Why Should China Ease Foreign Investors

It is this that has sparked China’s vulnerability to external shocks. In 2011, China’s exports amassed almost $2 trillion, however in Feb 2012, China recorded a $31.5 billion trade deficit as a result of the European sovereign debt crisis in which China’s main trading partners plunged into recession. China’s severe BOGS decrease is an attempt to control growth and a sustained level of 7.5%. Investment policies are also critical for China to achieve economic growth and development. Foreign Direct Investment (FDI) in China is being sought primarily in the redesign of State Owned Enterprises (SOE’s) and in the development of interior provinces. Between 75-80% of World Bank loans to China in 2008 were directed to the central and western regions, the most economically disadvantaged. This promotes increased wealth within China, leading to higher levels of development due to a more positive Human Development Index (HDI), which currently sits at 0.687, up from 0.677 in 2010. Thus, trade and investment are critical factors in ensuring that China’s growth remains sustained at 7.5% whilst still encouraging increases in development.

China as an economy has change rapidly over the past few decades. It has gone from a war struck country prior 1978, in which the economy was greatly effect, to one of the largest

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

The process by which these policies are made must also change to allow for more trade and investment. With the addition of new capital and industry, and thus new stakeholders in the Chinese market, China will have to allow for more interests to be represented.

Second, in China, policy for overseas investment is considerably strict and local protectionism stubbornly exist. For example, in the early 1990s, Chinese government limit foreign investment for avoiding the intensive competition which the government afraid of out of control. Before China as a WTO member, the policy, no matter in fiscal or legal, is close restraint foreign companies. Only a few acts came out to protect foreign investors. Also, only a few regions allowed to open the door, such as Beijing, Shanghai, Tianjin, Guangzhou, Dalian, Qingdao, and the five special economic

Ever since the initiations market reforms in 1978, China has over time turned from the common central-planned economy to market based economy contributing to it experiencing rapid economic as well as social development. China’s GDP growth index averaging close to ten percent annually has promoted 500 million and above people out of abject poverty. Recent reports suggests that China has realized almost all of its Millennium Development Goals or at within realization. The state’s population has hit 1.3 billion making it the second biggest economy and is progressively playing a significant and prominent role in the world’s economy. A keen interest into China’s economy along with the political impacts on its economy will be the focus of this paper.

The significant economic growth of China happened after China adopted Economic Reform and Opening-up Policy in 1978 (see Appendix 1). Under this policy, China opened its door to the foreign investment and began to emerge in the global market. Its economic system has since then been transformed from socialist economy into a capitalist economy (Szamosszegi and Kyle, 2011, p.4; Paltiel. 2009). If the period between the founding of the People’s Republic of China in 1949 and the Reform in 1978 can be regarded as the first industrialisation process towards heavy industry monitored by central planning, then the

Within all nation-states, a political regime is imposed which attempts to protect the individual interests of that country, however, it can also have the potential to limit that countries economic development and the United States and China are no exception to this rule. This essay will discuss, analyse and contrast the distinct regimes of each nation with regard to their positive and negative aspects from the viewpoint of a potential foreign investor wishing to do business in either of these states. Each

China’s economy has been largely influenced by political activities before the 1990s. Several economic reforms had already been put in to place since 1978 but the defining change was only triggered in 1992 with the speech by Mr. Deng Xiaoping, where he affirmed the nation of their shift towards a market-oriented system (Chen, Quan, & Liu, 2013).

China’s recent rapid economic growth has astounded countries around the world, including the U.S. Domestic policies that improved incentives for economic competitiveness were one of the main reasons that China was so successful in increasing its Gross Domestic Product (GDP). “The combination of Chinese land and labor with the capital and expertise of Taiwan and Hong Kong industrialists provided a particularly important boost to exports and employment during the first decade of reform.” China attracted investments from multi-national corporations, which further contributed to China’s revival as a great trading nation.

This dramatic system of economic reform has benefited China in many ways. However, there are still a number of issues which the country needs to address if it wants to maintain long-term economic stability.

China is the most populated country in the world, and currently has the world’s fastest-growing major economy. It has allowed the country to advance into today’s modern society. The current government structure is a single-party socialist state where communism has prevailed even since 1949. One of the biggest impacts on the country and its markets has been globalisation, which has enabled China to move from a centralised economy to a market based economy. This change in the economic system allowed the GDP to increase by around 10% annually. Consequentially, more than 500 million of its population enjoys a better living standard. In this report we will focus on different aspects of the Chinese market, examining key factors

In the past China was not to able sustain its own economic well being, let alone be an economic super power. The standard of living in China was so low, that something as simple as a light bulb was a luxury (Fogel, 2006). After the Cultural Revolution and Communism set in, China’s economic luck started to change. Between the years 1978 and 1998, a mere twenty years, China’s Gross Domestic Product (GDP) has grown an average of eight percent annually. The eight percent annual GDP growth has made China one of the fastest growing economies in the world (Fogel 2006).

The government of china is very keen to encourage foreign investors, because foreign companies are regarded as relatively good corporate

China has undergone dramatic change in the past few decades. In contrast to its isolation from the international community in the 50s and 60s, China today is not only a member of virtually every international organization but even has the potential power to question and reshape the structure and norms of the institutions it has joined. No other country has undergone as total a transformation as has China during the last quarter of the twentieth century. The great change could be traced back to 1978 when Deng Xiaoping and his associates launched a reform that has changed the country in all spheres. Under Deng’s leadership, a step-by-step opening policy was introduced concurrently. The government shifted the economic strategy to emphasize the production of goods to sale abroad; five special economic zones were established as means of encouraging foreign investment; the country has joined a large number of UN-affiliated institutions that are setting the ground rules of the 21st century in respect of open trade arrangements, security partnerships, arms control regime, war against terrorism, environmental preservation, and defense of human rights (though not without conservation).