Question

analyze the economic health and productivity of China. You will need to gather data and then analyze the data and supply a recommendation as to whether your fictional boss should open a business in this country. Begin by gathering economic data, a list of where to start is below (these are only some, you should think of other data points that will aid your analysis:

GDP

Population

Inflation rate

Unemployment rate

Worker productivity (there are a number of calculations for this)

Exchange rate

Total debt – government and individual

Government deficits

Mean or median population age

Labour force participation rate

Exports

Imports

Once you have gathered sufficient data please analyze that data to determine if this country would be a good country to open a business in.

This paper should be 2-3 pages long and use proper APA citations.

Answer 1

China, formally the People's Republic of China (PRC), is a country in East Asia. China is the world's most populated country, with a population of around 1.4 billion in 2019. Covering nearly 9.6 million square kilometers (3.7 million mi²), it is the world's third or fourth largest country by area.

China is the largest economy in the world from 2014, the world's second-largest economy by nominal GDP since 2010. China's economy has been the world's fastest-growing major economy since the introduction of economic reforms in 1978, with annual growth rates consistently above 10%. Conferring to the World Bank, China's GDP grew from $150 billion in 1978 to $12.24 trillion by 2017. China logged the fastest rise in GDP per capita in the world from 1960 to 2018. China has become the world's largest exporter and second-largest importer of goods. China grasps 17.7% of the world's total wealth, the second largest share held by any country. China has the world's largest banking segment, with assets of $40 trillion and the world's top 4 largest banks all being in China. China has the maximum number of rich people in the world's top 10% of wealth since 2019 and has the most billionaires of any country in the world. China is a acknowledged nuclear weapons state and has the world's largest standing army, the People's Liberation Army, and the second-largest defense budget. China is a permanent member of the United Nations Security Council since replacing the ROC in 1971. One of the world's leading infrastructural giants, China has the world's largest bullet train network, the most tall skyscrapers in the world, and introduced the largest transcontinental infrastructure investment project in modern history. China has been recognized as an emerging superpower, mainly because of its large economy, fast infrastructural development, and powerful military.

GDP

Gross Domestic Product (GDP) is the economic value of all finished goods and services made within a country during a specific period.

Conferring to the IMF, on basis on per capita income, China ranked 73rd by GDP per capita in 2019. China's GDP was $14.3 trillion (99 trillion Yuan) in 2019. The country has natural resources with a projected worth of $23 trillion, 90% of which are coal and rare earth metals. China also has the world's largest total banking segment assets of around $40 trillion (268.76 trillion CNY) with $27.39 trillion in total deposits. China has the fourth-largest inward foreign direct investment, and the eleventh-largest outward foreign direct investment. Since China began to open up and changed its economy in 1978, GDP growth has averaged almost 10 percent a year, and more than 850 million people have been lifted out of poverty.

Population

The demographics of China validate a large population with a relatively small youth component, partially a result of China's one-child policy. The population of China reached 1 billion in 1982.

As of November 2019, China's population risied at 1.394 billion, the largest of any country in the world. China's population growth rate is 0.59%, ranking 159th in the world. China piloted its sixth national population census on 1 November 2010.

Inflation Rate

Inflation is the rate at which the overall level of prices for goods and services is rising and, subsequently, the purchasing power of currency is falling.

China's annual inflation rate lessened to 2.4 percent in August 2020 from 2.7 percent in the previous month and in line with market expectations. This was the lowest figure since May as food inflation slowed (11.2 percent vs 13.2 percent in July).

China inflation rate for 2019 was 2.90%, a 0.82% increase from 2018

Unemployment rate

China’s official unemployment rate is usually stable, soaring around 4-5% for decades. Until lately, Beijing determined unemployment by the number of urban workers who registered for unemployment benefits with local governments.

Rendering to China's National Bureau of Statistics, unemployment for March stood at 5.9%, not far from the 5.2% it had registered in December 2019.

Worker productivity

China’s labour productivity has moved from 15% of the world frontier to 30% over the past two periods, according to the IMF.

China's Labour Productivity dropped by 6.27 % YoY in Dec 2019, compared with a growth of 6.82 % in the previous year.

LPI is gathered by dividing a real output index by a labour input index. It shows how competently labour input is used for generating real output. The real output index is gathered based on the chain volume measures of GDP.

Exchange rate

China does not have a floating exchange rate that is characterised by market forces, as is the case with maximum advanced economies. Alternatively it pegs its currency, the yuan (or renminbi), to the U.S. dollar. The yuan was pegged to the greenback at 8.28 to the dollar for more than a decade starting in 1990. Currently, 1 Chinese Yuan equals 0.15 United States Dollar

Total debt – government and individual

The national debt or government debt of the People's Republic of China is the total amount of money owed by the government and all state organizations and government branches of China. As of May 2020, it stands at about CN¥ 39 trillion (US$ 5.48 trillion), equivalent to about 48.4% of GDP. Standard & Poor's Global Ratings has stated Chinese local governments may have an additional CN¥40 trillion ($5.8 trillion) in off-balance sheet debt. The high debt level is a current economic concern facing China.^[

Government deficits

China recorded a Government Budget deficit equal to 2.80 percent of the country's Gross Domestic Product in 2019.

Mean or median population age

The mean or median age is the age that divides a population into two numerically equal groups; that is, half the people are younger than this age and half are older. It is a single index that summarizes the age distribution of a population.

The median age in China is 38.4 years.

Labour force participation rate

Labor force participation rate for ages 15-24 is the proportion of the population ages 15-24 that is economically active, all people who supply labor for the production of goods and services during a specified period.

China labor force participation rate for 2019 was 45.15%, a 0.3% decline from 2018.

Exports

Chinese exports have been enhanced by record shipments of medical supplies and robust demand for electronic products.

Exports from China ascended 9.5 percent year-on-year to USD 235.3 billion in August of 2020, above market forecasts of a 7.1 percent growth and after a 7.2 percent rise a month earlier. This marked the third straight month of increase in overseas sales and the fastest rate since March of 2019, amid further improvement in global demand as more countries lifted coronavirus-led restrictions.

Imports

Imports to China surprisingly fell by 2.1 percent year-on-year to USD 176.3 billion in August of 2020, missing market expectations of a 0.1 percent gain and following a 1.4 percent drop a month earlier. This was the second straight drop in imports, due to weak domestic consumption. Compared to the previous month, imports fell for major commodities including crude oil, iron ore and soybeans.

Definitely, China would be a good country to open a business in.

In 1978, after years of state control of all productive assets, the government of China embarked on a major program of economic reform. In an effort to awaken a dormant economic giant, it encouraged the formation of rural enterprises and private businesses, liberalized foreign trade and investment, relaxed state control over some prices, and invested in industrial production and the education of its workforce.

China's strong productivity growth, spurred by the 1978 market-oriented reforms, is the leading cause of China's unprecedented economic performance. Despite significant obstacles relating to the measurement of economic variables in China, these findings hold up after various tests for robustness.

China is the world’s largest factory hub and most of the merchandises all over the world come from China. In 2017, the merchandises imported from China to US alone is worth of 500 Billions US Dollars.

China is the most populous country in the world with over 100 cities with more than one million inhabitants in each.   China is ranked 28 out of 138countriues according to market size, business sophistication, innovation and financial development.

The support of the Chinese government is rather extensive, from incubators to subsidies, and a lot of supportive measures to facilitate entrepreneurship and innovation. However, there is much more that makes China a great place for entrepreneurs, including foreign entrepreneurs.

The wide availability of money in the market, especially venture capital and private equity. In particular, Chinese private risk capital has started to mature and professionalize in the last five years.

The Chinese market is large and growing. This means that entrepreneurs have possibilities to scale their business. It is a very particular advantage that the Chinese market has; business has room to grow more than in many other countries.

The policy and regulation is still changing and upgrading, which may mean new opportunities. Industries like internet finance, digital health and cross border e-commerce, are not fully regulated yet. So it is a good living laboratory for entrepreneurs to try out their business ideas. At the same time, when businesses grow up and industries mature, a better regulated environment in terms of consistency and clarity is desired.

Lastly, China’s environment for entrepreneurship is quite facilitative of building business ecosystems and external partnerships with stakeholders. . It is relatively easy for entrepreneurs to find other partners, resources and investors; especially in cities like Shanghai, Beijing, Shenzhen and Hangzhou.