China's Foreign Trade

2305 WordsFeb 21, 20189 Pages
Since the start of reform and opening three decades ago, China's foreign trade has been growing rapidly, even faster than its GDP. Nevertheless, the macro environment nowadays is undergoing influential change, and it is questionable whether China would be able to maintain its current speed of growth. By performing a PESTEL analysis, this essay proposes that China could no longer maintain its current mode of foreign trade with heavy emphasis on labour intensive manufacturing. New areas of growth must be sought in adaption to new conditions in the macro environment in the future. 2 PESTEL Analysis Despite comprising of a great variety of industries and business models, China’s foreign trade is invariably influenced by the changes in macro environment both domestic and overseas. It would therefore be essential to conduct a PESTEL analysis to appraise the foreign trade sector as a whole, and to ascertain the opportunities and challenges for the sector in the future. 2.1 Political Analysis For the first three decades since the start of reform and opening, the Chinese political environment has generally been in favour of foreign trade. Prior to reform and opening, ideological barriers against trading with Capitalist countries and institutional barriers against free trading at all, have both impeded foreign trade. Afterwards, the overall trend has been highly favorable towards China’s foreign trade. In particular, Deng Xiaoping broke ice on both barriers with his various
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