1. Presented by: PG-B, Group 14
Bhawya Dwivedi -114
CHINA Sahil Khanna- 148
Swati Agrawal-154

2. Agenda
• Country profile
• History
• Culture
• Political System
• Economic Indicators
• Bilateral Agreements
• Infrastructure
• MNEs
• SWOT Analysis of China
• Recommendations

3. Country Profile
• China officially known as the People's Republic of China (PRC)
• Capital city –Beijing
• Largest city –Shanghai
• Currency-Renminbi (Yuan) (¥)
• Main religions-Confucianism, Taoism And Buddhism
• Neighboring countries -Afghanistan, Bhutan, India, Kazakhstan,
Kyrgyzstan, Laos, Mongolia, Myanmar , Nepal, Pakistan, Russia,
Tajikistan, Taiwan and Vietnam.
• Special administrative regions (SARs) -Hong Kong and Macau.
• Most populous state in the world, with over 1.3 billion citizens.
• Country covers approximately 9.6 million square kilometres
(3.7 million square miles)
• World's second-largest country by land area

4. History
Date Events
1644 Qing (or Manchu) Dynasty begins; Empire run by a Confucian bureaucracy
1700s China begins to open ports to Western traders on very limited basis, exporting
luxury goods (silk, tea, porcelain) to Western elites. Maintains restrictions on
import of British goods.
1793 British appeal to China to lift trade restrictions; China refuses, citing unequal
benefits and fear of Western imperialism.
1842 China defeated in Opium Wars; forced to sign humiliating Treaty of Nanjing.
Hong Kong ceded to Britain; China forced to open 5 treaty ports and grant
British special concessions and exemption from Chinese laws in these areas.
1842-1880 More Chinese treaty ports and concessions created for Western nations.
1894-1895 First Sino-Japanese War. China loses Taiwan and other Asian islands to Japan.
1900 Boxer Rebellion begins in China against influence of Western powers and the
Qing Dynasty that allowed the infiltration of imperialists.

5. 1900-1910 Qing Dynasty further declines; China essentially ruled by foreign powers.
Confucianism abolished as government ideology.
1911 Qing Dynasty implodes, Emperor abdicates.
1912 Sun Yat-sen establishes the KMT or Nationalist Party and becomes President of
new Republic of China; outlines Three Principles of the People as a way to
strengthen China.
1914-1919 Poor governance in new Republic; China starts to fall apart as independence
movements sweep through the provinces.
1921 Chinese Communist Party (CCP) formed in opposition to ruling Nationalist Party
(KMT) of Sun Yat-sen. Mao Zedong begins recruiting revolutionaries in rural areas.
1925-1926 Sun Yat-sen dies and is replaced by Chiang Kai-shek. Chiang allies with Mao and
the CCP briefly in an attempt to defeat warlords and unify China.
1927-1934 Alliance between KMT and CCP ends; Chiang purges government of Communists
and launches attack on Mao’s guerrilla forces, successfully defeating them in the
wars of the Northern Expedition. Mao continues to recruit among peasants; CCP
grows and forms Red Army.
1934-1936 The Long March begins and the CCP regroups to interior mountains of China.
Despite heavy casualties, Mao strengthens and unifies CCP after brief internal
power struggle.

6. 1937 Second Sino-Japanese War begins when Japanese invade China with Marco Polo
Bridge incident in Beijing; often considered the beginning of WWII in Asia. Japan
easily prevails, takes Beijing, Shanghai. Moves on to take capital where Massacre
of Nanjing occurs.
1938-1943 Japanese occupy China while Civil War rages on between Chiang (KMT) and Mao
(CCP).
1944-1945 Japan defeated by US. Japanese forces withdraw from China.
1945-1948 KMT does well at first against CCP. Mao rallies rural areas. Floods and famines in
1947 erode support for KMT, especially in cities where Chiang is blamed for
poverty, corruption, and incompetence.CCP begins to prevail, consolidating
power throughout northern and central China.
1949 People’s Republic of China (PRC) established under leadership of Mao Zedong.
Doctrine of Maoism prevails as a hybrid of Marxism, a celebration of peasant life,
and perpetual revolutionary struggle.
1950-1957 Mao’s “One Hundred Flowers” movement briefly encourages dissent and
diversity of opinion, allows criticism of CCP, PRC takes formal control of Tibet, a
formerly autonomous region

7. 1958 Mao consolidates power completely in the CCP and becomes a
totalitarian dictator.
1958-1963 Mao institutes The Great Leap Forward, a 5-year plan to rapidly
industrialize China through giant upheaval of rural society. Mao briefly
steps down as Chairman of the CCP; recovery slowly begins as rigid
economic policies are eased . Moderates briefly in control of CCP.
1963-1966 Mao returns to power preaching a doctrine encompassing propaganda,
political education, indoctrination, and commitment to the cult of
revolution
1966-1969 Mao institutes Great Proletarian Cultural Revolution aimed at negating
the influence of intellectuals and elites, and affirming the superiority of
peasant values and continuous revolution.
1970-1971 Cultural Revolution winds down; fanaticism begins to fade; Red Guards
disbanded.
1972 PRC opens up to the world with the historic visit of US President Nixon.
1972-1976 Gang of Four arrested. Mao/Revolution Era in which tens of millions of
people were killed is officially over. PRC is impoverished and isolated
from the world.

8. 1978 U.S and China simultaneously issued the "Joint Communique on the
Establishment of Diplomatic Relations."
1979 The two governments of U.S and China signed a three-year trade agreement,
granting each other the most-favored-nation trading status.
1982 PRC adopted its current constitution
1989 Students gather in Tiananmen Square in Beijing to protest censorship and
corruption. Students begin hunger strike.
1990-1995 CCP emerges from Tiananmen Square incident determined to roll back any
progress toward democratization or political reform of society. Party closes
ranks and increases control mechanisms . Deng Xiaoping accelerates market
reforms to establish a "socialist market economy".
1997 Reversion of Hong Kong to Chinese control
1998 Internet censorship, Banning of Democracy Party of China
2001 China enters WTO
2003 "Fourth Generation" leadership installed , SARC outbreak
2008 Beijing Olympics
2011 China overtakes Japan as 2nd largest economy, deadly flood hits China

9. Culture
• Collectivist Culture
• High context culture
• High Power Distance, with the family as the core
collective unit and authority exercised within these
units in a paternalistic manner
• Highly compatible with Confucianism traditions
• Diffusive and particularistic culture
• High masculinity and ascriptive in nature
• Lower need for uncertainty avoidance
• Increasing rights to women but not yet equal to men

10. Government In China
Type: Single Party State governed by Chinese Communist Party
Constitution: December 4, 1982; revised several times, most recently in 2004
Independence: Unification under the Qin (Ch'in) Dynasty 221 BC; Qing (Ch'ing
or Manchu) Dynasty replaced by a republic on February 12, 1912; People's
Republic established October 1, 1949.
Branches: Executive--president, vice president, State Council, premier.
Legislative--unicameral National People's Congress. Judicial--Supreme
People's Court, Local People's Courts, Special People's Courts.
Administrative divisions: 23 provinces (the P.R.C. considers Taiwan to be its
23rd province); 5 autonomous regions, including Tibet; 4 municipalities
directly under the State Council.
Political parties: Chinese Communist Party, 76 million members; 8 minor
parties under Communist Party supervision.
Legal System : Civil Law , Rule Of man

11. Economic Indicators
GDP $5.878 trillion(nominal)(2010)
$10.12 trillion(PPP)(2010)
GDP growth 10.3%(2010)
GDP per capita $4,382(nominal)(2010)
$7,544 (PPP)(2010)
GDP by sector industry (46.8%), services
(43.6%), agriculture (9.6%) (2010
est.)
Inflation (CPI) 4.9% (January 2011)
Gini index 41.5(2007)

12. Economic Indicators
• Main industries
Mining and ore processing, iron, steel, aluminum,
and other metals, coal; machine building;
armaments; textiles and apparel; petroleum;
cement; chemicals; fertilizers; consumer products
e.g. footwear, toys, and electronics; food
processing; transportation equipment, including
automobiles, rail cars and locomotives, ships, and
aircraft; telecommunications equipment,
commercial space launch vehicles,
satellites(2009)

13. Economic Indicators
HDI 0.687(2011)
Unemployment 4.2 %(July 2010)
Ease of Doing Business Rank 91st(expected in 2012)
Exports US$1.581 trillion (2010)
Export goods electrical and other machinery,
including data processing equipment,
apparel, textiles, iron and steel,
optical and medical equipment(2010)
Main export partners US 20.03%, Hong Kong 12.03%, Japan
8.32%, South Korea 4.55%, Germany
4.27% (2009)
Imports US$1.327 trillion (2010)

14. Economic Indicators
Import goods electrical and other machinery, oil
and mineral fuels, optical and
medical equipment, metal ores,
plastics, organic chemicals(2009)
Main import partners Japan 12.27%, Hong Kong 10.06%,
South Korea 9.04%, US 7.66%,
Taiwan 6.84%, Germany 5.54%
(2009)
FDI stock $185 billion (2010)
Non financial Outbound FDI $26.75 billion(2010)

15. Economic Indicators
Inbound FDI $58.35 billion(2010)
Gross external debt $406.6 billion (22nd; 2010)

16. Public Finances
Public debt 17.5% of GDP (112th; 2010)
Revenues $1.149 trillion (2010)
Expenses $1.27 trillion (2010)
Economic aid recipient: $1.12 per capita (2008)
Credit rating AA- (Domestic)
AA- (Foreign)
AA- (T&C Assessment)
(Standard & Poor's)
Foreign reserves $3.20 trillion (1st; 2011)

17. Asia-Pacific Economic Cooperation(APEC)
• It is an organisation of economies in the Asia-Pacific region formed to
foster economic cooperation and trade among member countries with a
view of enhancing international trade. It aims at reducing trade barrier,
open investment opportunities, ease the exchange of goods, services,
resources and technical know-how, and strengthen economic and
technical cooperation amongst member countries.
• APEC currently has 21 members
• China joined APEC in 1991
• APEC MEMBER COUNTRIES
Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan,
South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru,
Philippines, Russia, Singapore, Taiwan, Thailand, United States of America,
Vietnam

18. G- 20
• The Group finance ministers and central bank governors from 20 major
economies: 19 countries plus the European Union
• Purpose is to bring together systemically important industrialized and
developing economies to discuss key issues in the global economy
• Member Countries: Argentina, Australia, Brazil, Canada, China, France,
Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia,
South Africa, Republic of Korea, Turkey, United Kingdom, United States of
America
• A 2011 report released by the Asian Development Bank predicted that
Asian nations such as China and India would play a more important role in
the process of global economic governance reform in the future. The
report stated that the rise of emerging market economies heralded a new
world order, in which the G-20 would become the global economic
steering committee.

19. Bilateral Agreements
People's Republic of China has bilateral agreements with the following blocs,
countries, and its two special administrative regions:
 ASEAN, ASEAN–China Free Trade Area
 Chile
 Hong Kong, Mainland and Hong Kong Closer Economic Partnership
Arrangement (CEPA)
 Macau, Mainland and Macau Closer Economic Partnership
Arrangement (CEPA)
 Pakistan, China – Pakistan Free Trade Agreement
 Peru, China–Peru Free Trade Agreement
 New Zealand- New Zealand – China Free Trade Agreement
 Thailand
 Singapore
 Republic of China (Taiwan), Economic Cooperation Framework Agreement
 Costa Rica- PRC free trade agreement

20. Infrastructure
Ports
• China has more than 2,000 ports, 130 of which are open to foreign ships.
• Six of the world’s 10 largest container ports are in China with Shanghai
port as the world’s largest cargo port
Air Transport
• There are 175 major airports in China, including 45 used for both civilian
and military purposes. By 2020, that number will grow to a total of 244.
Rail
• China has the world's second largest rail network, the total track length
being at 91,000 km.
Road
• By the end of 2010, China’s highways extends 74,000 km, with the
total length of all public roads of about 3,984,000 km.

21. Infrastructure
Telecommunication
• As of June 2010, China has 306 million fixed-line subscribers and 796
million mobile customers, totalling 1.1 billion telephone users
• China has the world’s largest mobile phone population
• It had 485 million Internet users by June 2011. It is projected that China's
Internet population will be 718 million by 2013, accounting for 52.7% of
the total population.
• By 2015, China’s Internet penetration rate is expected to jump from 29%
(2010) to nearly 50%.
• Facebook, Twitter, YouTube, and Wikipedia are blocked in China under the
country's policy of Internet censorship.

22. Infrastructure
Some economic experts believe that the development
gap between China and other emerging economies such
as Brazil, Argentina and India can be attributed to a large
extent to China's early focus on ambitious infrastructure.
While China invested roughly 9% of its GDP on
infrastructure in the 1990s and 2000s, most emerging
economies invested only 2% to 5% of their GDP. This
considerable spending gap allowed the Chinese economy
to grow at near optimal conditions while many South
American economies suffered from various development
bottlenecks (poor transportation networks, aging power
grids, mediocre schools, etc.)

23. International Organization
Membership
• UN General Assembly and Security Council
• Food and Agriculture Organization of the UN
• UN Conference on Trade and Development
• World Trade Organization (WTO)
• World Intellectual Property Organization (WIPO)
• South Asian Association for Regional
Cooperation (SAARC) (observer)
• International Chamber of Commerce (ICC)
• International Bank for Reconstruction and
Development (IBRD)
• International Monetary Fund

24. Famous MNEs in China

25. Famous MNEs in China

26. MAJOR MNE’S ORIGINATING FROM
CHINA
Telecommunications equipment and Networking and telecommunications
systems manufacturing company equipment and services company
World's second largest PC maker Consumer electronics and home
appliances company

27. SWOT analysis of China
Strengths Weakness
 Inexpensive labor  Inequality in rural & urban areas
 Educated workforce and scale  Surplus labor leads to unemployment
 Plenty of natural resources  Corruption in developing country
 Accelerated economic growth  Political risk
Opportunities Threats
 Streamlining government processes  Chinese government could hurt growth
 Ease of regulations  High dependence on trade
 Cooperation with India  Aging population
 More mergers & strategic alliances  Allegations of currency manipulation

28. Porter's Diamond for China
Firm, Strategy,
Structure, Rivalry
Demand for Factor Conditions
better quality Location, skilled
products in large human resource,
quantity natural resources
Well established
infrastructure,
power,
technological
advancement

29. Recommendations for MNE’s
 Risk associated with Intellectual Property :
Potential risk is very high & it is prescribed to be cautious while taking
your best technology to China.
 Build relationships:
The Chinese believes that prospective business partners should build
a relationship and, if successful, commercial transactions will follow.
 Finding the right partners:
Companies analyze how do change the product so that it is better
suited for manufacturing in China.
 Cultivate guanxi :
The logical development of close relationships is the Chinese concept
of guanxi, pronounced gwan shee. In a highly centralized,
bureaucratic state the use of personal contacts is the only way to get
things done

30. Recommendations for Chinese Government
 Streamlining Logistics :
China’s size make it difficult to distribute products & there is a
possibility of piracy when shipping goods.
 Mitigating disparity between rural & urban areas :
China has now attained some of the deepest disparities between
rural and urban areas in the world, with urban per capita incomes
almost three times those of rural areas.
 Reforms in political system :
After the introduction of market system, different social layers caused
by income differentials have been created. The vital thing is how can
a single party represent the interests of all those, and also to keep a
balance between the different interests groups

31. Thank You