Car Financing in China

3032 Words Jun 26th, 2005 13 Pages

China and its economy
Capital : Beijing
Population : 1.3 billion
Area : 9.6 million sq km
Currency : Yuan Ren Min Bi
GNP : $4 Trillion (2001)
GDP : PPP $7.262 trillion (2004 est.)
Per Capita : $5,600 (2004 est.)
Form : People 's Republic
Official Languages : Chinese (Mandarin)
Growth Rate in Real GDP :
1999 7.1%
2000 8.0%
2001 7.3%
2002 8.0%
2003 8.4%
2004 9.1%
Inflation rate (consumer prices): 4.1% (2004 est.)

Located in South East Asia, China is home to 1.3 billion people and constitutes 22% of the world 's population. Stringent rules of the Marxist policies, an autocratic socialist system, left China a conservative, under-developed nation for most part until refurbishment of economic and trade
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According to its WTO commitments it has to be noted that China may further reduce tariff levels to about 10% by end of 2005.
Foreign Direct Investment
The Chinese government 's recognition of its two major attractions of low-cost labour and an enormous domestic market of 1.2 billion consumers has further propelled its initiatives toward economic reform such as opening up of markets and reducing tariff levels. As a result, foreign investment has intensified.
In the 1980s, foreign investors were restricted to export-oriented joint ventures with Chinese firms. In the early 1990s, they were allowed to manufacture goods for sale in the domestic Chinese market; and by the mid-1990s, the establishment of wholly foreign-owned enterprises was permitted. China 's accession to the WTO, however, forces the government to open up the services sector as well. China 's FDI inflows are in the tune of $53.5 billion and primarily capital-intensive, which means foreign companies are actually setting up industries in collaboration with Chinese companies to manufacture commodities at lower prices.
FDI in a developing economy means the development of the entire national economy on a grand scale, benefiting several other support industries, development of the country 's infrastructure, raising standards of living and increasing per capita income. World-leading manufacturers on
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