
TAX/GDP
Government Stability

4. | 4
Mid China - 中原

5. | 5
North east China

6. | 6
North west China

7. | 7
South east China

8. | 8
South west China

9. | 9
Tibet

10. |
Foreign Exchange Reserves and Exchange Rate
Money Supply
Disposable income
GDP per capita
GDP
10SOURCE: International Monetary Fund; National Bureau of Statistics of China
Economic Factors
USD
4,382
3,7373,404
2,6452,064
7,519
6,7866,189
5,554
4,749
2006 07 08 09 2010
GDP per capita
current prices
GDP based on
PPP per capita
12.7%
14.2%
9.6%
9.2%
10.3%
GDP Growth
rate
5.0
-0.7
5.9
4.8
1.51.8
Year Reserves
(tnUSD)
Change
(%)
Exchange
Rate(USD:Yuan)
Change
(%)
2005 0.8189 25.5 0.000788 2.56
2006 1.0663 23.2 0.000785 3.35
2007 1.5282 30.2 0.000779 6.9
2008 1.946 21.5 0.000774 6.9
2009 2.3992 18.9 0.000773 0.1
2010 2.8473 15.7 0.00077 5.04
bn USD
5,878
4,9914,520
3,494
2,713
10,086
9,057
8,219
7,339
6,242
GDP current
prices
GDP based
on PPP
5.5%
6.3%
7.4%
8.6%
9.3%
Percentage
(China/World)
19,10917,17515,78113,78611,75910,493
0
10,000
20,000
2005 06 07 08 09 2010
72.6060.6247.5140.3434.5629.87
0
50
100
Annual Inflation rate of China (consumer prices)
tn RMB
RMB

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Real estate industry

12. |
660 956792
969
762
0
1,000
2,000
3,000
2005 06 07 08 09 2010
1,221
1,431
1,133
1,202
1,006
1,578
1,395
Export
Import
Import Data Comparison
Fixed Asset Investment
12SOURCE: International Monetary Fund; National Bureau of Statistics of China; Team analysis
Economic Factors – International Investment & Trade
“China is the world's most preferred investment destination.“
– Ernst & Young’s <2010 report of the European
investment attractiveness>
2009 China absorbed
90 bn USD, ranked
NO.2 all over the
world
First half of 2010,
approved 12,000
new established
foreign companies,
increased 19%
½ of 2010,Used
54.1 bn USD
foreign
investment,
increased 21%
The robust economic growth
▪ The world's second largest economy
▪ Average growth rates of 10% for the past 30 years
▪ The largest exporter and second largest importer
of goods in the world
▪ Little influenced by the big crisis
▪ Active trade balanced for 30 years
1,202
0
500
1,000
1,500
China
Germany
US
bn USD
1,006
0
1,000
2,000
3,000
0807062005
US
Germany
China
2009
27.814
22.485
17.283
13.73211.0008.877
0
10
20
30
tn RMB
Export & Import Data of China
Export Data Comparison
bn USD
bn USD

13. |
▪ A great influence on the Chinese consumers
The Impact of Advertising
Recommen-
dation
Purchasing
guide On-line
advertisements
Newspaper
13
Sociocultural Factors
SOURCE: China National Commercial Information Center; China Consumers Association; National Population Statistics;
National Bureau of Statistics of China; Team analysis
Engel's Coefficient Population Demographics
Income Distribution
▪ GINI coefficient: 0.45
▪ Increasing income
imbalance
▪ Obstacle: Unequal
income distribution
and poverty
Average
41.25%
Japan
24.12%
USA
16.45%
2000 02 04 06 08 2010
20
30
40
50
Urban Residents
Rural Residents
Percent
51%
Media
Adver-
tising
24%
18%
7%
other ways
65%
Television
21%
15%
mn
0
500
1,000
1,500
Total Population
20101953 64 78 1990 2000
5.84%
16.80%
27.70%
35.60%
23.60%
11.60%
Population
Growth Rate(%)
Education Level & Social Mobility
th
1964 1982 1990 2000 2010
Junior College
and Above
Senior
Secondary
School and
Technical
Secondary
School
0
12
15
3
6
9
33.6%
22.8%
15.9%
6.7%
4.1%
Illiterate
Rate (%)
▪ Huge population & decreasing growth rate
▪ Demographic dividend and speeding aging
▪ Imbalanced gender ratio & reducing family volume
The rest
Last 10%
54%
Top 10%
1%
45%
Household property income distribution
▪ Developing urbanization & living situation
▪ High working load & Increasingly affluent leisure activities

14. | 14
People’s living