Pestet Analysis Of China

The Chinese government owns all the land and protection of property is decreasing. The corruption of the Chinese government continues as they reject core reforms such as disclosure of assets by officials, oversight of bodies, and lifting political restraints on citizens. To continue the problem China has a weak financial regulation, use of debt to overproduce, the culture of saving and not spending, and profound fear of innovative ideas. However, China’s use of

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China has reached a milestone in terms of achieving its centenarian goal of making China a prosperous nation once again. One of the ways that it has done this is by having steady economic growth even in the midst of an economic crisis. Not only has China’s economy grown, but its standard of living has also improved, it has achieved this by spending 70 percent of its fiscal revenue towards improving people’s standard of living. China has also pushed more anti-corruption reforms and has made efforts towards widening its economy by setting up freer trade.

The People’s Republic of China with a population 1.3 billion, is the third largest country in the world and has a land size of 960,000 square kilometres. It is a rapidly growing economy, with living standards being raised every year. However, human rights violations are still a part of daily life in some part of China and can still be seen in the present time. The most controversial issues include discrimination, right to live and not to be subject to torture, freedom of religion, opinion, to fair public hearing, rights to family and the right of movement. (The Consulate General of The People's Republic of China, 2003),(Infoplease, 2009)

The major actors involved in the Chinese challenge include the US government, the Chinese Government, US and Chinese businesses, and the American Citizens. When analyzing the hierarchy of goals for the Chinese government, it is important to note that the Chinese Communist Party is not democratically elected. Their mandate to govern has been based on China’s strong economic performance. Above all else, it is crucial for the Chinese government to maintain its economic success. 29% of China’s GDP is composed of exports of goods and services.

When Deng Xiaoping took control of China, he recognized that the economy was collapsing, and that his people were worried about class, especially how quickly the upper-class was growing, so he came up with a plan. He was going to open up the country to foreign investors, “But Deng himself undermined the process with his famous call to let ‘some get rich first’ . In practice this meant giving priority to the coast...Private enterprise

According to Samuel P Huntington, the movement and spread of democracy can be describe analogous to a wave, a description that evokes not only democracy’s power and influential effect, but also its ability to overcome and drown out any preexisting regime (Huntington, 1991). We have seen examples of democracy’s influence in countless stages throughout the twentieth century in many different parts of the world; some having previously very powerful authoritarian regimes that have switched to democracy ***. However, it is interesting to note that not all countries have succumbed to democracies principles and influence. One crucial example of a country that has not transitioned into a democratic regime is communist China. Not only has China survived maintaining their communist regime, but they have thrived, particularly in the past few decades. However, a crucial question still must be examined: what lies ahead for communist China? Currently, where almost all developed countries have made this transition to democracy, China remains a unique outlier.

Over the course of the Communist Party’s ruling history, the economy has fluctuated in its quality. From Mao Zedong’s reign (1949-1978), Chairman Mao focused on the industrialization of communes and agriculture. The economy not only remained relatively stagnant as a result, but also caused an immense famine throughout these communes. Since Mao’s death in 1976, the Communist Party has steered away from its communal form of economy and became the world’s second largest economy through capitalism. This act of change depicts how the Communist Party has influenced the People’s Republic of China’s financial system into becoming increasingly capitalistic. The People’s Republic of China had issued a multitude of economic reforms in 1978 after the death of Mao Zedong. As a result, China has risen in the ranks of the world’s economy, effectively becoming the second fastest growing economy in the world as well. All in all, the Communist Party of the People’s Republic of China has aided the Chinese economy to reach its current success.

Although China is the great weight in international affairs, the Chi faces internal pressures that make China more fragile than what is customary. The Chinese economic model, which depends on export has reached its limit and the transition to growth based on the Chinese home increases the internal differences. The unrest management through repression has become more difficult than in the past as the rapid urbanization and economic reforms and social change may disrupt turbid country with a population of 1.3 billion people.

The Chinese Communist government has complete power over the legislation, economic and cultural institutions. While western economies have governments that promote transparency for doing business, China’s Communist Party’s rules and regulations have made transparency difficult (Jayaraman, 2009). Large manufacturing companies can come under various and random regulations and bureaucracies, and the Chinese promotes a form of social networking called guanxiwang, where guanxi is the relationship between the individual and the entities of the network (Jayaraman, 2009). With the heavy amount of corruption and the lack of transparency the guanxiwang or the social network with connections with people from the communist party can help western businesses avoid red tape and bureaucracy.

A company which wants to enter into a new market must first understand the target market’s business environment and how to create and retain customers by providing better value than the competition. As the environment changes, businesses must adapt in order to maintain strategic fit between their capabilities and the marketplace. When we are analyzing the macro environment of a company we usually use the PESTE analysis to help us to clear our goal, identify all the factors which are affecting our company directly or indirectly. Such us political factors, economic factors, social factors, technological factors, environmental factors and legal factors.

In addition, China 's politics and economy have great differences with western countries because of the special national conditions, that the political power (or government) may have a prominent or even overwhelming strength relative to the economy (or business), which may have a decisive influence on economic development. First, the government-lead economy has caused excessive pursuit of economic development but neglect the quality of development (Zhou, Zhang & Shen, 2015). Second is the government 's control and allocation of resources and the dominant mode of development of the state-owned economy have caused a series of problems like the loss of economic benefits to a certain extent (Dollar, 1990). So the excessive concentration of political and administrative power caused by the low degree legalization and democratization in Chinese economy may have resulted in some obstacles in the economic development to enterprises, and this kind of rent-seeking which has political power to control economic resources and the right of examination and approval maybe one of the reasons caused China’s corruption and damaged the normal order of the market economy. In western countries, companies could hire a lobby group to lobby government in order to gain some benefits and a lot of countries such as the United States have the Federal Regulation of lobbying act that make constraint on lobbying (Hansen & Mitchell, 2000). But for enterprises in China, to develop good relations (“Guanxi”)

After the economic reforms of 1978, China gradually became the manufacturing hub of the world and its GDP catapulted from 214 billion USD and 9th in the world to almost 11 trillion and 2nd in the world in 2015 (focus economics, 2016). China’s financial system has managed to sustain this rapid economic growth for many years, mostly through the appropriate allocation of capital (Yan, 2013).

China is an emerging economy that caters number of market opportunities for foreign investment. Moreover, China has a huge potential for economic growth. It is the world’s most populous country. It shares border with fourteen countries. The rapid expansion of Chinese economy has captivated many countries to invest in this market in order to gain profit and enjoy low tax rates. China’s one of the best-known landmarks is the Great wall, one of the world’s largest manmade structures. China is the second largest energy consumer country and third largest energy provider country in the world where coal is the primary source of energy. As far as the political factors of China are concerned China is not dominated by a single or a two party system, it has a multi -party System under the leadership of CPC (communist party of China). In decision making process of the political, economic, cultural and social affairs the other parties express their concerns regarding the particular polices to be adopted but one who rule in all is CPC whose approval is the main concern. Furthermore, considering the political stability of the country, number of foreign investments has been embedded into the country’s economy making it a country, which carries a low level of risks of investments. Consequently, this immense increase in the investment ties back to the increase in political stability of the country.

In the next few years, China is saying that they are going to be investing billions of dollars into Hybrid technology. Honda is a automobile company who is well known for developing ad researching hybrid technology. They have been on the forefront of this new technology and for this reason they will be a top choice for this new hybrid technology. They will need to show the Chinese government that their technology is worth investing in. If they manage to do this, they will be bale to receive large amounts of money to use for the development of new hybrid technology.