Foreign Direct Investment in (FDI) China by opening a second filter factory in China - Assignment Example

Download file to see previous pages Both north and south parts are within the eastern-monsoon area that is separated by Qin Mountains-Huai River with nearly 95% of people in the country living in the region. The country’s geographic location and its natural environment have significantly influenced and shaped civilization in the country (Travel China guide, 2013). Economic Situation in China China is a nation with huge attraction factor for companies from all over the world interested by either its cost efficient production environment or even the huge market potential of more than 1.3 billion citizens (Hecker, 2012). China’s economy rose spectacularly since the onset of its reform in 1978 growing at an average rate of 9.9% for more than three decades and was not affected by the 1997 Asian financial crisis and recently in the global crisis of 2008 the nations remained largely unaffected, even though the crisis left many nations grieving and many having negative growth. However, China’s economic growth of 2009 remained 9% and increased to 10% in 2010 after government injection of massive stimulus package; therefore, China economy quickly bounced back in high growth and was at the forefront in global economic recovery. Before, the global financial crisis, china had transformed itself into a leading contributor of world economic growth since the nation’s contribution to world GDP growth rose from 4.6% in2003 to 14.5% in 2009. In 2010, China replaced Japan to become the world’s second largest economy with a GDP of US$7.4trillion in 2011, which was about half of US’s level, US$15 trillion. China’s purchasing power parity has for a long time been the world’s number two after USA and in 2011 china’s PPP was 70% that of US. For many years, china remained and remains to be the world’s largest exporting country with 2011 exports amounting to US$1.9 trillion that took 11% of world market share. In post-crisis world, China has managed to distinguish herself by holding the world’s largest reserves worth US$3.1 trillion and remains to be the only large economy not burdened by domestic and external debts. To get the right sense of Chinese economic production scale and the fact that the nation remains to be the world’s manufacturing powerhouse, it is worth looking at the output levels of China’s core industrial products. For instance in 2011, China was number one in the world in production of coal, steel, cement, automobile, TV and refrigerators among others (Wong, 2013). China’s economy is expected to prolong its high growth in short-term while at the same time rebalancing and restructuring and since China’s economy has already developed a wide base, further growth will produce its dynamics of sped compounded by scale. Owing to its sheer size, Chinese level of domestic production and consumption as well as its imports and exports will continue to have significant regional as well as international ramifications. Based on the massive industrializations reflected in mega output volumes, china has become global top consumer of various natural resources and essential commodities from steel, aluminium, oil and gas. Rising demand of such products in China has driven the prices of those products up, hence ...Download file to see next pagesRead More