International business environment of the world's fastest developing country - China

Essay by nkmarwatUniversity, Master'sB, November 2006

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1. Introduction

This study is carried out to identify the international business environment of the world's fastest developing country - China. We will discuss China's changes in recent years, especially after the entry of WTO. These changes will be classified into four categories: political/legal, economic, social/ecological and technological. We will also analyze the imports, exports and FDI of the country through the official published statistic data.

2. International Trade Overview

Since the Open Door Policy adopted by Deng Xiaoping, China has been becoming a more important trader in the global market. Numbers of foreign groups now are setting overseas headquarters there due to the huge potential of this developing market.

2.1 Broad view based on SWOT analysis

As we know that China has played a crucial role in international trade. To provide investors with a better understanding of China's business environment, we use SWOT analysis to give a clearly illustration (table 1).


- Provide rich and various mineral deposits

- Government positive policy support

- Cheap labor cost

- Competitive advantage in clothing, consumer goods, fabric, toys, electrical machinery and switch gear

- Stable currency

- Large domestic market

- Low costs of operation, such as transportation

- Well-developed infrastructure in most cities, such as power plants, water supplies.

- The rapid development of Hi-technology industry

- Different location and climate for various kinds of business

- Most of technological know-how controlled by the investment companies

- The unbalanced development

- Communication problem, Chinese is not the world-language

- Culture varies from place to place

- Infrastructure (like transportation system) is not good enough in town or countryside

- Despite natural resources, insufficient energy supply

- The social system is different from the investors

- Over depended on foreign capital

Table 1: SWOT analysis of China

2.2 Imports...