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Economic Analysis Country Note Book

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The People's Republic of China (PRC) is the world's second largest economy by nominal GDP and by purchasing power parity after theUnited States. It is the world's fastest-growing major economy, with growth rates averaging 10% over the past 30 years. China is also the largest exporter and second largest importer of goods in the world. On a per capita income basis, China ranked 90th by nominal GDP and 91st by GDP (PPP) in 2011, according to the International Monetary Fund (IMF). The provinces in the coastal regions of China tend to be more industrialized, while regions in the hinterland are less developed. As China's economic importance has grown, so has attention to the structure and health of the economy. As the Chinese economy is internationalized, so does the standardized economic forecast officially launched in China by Purchasing Managers Index in 2005. Most economic growth of China is created from Special Economic Zones of the People's Republic of China. The construction of the road system of Beijing–Shanghai Expressway was completed and opened to public usage in early 2000 for access of transportation on logistics, travel and tourism around the most populous and densely economic active areas of Chinese Mainland II. Population A. Total
The demographics of the People's Republic of China are identified by a large population with a relatively small youth division, which is partially a result of the China's one-child policy.
Nowadays, China's population is over 1.3 billion, the largest of any country in the world. According to the 2010 census, 91.51% of the population was of the Han Chinese, and 8.49% were minorities. China's population growth rate is only 0.47%, ranking 156th in the world. China conducted its sixth national population census on 1 November 2010 1. Growth rates: 0.44% (2014 est.) 2. Birthrates: 12.17 births/1,000 population (2014 est.) 3. Life expectancy at birth: * total population: 75.15 years * male: 73.09 years * female: 77.43 years (2014 est.) 4. Infant mortality rate: * total: 14.79 deaths/1,000 live births * male: 14.93 deaths/1,000 live births * female: 14.63 deaths/1,000 live births (2014 est.)

B. Distribution of population 1. Population: 1,355,692,576 (July 2014 est.) 2. Age structure * 0-14 years: 17.1% (male 124,340,516/ female 107,287,324) * 15-24 years: 14.7% (male 105,763,058/ female 93,903,845) * 25-54 years: 47.2% (male 327,130,324/ female 313,029,536) * 55-64 years: 11.3% (male 77,751,100/ female 75,737,968) * 65 years and over: 9.6% (male 62,646,075/ female 68,102,830) (20114 est.) 3. Sex ratio * At birth: 1.11 male(s)/female * 0-14 years: 1.16 male(s)/female * 15-24 years: 1.13 male(s)/female * 25-54 years: 1.05 male(s)/female * 55-64 years: 0.92 male(s)/female * 65 years and over: 1.06 male(s)/female 4. Geographic areas * Urban population: 50.6% of total population(2011) * Rate of urbanization: 2.85% annual rate of change (2010-25 est.) * Mainland only: 1,338,612,968 (2009) * Hong Kong: 7,055,071 (2009) * Macau: 559,846 (2009) * Total: 1,346,227,885 (2009) 5. Religious affiliation * Predominantly: Buddhism, Taoism, Confucianism, Ethnic minority religions and Ancestral worship. * Others: Christianity (3% – 4%), Islam (1.5%), others. * Note: State atheism, but traditionally pragmatic and eclectic.

6. Major cities
Main article: List of cities in China
Only urban population stated (over 1 million people at least), as of 2005: 1. Shanghai 10,030,800 2. Beijing 7,699,300 3. Suzhou 6,521,300 4. Tianjin 4,933,100 5. Guangzhou 4,653,100

7. Migration rates and patterns
Internal migration within the People's Republic of China. In 2011 a total of 252.78 million migrant workers (an increase of 4.4% compared to 2010) existed in China. Out of these, migrant workers who left their hometown and worked in other provinces accounted for 158.63 million (an increase of 3.4% compared to 2010) and migrant workers who worked within their home provinces reached 94.15 million (an increase of 5.9% compared to 2010). Estimations are that Chinese cities will face an influx of another 243 million migrants by 2025, taking the urban population up to nearly 1 billion people. In the medium and large cities, about half the population will be migrants, which is almost three times the current level.
China's government influences the pattern of urbanization through the Hukou permanent residence registration system, land-sale policies, infrastructure investment and the incentives offered to local government officials. The other factors influencing migration of people from rural provincial areas to large cities are employment, education, business opportunities and higher standard of living. 8. Ethnic groups
Han Chinese 91.6%, Zhuang 1.3%, other (includes Hui, Manchu, Uighur, Miao, Yi, Tujia, Tibetan, Mongol, Dong, Buyei, Yao, Bai, Korean, Hani, Li, Kazakh, Dai and other nationalities) 7.1%

III. Economic statistics and activity A. Gross national product (GNP or GDP) 1. Total
In the fourth quarter of 2012, the Chinese economy expanded by 7.9 percent year-on-year and by 2.0 percent quarter-on-quarter, according to a report by the National bureau of Statistics of China.
According to preliminary accounting, the GDP of China was 51,932.2 billion yuan in 2012, a year-on-year increase of 7.8 percent at comparable prices. Specifically, the year-on-year growth of the first quarter was 8.1 percent, 7.6 percent for the second quarter, 7.4 percent for the third quarter and 7.9 percent for the fourth quarter. The gross domestic product of the fourth quarter of 2012 went up by 2 percent on a quarterly basis.

2. Rate of growth (real GNP or GDP)
According to preliminary accounting, the GDP of China was 51,932.2 billion yuan in 2012, a year-on-year increase of 7.8 percent at comparable prices. Specifically, the year-on-year growth of the first quarter was 8.1 percent, 7.6 percent for the second quarter, 7.4 percent for the third quarter and 7.9 percent for the fourth quarter. The gross domestic product of the fourth quarter of 2012 went up by 2 percent on a quarterly basis.

B. Personal income per capita
The average disposable income of urban Chinese households rose to around $3,000 per capita in 2010, according to an analysis of official government statistics by China Market Research Group.

C. Average family income
That means a typical family of three earns around $9,000 a year.

D. Distribution of wealth
China has long been criticized for its incredibly uneven distribution of wealth, and despite the consistent outcries for change, it appears as if things are only getting worse.
In recent years the number of Chinese millionaires has actually grown quite a bit, with as many as 50,000 more Chinese striking it rich each year. During this same time period the number of Chinese ‘super rich’, those worth more than 10 million renminbi, has also risen considerably. The trend goes on, with over 2,000 Chinese billionaires and over 100 worth in excess of 10 billion renminbi.
As hard as it is to believe, China’s super rich are steadily growing in number while the average peasant still earns less than $5,000 US dollars per year. 1. Income classes * Urban residents’ income * Rural residents’ income 2. Proportion of the population in each class
Weak foundation for the development of the rural economy, the labor productivity is difficult to improve, the slow growth of farmers 'income, urban and rural residents' income gap has been too large. From the differences between urban and rural areas in 2010, China's urban residents per capita disposable income of
19,109.4 Yuan, per capita net income for rural residents 5919.0 Yuan, 3.23 times; Engel coefficient of urban residents was 35.7%, the Engel coefficient of rural residents was 41.1%. In the years 2005-2010, the absolute gap between urban and rural residents' income from 7238.1 yuan expanded to 13,190.4 yuan. As can be seen from Table 1 data listed, the amount of urban and rural residents' income gap is significantly increased, and the Engel coefficient of rural residents was significantly higher than the Engel coefficient of urban residents.

E. Minerals and resources
China is rich in mineral resources, and all the world’s known minerals can be found here. To date, geologists have confirmed reserves of 153 different minerals, putting China third in the world in total reserves. The reserves of the major mineral resources, such as coal, iron, copper, aluminum, stibium, molybdenum, manganese, tin, lead, zinc and mercury, are in the world’s front rank. China’s coal reserves total 1,007.1 billion tons, mainly distributed in north China, with Shanxi Province and the Inner Mongolia Autonomous Region taking the lead. China’s 46.35 billion tons of iron ore are mainly distributed in northeast, north and southwest China. The country also abounds in petroleum, natural gas, oil shale, phosphorus and sulphur.

F. Surface transportation 1. Modes
They fall into one of three basic types, depending on over what surface they travel – land (road, rail and pipelines), water (shipping).

2. Availability
a. The road transport
The road transport sector has contributed greatly to, and has also been strongly stimulated by, China’s continuing economic and social development.
Among the surface modes, road transport has seen its modal share grow over the last ten years from 45% to 60% in terms of passenger-km and from 24% to 30% in terms of freight ton-km (excluding pipelines or waterways).
From 1990 to 2006, during the period of the 8th, 9th and 10th Five-Year Plans, China completed the construction of nearly 44,000 km of high-grade tolled expressways, the main portion of which comprised the National Trunk Highway System (NTHS). During that period about 400,000 km of local and township roads were also improved. From 2000 to 2005, investment on the highway sector amounted to almost $45 billion/year, with about one third allocated to development of the NTHS.
b. The railway
Railway transport is essential to China’s economic development and social cohesion. People and goods in China move in large volumes over long distances for which well-run railways can provide a safe, low cost, energy efficient and less land intensive mode of transport. In terms of freight, China’s economy depends heavily upon coal and coke, metal ores, iron and steel, petroleum products, grain, fertilizers and other bulk products to which the technology and economics of rail transport is well suited.

3. Ports
China has more than 1,400 ports. These include both seaports and inland river ports. Twelve of them handle over 100 million tons/year: Shenzhen, Guangzhou, Zhongshan, together with Hong Kong in the Pearl River Delta region; Shanghai, Ningbo, Xiamen and Fuzhou along China’s central coast; Tianjin, Qingdao, Qinhuangdao and Dalian in the north Bohai Rim region. In 2006, there were 35,453 berths for commercial use, including 4,511 seaport berths and 30,942 inland river berths. Among these, 978 seaport berths and 225 river berths have over 10,000-tonnage capacity

G. Communication systems
1. Types
The People's Republic of China possesses a diversified communications system that links all parts of the country by Internet, telephone, telegraph, radio, and television. None of the telecommunications forms are as prevalent or as advanced as those in modern Western countries, but the system includes some of the most sophisticated technology in the world and constitutes a foundation for further development of a modern network.

2. Availability &Usage rates
China’s 2.7 million kilometers of optical fiber telecommunication cables by 2003 assisted greatly in the modernization process. China produces an increasing volume of televisions both for domestic use and export, which has helped to spread communications development. In 2001 China produced more than 46 million televisions and claimed 317 million sets in use. At the same time, there were 417 million radios in use in China, a rate of 342 per 1,000 population. However, many more are reached, especially in rural areas, via loudspeaker broadcasts of radio programs that bring transmissions to large numbers of radioless households.

In March 2012, the Ministry of Industry and Information Technology announced that China has 1.01 billion mobile phone subscribers; of these, 144 million are connected to 3G networks.[4][5][6] At the same time, the number of landline phones dropped by 828,000 within the span of two months to a total of 284.3 million.
• Telephones - main lines in use: 284.3 million (March 2012)
• Telephones - mobile cellular subscribers: 1.01 billion (March 2012)

H. Working conditions
Workers get a relatively small piece of economic pie: 53 percent in 2007, down from 61 percent in 1990 and compared with two third in the United States. Total Workforce: 795.3 million in 2006. Labor force by occupation: 24 percent industry; 35 percent agriculture; 31 percent services (2005). By 2030 40 percent of the global work force will come from China or India
Chinese workers are becoming more efficient. Labor prices increased 15 percent in 2006 and 2007 but productivity increased even more, meaning that unit labor costs had decreased.

1. Employer-employee relations
Employers routinely discriminate on the basis of height, looks, health, home province and age. Workers are routinely passed over because they are too ugly or too short or have had hepatitis in the past. A typical advertisement for a factory job reads: “1) Age 18 to 35, middle school education, 2) Good health, good quality, 3) Attentive to hygiene, willing to eat bitterness and work hard. 4) Women 1.66 meters or taller. 5) People from Jiangxi and Sichuan need not apply.
Factories often have a high turnover. Workers often quit. Companies traditionally could easily fire workers. Many workers have mobile phone and use them to exchange information about jobs. Workers that quit typically don’t give any notice when the leave. They typically ask for a couple days off, change their cell number and split. People frequently change jobs around the lunar New Year. New labors laws make it harder to fire workers.

2. Employee participation
China has traditionally had an obedient work force, which helps keep management costs low. Photographs of Chinese factories often show rows of workers with no supervisors in sight. In some work places it is not uncommon to have only 15 mangers for 5,000 workers. Working together is expressed by the Chinese proverb: Eight hermits sail the ocean with the might of each other.

3. Salaries and benefits
The average wage at a Chinese factory in 2009 was around $200 a month, 17 percent more than the year before. The average monthly of wage of China’s factory workers increased 66 percent between 2004 and 2007 to $234, about twice the rate of workers in Indonesia. High growth rated in China has allowed workers to receive double digit pay increases each year.

Work week: 42.4 hours, compared to 40.3 hours in France and 55.1 hours in South Korea. [Source: Roper Starch Worldwide, based on interviews in 2001 and 2002]
Wages are low but so too is the cost of living, On a wage of $125 a month the owner of a violin factory told the Los Angeles Times, “China is poor. Everything is cheaper. With this money they can eat well and pass their lives well.
In a survey by Pew Research Center in 2008, 60 percent of those asked said they were satisfied with their jobs and 54 percent were satisfied with their household incomes.
Many Chinese get bonuses around the time of the lunar New Year and the “golden week” around the anniversary of the 1949 Communist Revolution. Many Chinese take off from work during the three "golden weeks": 1) around May Day on May 1st, in which Chinese get three work days off; 2) around National Day on October 1st; 2) and around Spring Festival (late January or early February).
Rather than asking how many days of vacation they get, many Chinese workers ask how many days they can work: they are motivated to make money and get ahead any way they can.

I. Principal industries
The major industries in China are mining and ore processing, iron, steel, aluminum, and other metals, coal; machine building; armaments; textiles and apparel; petroleum; cement; chemicals; fertilizers; consumer products, including footwear, toys, and electronics; food processing; transportation equipment, including automobiles, rail cars and locomotives, ships, and aircraft; telecommunications equipment, commercial space launch vehicles, satellites. China is also among the world's largest producers of rice, wheat, potatoes, corn, peanuts, tea, millet, barley; commercial crops include cotton, other fibers, apples, oilseeds, pork and fish; produces variety of livestock products.

* What proportion of the GNP does each industry contribute?
Industry (including mining, manufacturing, construction, and power) contributed 46.8 percent of GDP in 2010 and occupied 27 percent of the workforce in 2007. The manufacturing sector produced 44.1 percent of GDP in 2004 and accounted for 11.3 percent of total employment in 2006. China is the world’s leading manufacturer of chemical fertilizers, cement, and steel. Prior to 1978, most output was produced by state-owned enterprises. As a result of the economic reforms that followed, there was a significant increase in production by enterprises sponsored by local governments, especially townships and villages, and, increasingly, by private entrepreneurs and foreign investors, but by 1990 the state sector accounted for about 70 percent of output. By 2002 the share in gross industrial output by state-owned and state-holding industries had decreased with the state-run enterprises themselves accounting for 46 percent of China’s industrial output.
The national economy had been characterised by a large share of industry — standing at 61.2% of total GDP in 1990 - with a smaller share of 24.4% devoted to agriculture and a much smaller service sector constituting only 14.4% of GDP.
In 2004, of the industrial added value created by all state-owned industrial enterprises and non-state industrial enterprises with annual turnover exceeding five million yuan, state-owned and state stock-holding enterprises accounted for 42.4 percent, collectively owned enterprises 5.3 percent, the rest taken up by other non-public enterprises, including enterprises with investment from outside mainland China, and individual and private enterprises.

J. Foreign investment
FDI in China, also known as RFDI (renminbi foreign direct investment), has increased considerably in the last decade, reaching $59.1 billion in the first six months of 2012, making China the largest recipient of foreign direct investment and topping the United States which had $57.4 billion of FDI.
During the global financial crisis FDI fell by over one-third in 2009 but rebounded in 2010

1. Opportunities?
In 2011, the People’s Bank of China and the Ministry of Commerce promulgated the Administrative Measures on Renminbi Settlement for Foreign Direct Investment (RMB Settlement Measures) and a Notice on Issues Concerning Cross-Border Direct Investment in RMB (Notice). According to these legislations, outbound foreign investors (including investors from Hong Kong, Macau and Taiwan) now have access to direct investment in the form of offshore-derived RMB. Further, investors can process RMB settlement directly, except for in certain special areas of securities, financial derivatives and entrusted loans. The opening of RMB FDI provides several advantages including: more currency options; exchange rate fluctuation risk avoidance; and savings on currency exchange cost.

2. Which industries? * Farming, Forestry, Animal Husbandry and Fishery Industries * Mining and Quarrying Industries * Manufacturing Industries 1. Farm Products Processing Industry * Water, environment and public facility management industry * Education

K. International trade statistics
China is expected to grow on average 8.3% in the coming years. This is relatively high compared to the average of other Asian countries and also relatively high compared to the global average of 3.7%. Because of its own economic growth and that of its main trading partners, China's exports are expected to grow 15.1% annually to US$ 4416 bn in 2017, making China the 1st largest exporter worldwide. Similarly, import demand will grow with an average of 15.8% per year to US$ 4203 bn in 2017, meaning that China will take the 1st position on the global list of largest importers. By 2017, China will mainly import office telecom & electrical equipment, ores & metals and fuels, which together account for 52% of total imports of China. Similarly, China's exports will mainly consist of office telecom & electrical equipment, textiles (including fibers, yarn and products) and other products. Together these products will represent 63% of total exports in 2017. By 2017, China will mainly import products from Hong Kong, South Korea and Japan, which together account for 34% of total imports of China. China's main export markets will be the US, Hong Kong and Japan. Together these countries will account for 41% of total exports in 2017. 1. Major exports * Total value of exports: US$2.05 trillion * Primary exports - commodities: electrical and other machinery, including data processing equipment, apparel, radio telephone handsets, textiles, integrated circuits * Primary exports partners: US (17.2 of total exports), Hong Kong (15.8 percent), Japan (7.4 percent), South Korea (4.3 percent), Germany (3.4 percent)

2. Major imports * Total value of imports: US$1.817 trillion * Primary imports - commodities: electrical and other machinery, oil and mineral fuels, optical and medical equipment, metal ores, motor vehicles * Primary imports partners: Japan (9.8 percent of total imports), South Korea (9.3 percent), US (7.3 percent), Germany (5.1 percent), Australia (4.6 percent).

3. Exchange rates a. Exchange rate policy
China’s exchange rate is being controlled by government authorities: the People’s Bank of China (PBoC: China’s central bank) manages the value of the renminbi. They do so by fixing the USD/CNY-rate on each trading day. This is the exchange rate that applies to trade flows into and out of China only. b. Current rate of exchange
Exchange Rates of Foreign Currency Notes against HKD Currency | Buy | Sell | CNY | 81.00 | 80.16 | AUD | 610.00 | 620.00 | CAD | 617.00 | 627.00 | CHF | 854.00 | 864.00 | DKK | 113.00 | 118.50 | EUR | 867.00 | 877.00 | GBP | 1,160.00 | 1,180.00 | JPY | 651.00 | 661.00 | NOK | 95.00 | 100.50 | NZD | 573.00 | 583.00 | SEK | 89.00 | 94.50 | SGD | 572.00 | 582.00 | THB | 23.20 | 24.85 | USD | 772.50 | 780.50 | IDR | 5.50 | 7.00 | INR | 11.80 | 13.30 | KRW | 68.00 | 76.00 | MOP | 94.00 | 100.00 | MYR | 210.00 | 230.00 | PHP | 16.80 | 18.50 | RUB | 10.10 | 12.60 | TWD | 24.00 | 26.00 |
Information last updated at HK Time: 2015/01/27 16:57:32 * The above exchange rates are expressed in 100 units of the foreign currency against HKD (except for JPY, IDR, KRW, which are expressed in 10,000 units of the foreign currency against HKD, while CNY is in 100 units of HKD against CNY). * The above information is for reference only. Please refer to the "Information last update at HK Time" for the time of last update.

L. Labor force 1. Size * Labor force: 797.6 million * Note: by the end of 2012, China's population at working age (15-64 years) was 1.0040 billion (2013 est.) 2. Unemployment rates * Unemployment rate: 4.1% (2013 est.) ,4.1% (2012 est.) * Note: data are for registered urban unemployment, which excludes private enterprises and migrants * Definition: This entry contains the percent of the labor force that is without jobs. Substantial underemployment might be noted.

M. Inflation rates
The inflation rate in China was recorded at 1.50 percent in December of 2014. Inflation Rate in China averaged 5.64 percent from 1986 until 2014, reaching an all time high of 28.40 percent in February of 1989 and a record low of -2.20 percent in April of 1999. Inflation Rate in China is reported by the National Bureau of Statistics of China.
IV. Developments in science and technology
Science and technology in China has developed rapidly in recent decades. The Chinese government has placed emphasis through funding, reform, and societal status on science and technology as a fundamental part of the socio-economic development of the country as well as for national prestige. China has made rapid advances in areas such as education, infrastructure, high-tech manufacturing, academic publishing, patents, and commercial applications and is now in some areas and by some measures a world leader. China is now increasingly targeting indigenous innovation and aims to reform remaining weaknesses.

A. Current technology available
In 2009 China manufactured 48.3% of the world's televisions, 49.9% of mobile phones, 60.9% of personal computers, and 75% of LCD monitors. Indigenously made electronic components have become an important source of recent growth. The Chinese software industry in 2010 had a higher than 15% share of the world's software and information service market and had been growing by an average 36% each year during the previous decade. China, with the active support of the Chinese government, is a leading pioneer in Internet of Things technology.
According to the China Internet Network Information Center there were 505 million Internet users in November 2011. 37.7% of the population were internet users. The number blog users had increased by more than 100 million during the past six months to more than 300 million. In 2012 China surpassed one billion mobile phone accounts although the number of users is likely smaller since the same person may be using multiple accounts. 100 million accounts had been added since the previous year. The number of 3G accounts nearly doubled to 144 million. The number of fixed line subscriptions declined to 284 million.
Development of advanced machine tools, such as computer numerical control machine tools, are seen as a priority and supported by the Chinese government. China is the world's leading producer and consumer of machine tools. A 2010 US government report stated that US export controls of advanced five axis machine tools were ineffectual due to the technical capabilities of Chinese and Taiwanese manufacturers.
China in 2012 produced more than one third of the developed world's apparel import but the share has been decreasing in recent years as low-technology and labor-intensive production has been moving to regions like Southeast Asia and Eastern Europe. B. Percentage of GNP invested in research and development
Between 2000 and 2008 Gross Domestic Expenditures on Research and Development (GERD) rose by an average of 22.8% annually which increased the share of GERD to GDP from 0.9% to 1.54%. China aims to increase this to 2.5% by 2020. In 2008 82.76% went to experimental development, 12.46% to applied research, and 4.78% to basic research. Business enterprises contributed 59.95% of GERD in 2000 and 73.26% in 2008. Spending by enterprises is predominantly on experimental development. China aims to increase basic research's share to 15% by 2020.
The research firm Battelle estimates that China's R&D expenditures will exceed that of the United States in 2023. Rank | Country/ region | Expenditure on R&D (billions of USD) | % of GDP | Expenditures on R&D per capital | Year | 1 | United States | 405.3 | 2.7 | 1,275.64 | 2011 | 2 | China | 337.5 | 2.08 | 248.16 | 2013 | 3 | Japan | 160.3 | 3.67 | 1,260.42 | 2011 | 4 | Germany | 69.5 | 2.3 | 861.04 | 2011 | 5 | South Korea | 65.4 | 4.36 | 1,307.90 | 2012 |
(OECD, 2014) C. Technological skills of the labor force and general population
Although there is no research giving levels of technological skill in the Chinese labor force, we can say that since the Chinese are taught a subject on technology and computing during senior secondary, they can be considered reasonably tech-savvy.

V. Channels of distribution (macro analysis)
Before the launch of economic reforms in 1978, the PRC government controlled China’s nationwide distribution channels, including the system of managed distribution centers, wholesale operations, and retail outlets. The State Planning Commission issued production requirements and allocated inventory.
As reforms progressed, the government phased out central planning for many products. China’s 2001 World Trade Organization (WTO) entry brought more foreign competition, which led to the elimination of many local distribution points and the centralization of main provincial hubs. These changes allowed for greater privatization of distribution at a local level. In 2004, China issued rules that opened distribution to foreign investment and, among other things, allowed foreign distribution companies to apply for national wholesale licenses. Today, foreign enterprises may participate in joint-venture distribution operations for most wholesale operations.
A. Retailers
China’s retail market is highly fragmented and composed of many small and medium-sized retailers, unlike in the United States, where big-box retailers dominate. In 2008, China was home to about 549,000 retail enterprises, each with an average of 15 employees. Though the number of chain stores has been growing in recent years, cross-provincial retailers are still rare in China, in part because of local market access barriers.
B. Wholesale middlemen
Prior to 1992, foreign retailers were prohibited from setting up joint ventures or wholly-owned subsidiaries for wholesale or retail trade in China. Loosening its tights regulations somewhat, in July 1992, the state council permitted foreign investment in retailing on a trial basis in Beijing, Shanghai, Tianjin, Guangzhou, Dalian, Qingdao, as well as the five Special economic zones (Shenzhen, Zhuhai, Shantou, Xiamen, and Hainan). By 1997, about two dozen foreign invested stores in China had been approved by the central government to conduct business. However, hundreds of foreign invested retailing as well as wholesaling enterprises had already established themselves in Chinese cities, having sought approval from the provincial or municipal authorities.
C. Import/ export agents
For small and medium sized companies, the best way to enter China market is through a reputable or well-known agent or distributor. These companies are located regionally and typically have large sales network. Thus they will be able to have a better understanding of the China’s market and can provide assistance in developing distribution strategies in China and region. In this way, new products can be launched easier into the market and distribution network can be set up rapidly without any problems dealing with distribution rights and licensing. D. Warehousing
From 2005, more warehouses being built even under strict policy control. Warehouses better equipped with more multi-staking frames, 70% increase in forklift and more specialized tank warehouses, liquid storage facilities and DG cargo facilities. In China, the concepts of warehouse and distribution center are not clearly defined. Old style warehouse are designed for the only function of storage and almost 10-15 years undeveloped comparing with international standard. Nowadays, the supply for traditional warehouse is in excess. However, there is a shortage of distributional center. Traditional warehouse located downtown need to be relocated, re-build in city suburb.
VI. Media
The Media of the People's Republic of China (alternatively Media of China, Chinese Media) consists primarily of television, newspapers, radio, and magazines. Since 2000, the Internet has also emerged as an important communications media which is under the supervision of Chinese republic. A. Availability of media
Despite heavy government monitoring, however, the Mainland Chinese media has become an increasingly commercial market, with growing competition, diversified content, and an increase in investigative reporting. Areas such as sports, finance, and an increasingly lucrative entertainment industry face little regulation from the government. Media controls were most relaxed during the 1980s under Deng Xiaoping, until they were tightened in the aftermath of the 1989 Tiananmen Square Protests. They were relaxed again under Jiang Zem in in the late 1990s, but the growing influence of the Internet and its potential to encourage dissent led to heavier regulations again under the government of Hu Jintao. Reporters Without Borders consistently ranks China very poorly on media freedoms in their annual releases of the Press Freedom Index, labeling the Chinese government as having "the sorry distinction of leading the world in repression of the Internet". For 2010, China ranked 168 out of 178 nations.

B. Costs 1. Television
In 1978, the PRC had less than one television receiver per 100 people, and fewer than ten million Chinese had access to a television set. According to a World Bank report in 2003, there are about 35 TVs for every 100 people. Roughly a billion Chinese have access to television. Similarly, in 1965 there were 12 television and 93 radio stations in mainland China; today there are approximately 700 conventional television stations—plus about 3,000 cable channels—and 1,000 radio stations.
Television broadcasting is controlled by China Central Television (CCTV), which, with its 22 program channels, is the country's only national network. CCTV, which employs about 10,000 people and has an annual income of ¥1.12 billion yuan a year (2012,=$177 million U.S. dollars), falls under the dual supervision of the Propaganda Department, responsible ultimately for media content, and the State Administration of Radio, Film, and Television, which oversees operations. A Vice Minister in the latter ministry serves as chairman of CCTV. The network's principal directors and other officers are appointed by the State. So are the top officials at local conventional television stations in mainland China—nearly all of which are restricted to broadcasting within their own province or municipality—that receive CCTV broadcasts.
CCTV produces its own news broadcasts three times a day and is the country's most powerful and prolific television program producer. It also has a monopoly on purchases of programming from overseas. All local stations are required to carry CCTV's 7 pm main news broadcast; an internal CCTV survey indicates that nearly 500 million people countrywide regularly watch this program.
Even if CCTV is the most powerful network of mainland China, it has only about 30% of audience share all over the national territory. The fact shows how the Chinese viewers are biased in favor of local TV programs, that are more likely to represent the differences of an audience that is the largest in the world, more than the national or even international programs, which can hardly attend the needs of such a wide public.
Since September 1, 2006, the Chinese government has banned foreign-produced animation between the hours of 5:00 to 8:00 pm on state-run television to protect struggling Chinese animation studios affected by the popularity of such cartoons. 2. Internet
Widening Chinese use of the Internet is also undercutting government efforts to control the flow of information. According to CNNIC's 22nd Statistical Survey Report on the Internet Development in China, more than 250 million people in mainland China now have Internet access.
Since the beginning of 1996, the State has suspended all new applications from Internet service providers seeking to commence operations in the PRC; moved to put all existing Internet services under the jurisdiction of the Ministry of Posts and Telecommunications, the Ministry of Electronics Industry, and the State Education Commission; and attempted—without much success—to establish firewalls, limit the contents of home pages, and block access to certain Internet sites through routing filters. Although much of the Internet access in China is subjugate to the so-called "Great Firewall of China", which blacklists certain websites and even blocks chat sessions, it has proven relatively ineffective: there are logistical problems with a firewall over such a large network, and in most instances its effects can be negated with a simple proxy. Government officials are worried that, as the number of Chinese homes with telephone lines grows from the present level of less than 4%, the State will become totally unable to monitor Internet access at residences. C. Agency assistance
Chinese advertising networks- Baidu Union
Chinese advertising networks- alimama
Chinese advertising networks- Google adsense
Chinese affiliate program- Dangdang
Chinese affiliate program- Linktech

VII. Executive summary
Since initiating market reforms in 1978, China has shifted from a centrally planned to a market based economy and experienced rapid economic and social development. GDP growth averaging about 10 percent a year has lifted more than 500 million people out of poverty. All Millennium Development Goals have been reached or are within reach.
With a population of 1.3 billion, China recently became the second largest economy and is increasingly playing an important and influential role in the global economy.
Yet China remains a developing country (its per capita income is still a fraction of that in advanced countries and its market reforms are incomplete. Official data shows that about 98.99 million people still lived below the national poverty line of RMB 2,300 per year at the end of 2012. With the second largest number of poor in the world after India, poverty reduction remains a fundamental challenge.
Rapid economic ascendance has brought on many challenges as well, including high inequality; rapid urbanization; challenges to environmental sustainability; and external imbalances. China also faces demographic pressures related to an aging population and the internal migration of labor.
Significant policy adjustments are required in order for China’s growth to be sustainable. Experience shows that transitioning from middle-income to high-income status can be more difficult than moving up from low to middle income.
China’s 12th Five-Year Plan (2011-2015) forcefully addresses these issues. It highlights the development of services and measures to address environmental and social imbalances, setting targets to reduce pollution, to increase energy efficiency, to improve access to education and healthcare, and to expand social protection. Its annual growth target of 7 percent signals the intention to focus on quality of life, rather than pace of growth.
VIII. Sources of information 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.…...

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