PWC - Beijing to Budapest - CHINA

PWC - Beijing to Budapest - CHINA - China China 4 2004/2005...

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China
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China Retail & Consumer Thought Leadership Study, 2004 Area (‘000 sq km): 9,600 (US 9,600 – EMU 2,500 – World 133,700) Capital: Beijing Population (million): 1,280 (US 288.4 – EMU 305.5 – World 6,200) GDP (USD billion): 1,300 (US 10,400 – EMU 6,600 – World 32,300) GNI per capita (USD): 960 (US 35,400 – EMU 20,320 – World 5,120) Currency: Chinese Yuan Renminbi (CNY or RMB) Languages: Standard Chinese or Mandarin, Yue (Cantonese), Wu (Shanghaiese), Minbei (Fuzhou), Minnan (Hokkien-Taiwanese), Xiang, Gan, Hakka dialects, minority languages (see Ethnic groups entry) Main religions: Daoist (Taoist), Buddhist Government type: Communist state ECONOMIC OVERVIEW After two decades of market reform first instigated by Deng Xiaoping 20 years ago, China has become the world’s second-largest economy by purchasing power parity. Since joining the World Trade Organization (WTO) in 2001, China has been gradually liberalizing and expanding its market, creating tremendous opportunities for both domestic and foreign investors. GDP AND CPI Notwithstanding the outbreak of Severe Acute Respiratory Syndrome (SARS), China achieved real GDP growth of 9.1% in 2003. From 1992 to 2003, China’s GDP has grown at an average annual rate of 15.5%, increasing fivefold since 1992. China’s GDP evolution (1992-2003) The CPI increased by an annual average rate of 1.2% in 2003, after a marginal decrease in 2002 of 0.8%, mainly due to price rises in food, services items, housing, fuels and utilities. Official estimates put inflation for 2004 at an average of 3.2% as the government acts to cool investment levels to prevent the economy from overheating. Source: China Statistical Yearbook 2003 0 2000 4000 6000 8000 0000 2000 4000 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% Growth rate Year RMB billion 19
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2004/2005 Global Retail & Consumer Study from Beijing to Budapest China PricewaterhouseCoopers FOREIGN DIRECT INVESTMENT In 2003, China overtook the US as the largest recipient of foreign direct investment (FDI). FDI in 2003 amounted to USD53.5 billion, a 1.4% increase from 2002. 39% of FDI was attributed to investments from Hong Kong and Taiwan, while investments from the US, Japan and Korea amounted to 26%. A major part of the total FDI was channeled into manufacturing with a focus on labor-intensive, low-tech export manufacturing projects. With the substantial liberalization of China’s service sector by December 2004, it is expected that more FDI will go to the service sector. Regulations governing the retail and consumer sector and its relaxation In accordance with the World Trade Organisation (“WTO”) market access timetable, foreign enterprises are allowed to set up wholly foreign-owned enterprises (“WFOE”) to engage in retail and wholesale activities by 11 December 2004. Most restrictions on equity, geography, number of service suppliers will be eliminated by then. On 16 April 2004, the Ministry of Commerce issued the MOFCOM Notice (2004) No.8 “ Administration Measures for Foreign Investment in Commercial Sector ” providing further relaxation for foreign participation in retail and wholesale industries.
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This note was uploaded on 04/05/2011 for the course BUSINESS 404 taught by Professor Kast during the Spring '11 term at Wilfred Laurier University .

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PWC - Beijing to Budapest - CHINA - China China 4 2004/2005...

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