REALISED BY : DIOURI NASSIM KENTAR AIMAN SAIH OUSSAMA

1. Introduction: geography, history and 2.

3.
4. 5. 6.

overview of market transition. the reforms ; 1978 before and after . Government Strategies and Chinese Stock Market. Understanding China Business. International Trade and Foreign Investment. shanghai

Population
1,300,000,000

22 percent

of the worlds total About 9,600,000 km2

Population

Fifty-six Ethnic Groups

the Han people made up 91.96 percent of the

countrys total population

This is China

History
5000 years
New China in 1949

Chairman MAO Zedong

Reform in China
1949 ~ 1978 Planned Economy

Planned GovernmentOriented

Distribution System
Factory Farmer Citizen Government Agency

DENG Xiao Ping

DENG Xiaoping in 1992

Jan. 1992 Shenzhen Tour

speeches aimed to clarify the muddled idea about whether the establishment of special economic zones is of capitalism or socialism in nature

Reform in 1978
Privatization: Distribution Sector -- Household Contract Land System -- Factory Production Contract System

Distribution System
Factory Farmer Citizen Free Market

Reforms in China 1978 1992

1978 1992 Period of Chaos Transition - Touching Stone and Cross the River Cat Theory - China is changing from the planned economy to market economy with Chinese characteristic Deng Xiao Pings Open Up Policy - Setting up 4 Special Economic Zone Shenzhen, Xiamen, Zhuhai, Shantou - Allowing Foreign Capital into China - Encouraging Chinese getting rich

Size of Chinas Economy

Comparison

of U.S., Japanese, and Chinese GDP 2007

Country

Nominal GDP* ($ billions)

United States

13,841

Japan

4,378

China
*GDP :Gross Domestic Product

3,242

International Trade
Worlds No. 3 trading nation (USA, Germany) Goods trade (exports + imports)/GDP => 64% (others 20%) Trade policy reform after WTO Dec.11 2001

-- participant in global economic community Planned Economy Trade/GDP < 10%

Chinas position changed dramatically after 1978

International Trade

International Trade

Background of the fast growth

Attracting Foreign Capital

- Low tariff - Tax Exemption two free three half Foreign invested production enterprise, operate not less than 10 years, income tax exemption in the 1st and 2nd years, 50% reduction in the 3rd to 5th years.

Background of the fast growth

Attracting Foreign Capital

- Cheap Labor Resource - Government Support Foreign Investment - Oversea Chinese - Japan - USA - EU

Major Foreign Investors in China: 1979-2007 ($ billions and % of total)

Cumulative Utilized FDI: 1979-2007 Country Total Hong Kong Amount 760.2 300 73.8 61.2 % of Total 100 39.5 9.7 8.1

British Virgin Islands

Japan

United States
Taiwan South Korea

56.6
45.7 38.7

7.4
6 5.1

Background of the fast growth

Booming Industry

- Textile - Light Machinery - Processing Industry Low value added Plastic Bag etc. Export Oriented Industry

China Labor Force

How cheap is Chinese Labor? Low End - Urbanization High End - Single Child Policy &

Education Investment Pillar Effect Shanghai

Income Level
Accountant Taxi Driver Sales Manager Teacher 37086 Sewer 31000 Shoemaker 73156 Construction 36000 Peasant 12000 9600 6000-12000 5000

Mechanic Engineer
Technician

59135
62236

Minium Wage per month: 960; 8/hour: Shanghai Fresh University Graduates 2008: 2899/month

Foreign Investment
One of the worlds most important

destination for FDI Pour into China after 1992 Annual inflows over $40 billion since 1996 FDI inflows at $63 billion in 2005 Three distinctive characteristics First, FDI has been the predominant form in which China has accessed global capital (as opposed to portfolio capital or bank loans)

Foreign Investment
Third, FDI inflows come from

other East Asian economies, especially Hong Kong and Taiwan. China decided to accept foreign investment in 1978 China decided to accept foreign investment in 1978

Government Investment
Tax Revenue from Circulation Tax USA Economic Depreciation forces the

economic slowdown in China. Government Spending Infrastructure National Wide Transportation system National wide Communication System National wide Electricity Network - East Region - Enhance the production capacity

Booming Market

Booming Market

Open up Pudong Shanghai 1990

1990Pudong

Industrial Development Zones in Shanghai Six industrial bases:

-Micro electronic industry base -Automobile industry base -Refine steel base

-Petrochemical industry base

-Equipment industry base -Shipbuilding industry base

Industrial Development Zones in Shanghai State-level industrial zones:

-Zhangjiang Hi-Tech Park -Jinqiao Export Processing Zone -Waigaoqiao Free Trade Zone

-Caohejing Hi-Tech Development Zone

-Minhang District Economic &

Technological Development Zone

Zhangjiang Hi-Tech

Park

Services in the Zone

Enterprises Establishment Accounting Service Legal Service Support Human Resource Support License Application Fund Application Service Financing Service Management Consulting Market Developing IT Support

Thanks for the sweetest student in ESCA groupe 2 !!