business envt in china

8/11/2019 business envt in china

1/26

BUSINESS ENVIRONMENT INCHINA


2/26

Introduction Capital : Beijing Largest City : Shanghai

Official Written Language :Vernacular Chinese

Government : Single partySocialist State

Area :9,569,961 km2nd

Population (2012) :1350695000

GDP (2014) : $14.625trillion

Currency : Renminbi


3/26

History

China dates back as early as 4000 B.C. Here we

take a brief look at the ancient Chinese dynastiesto modern day China can trace her culture backto a blend of small original tribes which haveexpanded till they became the great country we

have today.


4/26


5/26

TraditionalChinese Culture

One of the worldsoldest civilizations

Varies greatly between provinces, cities andeven towns

Imports Components of Chinese Culture:Literature, Music, Visual Arts, Martial arts,

Cuisine Chinese Religion and Philosophy:

Major influence. Confucianism, Taoism andBuddhism are the three great thoughts. Mostsocial values are derived from these.


6/26

Religion & Philosophy

Confucianism: Key objective of an intellectualshould be to make full use of his ability,personality and intelligence to do good for

the state, society and the world Taoism:A balanced relationship between human

beings and nature. People must performaccording to inherent rules in order to establish a

harmonious and orderly world where everyone isequal and kind

Buddhism: Promotes code of conduct in life.That is what they call Five Precepts of avoidingkilling, stealing, indulging, lying and alcohol


7/26

People

About a fifth of the world's population live in China.

74 per cent of live in villages and small towns. Mostare in densely populated eastern China. Western

China has less than 10 per cent of the totalpopulation.

By law, men marry not until 22 years old, and women

until 20. Late marriage is encouraged and notmore than one child is allowed.


8/26

Geography

Chinas geography takes an important placein its development.

China is guarded from all the sides with manynatural borders. Mountains, deserts, riversand seas formed natural barriers for explorers

and invaders.


9/26

Gobi Desert

It covers much of the northern side of

China.

It is a natural border defense against

attack from nations.

It is important as a possible mineral

resource area with finds of gold and

copper located and possibly oil.


10/26

Himalayas

These extend much over the

southwestern China.

They form a strong natural barrier.


11/26

Plains

Towards the East there are low lying

plains that form the fertile region for

farming.

This region was formerly known as

Manchuria


12/26

Rivers

Two great rivers flow across China :the Yellow River in the north and the

Yangtze River to the South.

It is the water of Yellow river that

nurture the whole Chinese nation

Yangtze Basin is home for 1/3rd of

Chinas population. It is most

important river for agriculture,


13/26

Economy

Industry and agriculture are the largest sectors,producing more than 60 per cent of China's GDP,and employing over 70 per cent of the work force.

China exports $1.2 billion U.S. in consumer

electronics, office machinery, and apparel, as wellas some agricultural produce each year.

The per capita GDP is $2,000.

The official poverty rate is 10 per cent.

Today, China's economy is 43% agriculture, 25%industrial and 32% service related.

Industry is focused on raw mineral processingand the manufacturing of a wide variety of items.


14/26

Major Business in China

China is the global hub for manufacturing and isboth the largest manufacturing economy in theworld as well as the largest exporter of goods.

Major industries in China includes: mining and oreprocessing, metals (iron, steel, aluminum etc),

coal, petroleum, cement, textile, fertilizers,consumer products, food processing,transportation and telecommunicationequipments.


15/26

Contd

Despite the dominance of industries in thecomposition of Chinas GDP, Service Sector iscatching up quickly.

China's services output in 2010 ranks thirdworldwide (after US and Japan)

Services tend to be labour-intensive, theirexpansion may also encourage faster jobcreation, higher wages and greater household

spending.


16/26

Power Industry

Thermal, Hydro and nuclear power industrieshave developed very rapidly in China.

Presently, China is the world's second in theinstalled capacity of generators and generatedelectricity.

The sufficient power supply in China is mainlybecause of the rapid growth of the fuel coaloutput.

In 2001 China exported over 80 million tons ofcoal, becoming the second largest coal exporting


17/26

Contd

Petroleum and natural gas are China's importantenergy resources.

The development of oil industry has accelerated the

growth of local economies and relevant industries,such as manufacturing, iron and steel industries,transport and communications.

In 2003, China's nuclear-power-generatedelectricity topped a historical record with anincrease of 120 percent over 2002. By 2020, Chinaplans to build 27-million-kw nuclear power facilities,

in addition to the 8.7-million-kw nuclear powereneration ca acit alread in roduction and under


18/26

IMPORT EXPORT POLICIES OFCHINA


19/26

In China they enjoys the freedom of undertaking allthe import and export activities includinginternational trade, with the exception of someforbidden by state laws and regulations.

Most of the import businesses in China aretransacted in FOB( Freight on board) prices. Only avery small minority of the import commodities are

transacted on CIF( Cost, Insurance & Freight) terms.The majority of means of payment are in letter ofcredit (L/C).


20/26

General import procedures transactedunder the terms of FOB include:

writing down an effective contract.

writing L/C, booking space, pushing forshipment.

insurance. checking documents.

making payment.

customs declaration.

receiving the shipment. inspection.

goods delivery.

claiming import indemnity.


21/26

Contd

1. The establishment of an effective importcontract

A contract comes into effect once the price is quotedbased on a written agreement, or the contractbetween a Chinese import enterprise and a foreignsupply businessmen is accepted or the price quotedby the foreign supply businessmen is accepted.

2. The writing of a Letter of Credit (L/C)

Buyers have to fill in an application according torules & regulations in the contract so as to write outa letter of credit once the import contract is signed.The content of the L/C must conform with the

articles in the contract.


22/26

Contd

3. Booking space and pushing for shipment

If the import contract is signed under the FOB priceterms, the buyers are responsible for bookingspace. At present, the space booking of China's

import trade is generally entrusted to ChinaNational Foreign Trade Transportation Corporation.

4. Insurance

The insurance of import contract under FOB andCFR terms is on the purchasing side.
http://www.icbs.in/china-trade-guide/import-export-policy-china.htm


23/26

Contd

5. Checking documents and making payment

The Bank of China will check the number of documentsand contents by referring to the regulations in the Letterof Credit after receiving bank drafts and documents. Ifthey are found correct, the Bank of China will make thepayment to the overseas enterprises.

6. Customs declaration and receiving shipment

Import enterprises, after retiring documents, shouldprepare for receiving the imported products. Once theproduct reached the port of arrival, they should startcustoms declaration and receiving the import articles.
http://www.icbs.in/china-trade-guide/import-export-policy-china.htm


24/26

Contd

7. Checking, receiving, and goods delivery

Imported goods must be inspected by commodityinspection organizations. If the import goods are foundmissing, damaged or in short, import enterprises can

claim an indemnity with proof from commodityinspection organizations.

8. Claiming an indemnityClaiming for an indemnity often happens in cases inwhich foreign sales parties cannot deliver products, orcannot deliver them on time or the quality, packaging,

amount cannot fit those prescribed in the contract.


25/26

Continued

II. China Export Procedures

In China's export business, BOF terms apply only ina small number of countries and regions whichhave signed agreements with China on the same

delivery terms.Export procedures usually include:theestablishment of an export contract, preparingexport commodities, push for documents, checking

and changing documents, booking space, customsdeclaration, commodity inspection, insurance,loading, writing documents and settlement ofexchange.


26/26

business envt in china

Documents

Transcript of business envt in china