Team

Lier

Aubrey

Neharika

Shahbaz

Poonam

China- Introduction

Located on East side of Asia

Population over 1.38 Billion (Most

populated country in the world)
{Worldometers [2016]}

Language spoken is Standard Mandarin

GDP per Capita is $15,095.00

Chinese market
environment

Macro-economic
environment

Market access
Competition

Political
environment

Bureaucracy
Governmental
challenges

Micro-economic
environment
Labour
Human resources

Cultural
environment

Consumer
preference

Foreign Direct Investment (FDI)

 High-tech sector to attract more FDI

The Chinese Government is committed to shifting from low
value-added to high value-added manufacturing, and is keen
to encourage foreign participation in this process of industrial
upgrading.
In 2014, Chinese governments at various levels issued a
number of policy guidelines to channel FDI to the high-tech
sector. The central government released policies such as
Opinions on accelerating the transformation and innovative
development of state-level economic and technological
development zones and Opinions on accelerating the
development of science and technology service, which
encourage foreign investment in advanced manufacturing
and
services.
Localhigh-tech
governments
have also updated their industrial
policies. For example, the government of Henan province
issued Opinions on accelerating the development of
industrial zones of high and new technologies, which
provides favourable treatment to foreign companies.

 Foreign Investment Law

The Ministry of Commerce released the Draft Foreign Investment
Law (the Draft Law) on 19 January 2015. The new law will
replace three existing laws related to foreign investment.
The new law will likely have a significant impact on China FDI as it
will give foreign investors easier access to the Chinese market. The
Draft Law plans to introduce the negative list management
method that requires projects on the negative list to go through
the approval procedure; projects that are not on the negative list
only need to be filed with the Chinese authorities in charge of
foreign investment.
According to the Draft Law, the status of foreign invested
companies will not be judged on ownership but on who is in
control.

 Urbanization to drive long-term FDI

growth
In March 2014, the State Council unveiled the National New-Type
Urbanization Plan (2014-2020), which is the countrys first official
urbanization plan. The central government summarized the lessons
learned from Chinas urbanization since 1978 and promised a NewType urbanization drive going forward, which will focus on the
quality of growth and the welfare of urban residents.
The government will pay close attention to the development of
technologies and industries that support the achievement of this
blueprint.
Central and Western China will likely be major beneficiaries in the
urbanization drive.

Automotive Sector of China

Chinese car production increased 7.3% year-onyear in 2014.

But total car production growth slowed to 2.6%
year-on-year in 2015, mainly due to lower
economic growth.

Opportunities

Strong GDP Growth Rate and Income Growth

Specialized electric motor manufacturing and

technology.

Government Support

Emergence of global R&D centers in china

Risk and Challenges

Network development

Brand Recognition

Market Access

Experienced staff
recruitment

Counterfeit Products

Government Challenges

Bureaucracy

GENERAL MOTORS AND ITS CHINESE

PARTNERS: ANALYSIS BASED ON THE
CAGE FRAMEWORK

Cultural Distance
GEERT HOFSTEDE CULTURAL DIMENSIONS CHINA VS. UNITED STATES

Power Distance Index High in China

and low in USA

Individualism-Low in China and high

in USA

Masculinity- Slightly lower in china

compared to USA
SOURCE:- WWW.GEERT-HOFSTEDE.COM

Uncertainty Avoidance Index both

are lower then world average

Long-Term Orientation-high in china

and low in USA

Administrative or political
distance

Corruption -High corruption in China and low

in USA.

In 2015 Transparency International ranked

China 83rd and USA 7th out of 175 countries

Risk-According to the Maplecrofts Global

Risk Portfolio china has been classified as
extermly Risky economy

Geographic distance

China ranks 4th and US 3rd in term of area

The distance between the capitals of the two

countries is about 11,000 km

China has excellent transportation

infrastructures.

China ranked 1st in communication

infrastructure

Economic distance

China is Second largest economy followed by US

China is fastest growing economy with an average

growth rate of about 10 % over last 30 years

China Largest importer and exporter of goods

Current inflation rate of china is 2.25%

As per statistics unemployment rate of china is 4.05%

Recommendation

Companies to follow market oriented strategies

Advantage of government policies

To enter into market with Local ventures

Interpersonal relation (Guanxi)

Location for manufacturing/operations

Reference
http://pure.au.dk/portal-asb-student/files/39889345/Master_Thesis_Nadezhda_Anast
asova_and_Martin_Nenovski.pdf
Accessed on 14/10/2016
http://www.transparency.org/whatwedo/publication/cpi_2015
Accessed on 13/10/2016
https://maplecroft.com/portfolio/new-analysis/2016/08/12/ accessed on 13/10/2016
http://www.marketing91.com/swot-analysis-of-automobile-industry/
Accessed on 14/10/2016
https://group.atradius.com/publications/market-monitor-automotive-china-2015.html
http://
www.kpmg.com/ES/es/Internacionalizacion-KPMG/Documents/China-Outlook-2015.pd
f
http://www.tradingeconomics.com/china/unemployment-rate