Term Paper on "Chinese Economy"

Term Paper 4 pages (1160 words) Sources: 0

[EXCERPT] . . . .

Chinese Economy

Strengths and Weaknesses of the Chinese Economy

The intent of this paper is to present the strengths and weaknesses of the Chinese economy. This specific global economy continues to outpace all other economies in terms of global economic growth, regularly posting above average GNP and GDP growth.

Strengths including the nation's manufacturing base, the rapidly growing adoption of software to streamline and make more efficient the manufacturing process, and the role of Guanxi, or trust-based trading relationships. Weaknesses include a political climate in China for outside business that is fraught with risk, a wide variation in Intellectual Property law interpretations, and the fact that cultural barriers to the continued globalization of the economy continue to be significant.

Global Manufacturing Expertise

As China has become the global leader in manufacturing, this area of the economy is achieving impressive growth quarter-over-quarter and year-over-year. After more than 20 years of development, Chinese influence has already altered the manufacturing world, and China will keep on playing an increasingly important role in the global supply chain. A changing China also reflects the transformation of its internal economic structure -- from the plan of the central government to the market-oriented economy. During this time, one of the most important revolutions in China is the co-existence of different forms of companies.

There are four types of companies in China: State-Owned Enterprises (SOE); Joint Venture (JV); Wholly Foreign Owned Enterprise (WFOE); and Private Company. Before the opening of China to international trade, almost every company was a State-Owned Enterprise (SOE). From giants in the Oil and Gas industry employing hundreds of thousands of employees to retail outlets with four employees, everything was under government control. There were a handful of private firms at that time, primarily small, family-run businesses. The introduction of a new type of company to China was driven by foreign direct investment. In the early 1980s, the first batch of western manufacturers entered China through a partnership with local Chinese companies, setting up a Joint Venture (JV). The Chinese offered a place to set up the factory while investors brought in capital for the facilities and advanced technologies for manufacturing. At that time, Chinese companies had to hold at least a 51% share of the JV, but top managers were always from the west. As the fruits of JVs were recognized by the government, the tight regulations on them gradually loosened.

Times have changed. Foreign companies are now allowed to own a majority of JVs in many industries. They can also set up operations in China by themselves, which has led to another type of company: the Wholly Foreign Owned Enterprise (WFOE). WFOEs allow full control by foreign investors, which means no third party can share the profits from China. With more global manufacturers using China as a base to serve their global customers, WFOEs can enable them to maximize their profits: the more shares a company owns in a JV, the more power it has. Because investors subsequently pursue more shares, numerous JVs have been turned into WFOEs. Though the Chinese economy is stimulated by foreign investment, this builds an environment where private Chinese companies can grow. However, because of fierce external competition, limited internal resources, and less favorable policies, few private firms can grow and survive for long, resulting in most private companies in the manufacturing community being small. There are very few heavyweight players in this category.

Other types of companies exist in China on a smaller basis,… READ MORE

How to Reference "Chinese Economy" Term Paper in a Bibliography

Related Term Papers:

Chinese Economic History Term Paper

Chinese Economy

Great Leap v. Gradualism: Maoist and Post-Maoist Approaches to China's Economic Growth and Development since 1949.

In the last decades China was able to maintain almost a steady… read more

Term Paper 9 pages (2985 words) Sources: 1+ Topic: Asian History / Asia

---

Chinese Economy Since Deng Xiaoping Began Essay

Chinese Economy

Since Deng Xiaoping began to open the Chinese economy is the late 1970s, there have been substantial changes in China's demographics. These changes have both helped to support… read more

Essay 7 pages (2324 words) Sources: 12 Style: MLA Topic: Child Development / Youth / Teens

---

Chinese Economy Case Study

China Economy

Examining the Current Status and Future Trajectory of China's Economy: Growth, Risks, and Response to the Financial Crisis

The recent global financial crisis and ensuing recession that is… read more

Case Study 10 pages (2931 words) Sources: 20 Topic: Economics / Finance / Banking

---

Chinese Economy Xinhua Reported That Beijing Recorded Essay

Chinese Economy

Xinhua reported that Beijing recorded 80% blue sky days in the first quarter of 2009 (Xiong, 2009). The concept of a blue sky day is unusual for most… read more

Essay 7 pages (2362 words) Sources: 12 Style: MLA Topic: Asian History / Asia

---

Chinese Society Term Paper

Chinese Society

Greatest Achievements of Chinese Society

The Chinese society has demonstrated a number of achievements since some decades ago. First is the success of the Chinese society to have… read more

Term Paper 3 pages (825 words) Sources: 1+ Topic: Asian History / Asia

---

View 100+ more related papers  >>