Doing Business in Asia - Assignment Example

It has consistently posted an average of 10% economic growth since Deng Xiaoping assumed power in 1978. In 2012, China’s posted an impressive GDP of approximately $ 12.61 trillion, translating to $ 9,300 per capita GDP. The literacy level stands emphatically at an impressive 97.1%, and the poverty level has dropped significantly to about 10% of the population. According to Austrade, China is Australia’s leading trading partner with approximately 30% of Australian exports going to China. The story of China is one that is laced with amazing achievement and accomplishment, yet dogged by inherent systematic weaknesses.

1. History & political Environment

These figures may puzzle per se. However, this was long overdue. China has for a long time been a sleeping economic giant. Since time immemorial, it has always led the way as far as civilization is concerned; outpacing the rest of the world especially in the fields of science and arts. However, a horde of factors such as famines, foreign occupation, and military defeats, civil wars, and unrest always inhibited PRC from fully realizing its full potential. Politically, it was a country under civil war and controlled by warlords.  It experienced a chaotic century where it witnessed at least four radically different political systems: Imperialism, republicanism, warlordism, and communism.

This was until 1949 when the legendary Mao Zedong established PRC as a communist state following the surrender of Japan in World War II and subsequent defeat of nationalist Kuomintang forces during the Chinese civil war.  It was established as a communist state ruled by the Chinese Communist Party (CCP) with Beijing being the capital. Since then, PRC has witnessed various defining events and changes in the economic and political climate, industry and policy factors, which has thrust China above regional and international competitors that were far above it such as Japan. It has transited from a controlled economy to a free market. Though it opened its doors to foreign investors in the late 1970s, it has maintained several obstacles that have discouraged foreign investors through a series of protectionist tendencies. This was until its entry into the WTO. Since then, China has adopted a series of steps designed to eliminate trade barriers and non-discrimination, in line with the rules of WTO.

The story of China through offering an alluring platform complete with a competitive advantage, the platform on the other hand rests on a high-risk operating environment that has frustrated many business enterprises in their quest to break even (Lieberthal et al, 2004, p.4). Questions arise, what has given China this thrust that lacked from other countries emerging from the same political and economic woes? Well, a variety of factors give China a competitive advantage as compared to other traditional, regional, and international rivals; strategic geographical location, the massive endowment of resources, diverse climate, and a huge population, make china a choice for investors.

2. Geography

PRC is located in Eastern Asia, at coordinates 35 00 N, 105 00 E, occupying a total area of 9,596,961 square kilometers, making China the fourth largest country in the world. It shares borders with more than 14 countries, with a borderline extending to a total of 22,117 kilometers.