ECONOMICS

Economic and Business Environment of China

Economic and Business Environment of China

Introduction

China Economy has been performing very well since the reforms introduced in 1978. It is important to note that Export is not only factor that had helped significant development of Chinese Economy, but investment has also significantly affected the growth and development of China. China's fixed capital formation jumped from 30% in 1980 to around 47.5% in 2010. In the last few years, vast infrastructural development has taken place. It includes development of roads, housing and factories. The development in Chinese Economy is also evident from the fact that China has been able to achieve high national savings and has sustained for a very high level.

The purpose of this report is to analyze the Economic and Business Environment of China for Entrepreneurs. The paper will try to find whether China presents great opportunities for businesses or not. This analysis will be in light with the recent development that has taken place in the recent past and the opportunities it presents for Entrepreneurs. The paper is directed for Private Firms that are willing to initiate businesses in China. The paper will help them analyze the economic conditions and performance of China and how their business can blossom in such an environment. It will also help businesses to understand the problems if there are any to run their businesses successfully.

In this paper, we will review current and past performance of Chinese Economy and how it witnessed a significant change. We will also analyze the literature on the business, and Economic opportunities of China, in order conclude whether it offers investors great return on their investment or not. It will give us an idea whether good economic conditions affect the businesses or not.

Economic Background

China presents great opportunities for investors and entrepreneurs. It has been achieving a continuous growth of double figures in the recent past. This significant development in recent times has lifted many citizens from the problem of poverty. The main factor leading to significant development in the country is attributed to the fact that the growth in the country is followed by an appropriate demand of goods and services that is aiding the development in the country.

The Chinese currency, Yuan has been appreciating, benefiting the economy. It will also create problems for countries such as America, as the trade deficit of America has been increasing due to being a major trading partner of China. The trade surplus of China declined to $20 billion in August 2010, compared with $28.7 Billion last year. The decline in the trade surplus is attributed to a significant increase in the imports of the country. The imports of the country increased to $119.2 billion. The exports continued to grow by 34% Dean, J, Fowler, G A and (Back, A, 2010).

Chinese economy is now considered one of the best around the world. Since the revolution, the economy has been witnessing an economic growth of double figures consistently. This growth is attributed mostly to the privatization of ...