China Pestle

Topics: Investment, Macroeconomics, Local government Pages: 3 (824 words) Published: March 2, 2011
Government’s focus on equitable growth--The Chinese government has been very keen on the implementation of high growth policies since the beginning of 1986, and has thus consistently followed policies that are favourable to trade and conducive to a free-market environment.

Improving relations with APEC--The Chinese government has renewed its efforts to form new international relationships, along with strengthening existing ties with countries such as the US, Russia and the UK. China is at the centre of plans to improve relations among members of Asia-Pacific Economic Co-operation (APEC).

Lack of co-ordination between central and local authorities--A federal structure would allow the central government to accomplish its regional goals by operating through the local government offices, rather than alongside them. However, this may result in the rejection of approved local investments by central authorities, thereby making the investment climate insecure.

Robust growth rate--The country has maintained strong economic growth over the years, with an average GDP growth of 10.3%

Favourable government policies--In China, the financial policies remain relatively consistent on account of the heavily centralized political power of the Chinese state. Economic reforms began in 1978 and accelerated around 1986, which resulted in China's transformation into one of the largest economies in the world. The country is now a free-market economy with policies supporting economic growth and development.

High inflow of foreign investments--China encourages foreign companies to invest in advanced manufacturing, energy conservation, environmental protection and modern services. China has shifted its policy on the deployment of foreign funds from 'quantity' to 'quality', endeavoring to create new ways of utilizing foreign funds and optimizing their existing utilization structure.

Domination of state-owned enterprises--The state-owned enterprises are going to get most of...
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