PESTEL Analysis For Doing The Business In China
Political factor of China
For the last 68 years, CPC (Communist Party of China) is ruling China, which governs the country without any democratic negotiations. China has a strong economy which is still improving and building strong relations with another continent. Also, it has a great influence in Africa. Today, China’s political environment is stable for doing our business in the country. There are some factors which make it more stable as the CPC is the governing party so without making any democratic negotiations it impose its policies on the country. Moreover, the geopolitical influence of China is growing especially in South Asia as well as with other countries like Afghanistan, Myanmar, Kyrgyzstan, Sri Lanka, Maldives, and Nepal. China builds seaports in Pakistan, Sri Lanka and Bangladesh. Moreover, for good the relations of China and Nepal, the prime minister of Nepal visit China and they signed eight MOUs which enable the collaboration of Chinese projects in Nepal.
Also, China involved in free trade agreements. Barriers, import tariff, tariff rate quotes, currency control, labelling requirements and much more. Furthermore, the countries that want to invest their money in China pay some taxes in the country. The standard tax rate in China is about 20-25%. Any foreign country not able to invest directly in China, such as activities are done through representative office also the companies are not allowed for singing the direct contracts with local ones or doing direct businesses in the country. More than 100 countries China have investing agreements which cover expirations, Most-Favored-nation. Also, it maintains 14 free trade agreements with ASEAN, Singapore, Pakistan, New Zealand, Chile, Peru, Costa Rica, Iceland, Switzerland, Hong Kong, Macao, and Taiwan.
Economic factor of China
Economic of China is one of the strongest economies as it has huge comities and more demand which is fulfilled by low labor cost and economy of scale. The most effective and strongest pillar in the Chinese economy is the service sector. The economy of China is growing for the last three years, and the forecast was about 6. 5% in 2018. Moreover, the inflation rates in China is stable from 1986 to 2018 that is about 5. 22%. Due to the high prices of food, clothes, fuel, the consumer price inflation was rising up in 2018. According to the Chinese economic models, the inflation rate is projected about 2. 6% in 2020. The interest rate is forecast up to 5. 5% in 2020. Our company is going to sell honey in China. Also, China is expanding their market for foreign countries so the policies of doing business will be helpful for our business. China is the second country after the US which was the largest recipient in 2017. This is the best market in Asia to do business because the consumer spending power is still increasing. In addition to this, the Gross Domestic Product (GDP) of China averaged up to 1. 81% from 2010 to 2018. GDP is the seasonal changes in goods and services that are produced by Chinese economies in a quarter. The rank of China for the highest GDP is 26th and forecast is about 1. 7%.
Social factor of China
The population of China is growing from 1990 and today it is the most populous country in the world having the population 1. 39 billion in 201. About 17. 15% population belongs to the age of 0 to 14 and the percentage of the pollution with age group of 15 to 64 is 72. 04 and rest of the people are above 65. According to the report of Credit Suisse Research Institute 2017, Chinese people especially, young and middle age one spend money on food, clothes, cars, phones, and property. In 2017, the adult literacy rate was 96. 88% whereas it was 99. 73% in youth. In order to provide education to the poor and rural areas, national policies set the objectives to achieve this goal. Almost more than half of the population of China is an unbeliever in religious. There are two minor religions, Christian and Islam in China with the proportion of 5. 1 and 1. 8 respectively. About 18. 2% population has faith in Buddhism. People are run toward Buddhism due to its social values like having the highest proportion of females and education believers. People in China are always try to do their best like for achieve their goals they use alternative methods. Usually, people of China believe to work smart rather than working hard.
Technical landscape of China
China have the largest smartphone users (1. 34 billion) in world. Meanwhile, the maximum volume of people connected with internet. Taking an advantage from that source will be very valuable to our product. China is also investing a lot in Research and Development and it is improving day via day and reached at 463 billion. This is the reason to get a 2. 07% proportion in GDP and with second sport, china invested 377 billion after the U. S. A in 2015. With this contemporary era, China is the new place for marketing industry. It has large internet users which makes perfect conditions to boom the sales of our product via social media marketing. China banned the worldwide famous websites such as Google, Facebook, YouTube and other, but they use substitute Chinese websites such as Weibo, Douban and WeChat. It is good idea to make honey product viral via target advertising on that platforms. Alibaba group websites is worldwide known for their e-commerce business and that places is reliable sources to sell our product with advertising and trade our product their directly to customers. Douban is considered as chines Instagram where we target the social media ads via giving the health benefits of our product to young ones. Google is replaced via local search engine Baidu in China. Target the user’s trends via getting the data from that search engine and use that data to know about Honey demands and trends help us to connect with Chinese customers and advertise our product according to them. That technical factors make the honey market future bright as we seen currently.
Environmental Problem – Every country is suffering with global warming and other environmental issues. China also fighting with air pollution, water pollution, population growth and other environmental issues. Currently, Health issues of China is on peak due to spread of cancer among Chinese people. Some villages of the country known as cancer villages because larger number of patients of cancer exist there. However, China is taking actions against that environmental and health problems. They implemented the green strategy program for saving country from pollution. The state environmental community started from 1984 and dealing with such issues. They formed 2 laws, The Cleaner Production Promotion law and the environment Impact Assessment law which lend a helping hand to implement the Green strategy program on China. January 1, 2018. The law supplanted the contamination release charge framework with a domain insurance assess, furthermore, the assessment has been demanded since April 2018. China has expanded both the territory and stores of its timberlands. It was recorded as one of the 15 nations protecting the most region of forests in the world.
Legal Laws of China
There are various laws that helps a business to grow in Chinese environment. Labor issues are directed by The PRC Labor Law 1995, the PRC Labor Contract Law 2007, and different authoritative controls. China's IP security administration has grown quickly since the nation joined the World Trade Organization. Its laws are currently for the most part in accordance with universal guidelines. Furthermore, Trademarks, licenses, copyrights, exchange insider facts, geographical signs, and plant reproducers' rights are altogether perceived types of IP that can be secured under Chinese law. On the other side, urban customer livelihoods increment and the interest for quality nourishment merchandise, more secure creation, and prepared sustenance’s likewise increment, and urban inhabitants and stores pull in more national and media consideration regarding nourishment issues. Nourishment and wellbeing law of China will give us opportunity to blast our deal since we will be going to offer another item with elevated requirements of value.
