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RISK ANALYSIS OF CHINA

RISK ANALYSIS OF CHINA

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Published by: rashmi_shantikumar on Jan 08, 2010
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06/20/2010

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