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Ti tl e: Ri sk Anal ysi s of C hi na

O bj e c ti ve :

1 . To ac c e ss the ri sk of i nve stme nt and busi ne ss i n C hi na.

2 . To c al c ul ate the fac tors w hi c h c ontri bute tow ards the study of the
ri sk anal ysi s l i ke

a. Pol i ti c al Anal ysi s

b. Ec onomi c Anal ysi s

c . B O P Anal ysi s

d. Ri sk Anal ysi s

e . Stre ngt hs and We ak ne sse s

C ase De sc ri pti on:

a) O ffi c i al l y C hi na i s c all e d as the Pe opl e ’ s Re publ i c of C hi na

b) Total Popul ati on of 1 30 C rore s and total are a of 9. 6 mi l l i on sq


k i l ome te rs

c ) 7 5% of popul a ti on c row de d i nto 15 % of the N ati on’ s Te rri tory

d) O i l re sourc e s are hi gh. N atural re sourc e s are une xpl oi te d due to l ac k


of c api tal and te c hnol ogy

e ) C hi na e nj oys MF N (Most Pre fe rre d N ati on) status w i th USA

f) C hi na ac c ounts for 1 3. 2 % of all the manufac turi n g goods and i s


c al l e d the ‘F ac tory of the w orl d’

g) Gre at de al of mone y c i rc ul ate s outsi de the bank i ng syste m

h) Shorta ge of stapl e goods l ik e sal t due to spe c ul ati on and c orrupti on

i) Ene rgy produc ti o n i s a pe rsi ste nt probl e m

j) C omme rc i al i zati on of food grai ns produc ti o n i s ye t to tak e pl ac e .

k ) Soi l fe rti li ty is de c l i ni ng and c ul ti vate d l and i s shri nk i ng

l) C hi na ope ne d up i ts ec onomy i n 1 97 8

m) Ave rage annu al grow th rate i s 8 %

n) Exports are more than i mports

o) F orei gn de bt i s 1 3. 1 % of GDP

Anal ysi s:

a. Pol i ti c al Anal ysi s: C hi na has be e n a c ommuni st state for de c ade s.


C hi na i s sl ow l y be c omi ng a c api tal i st i n i ts e c onomi c syste m. C hi na
re ce ntl y re l e ase d offi c i al state me nt on i ts pol i ti c al struc ture be i ng
de moc rati c . C hi ne se gove rnme nt i s alw ays all e ge d that i s a
c ommu ni st/ Soc i al i st i n C hi na and aggre ssi ve l y C api tal i sti c outsi de
C hi na

b. Ec onomi c Anal ysi s:

1 . F rom 1 97 8, C hi na has move d to a mark e t orie nte d syste m


from a sovi e t style e c onomy. Ec onomi c i nfl ue nc e of non- state
organi z ati ons and i ndi vi dual ci ti ze ns has be e n ste adi l y
i nc re asi ng. GDP has quadru pl e d si nc e 1 97 8.

2 . C hi na i s c onsi de re d the se c ond l arge st e c onomy afte r the US


i n PPP (Purc hase Pow e r Pari ty). I n Pe r c api ta te rms i s sti l l a
poor c ountry. Agri c ul ture and I ndustry poste d maj or gai ns.

3 . I nfrastruc t ure and re l ate d spe ndi ng has bee n ste adi l y
i nc re asi ng. B ut C hi na has be e n gradu al l y i nc re asi ng the
pol l uti on of natural re sourc e s

4 . C hi na ac ce ss w i th the W orl d Trade Organi z ati ons he l ps


stre ngthe n i ts grow th rate s. GDP stand s at $ 7 .2 62 Tri l li on.
C hi ne se Yuan i s pe gge d agai nst the US $ at 8. 07 0 9 / US $ .
Thi s has ai de d huge exports to the US from C hi na.

C onc l usi on:

C hi na has a ve ry stabl e grow th rate and c he ap, qual i ty l abour.


Pol i ti c al syste m and e c onomi c c ondi ti ons are ai di ng tow ards the i nve stme nts.
I ts gre ate r i nte grati on i nto the W TO has be e n c onduc i ve . As suc h C hi na is a
gre at mark e t for i nve stme nt.

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