Tag Archives: chinese market

China’s Economy : difficult to approach

Understanding Chinese economy

The Chinese market has always been one that is difficult to interpret and understand, particularly its customers and entrepreneurs. It has been a huge challenge for foreign companies who want to deal partnerships with Chinese businessmen, not only do they find trouble communicating with one another, but also struggle to find agreements on various subjects.

China is trying to make efforts

To take one example, Partnership between Australia and the Chinese has always been complicated.

China has been requested to conclude the negotiation on the Regional Comprehensive Economic Partnership (RCEP) at the end of 2016. The organization has spoken of large issues, with promises to arrange for agreements between the two countries. While Australian businesses have been hesitating to negotiate with the Chinese, trade agreements between China and India have begun. The new project shows promising potential as the economy in both countries are growing.

Reforms involved in China’s market success

In recent months, China has adopted many regulations in order to improve their economic activity. Previous protocols have been difficult, and take long amounts of time to build up. According to American corporates, China should apply for loose monetary policies, which would improve in settling agreements.

The Chinese market has acknowledged that they are not interested in this type of economic approach. Chinese businesses are conscious that the strategy development for this is not an effective long-term resolution. In fact, for years and years, China has been very patient in their progress, and has taken time to effectively seek for solutions. The present day has shown that the country has succeeded in reaching its goals and built a solid economy.

China’s most effective economy is the online market. The development on Chinese e-commerce websites have proved to be the most successful compared to the rest of the world.

Consequently, foreign companies have found difficulty in penetrating the Chinese market due to their lack of knowledge on the economy culture.

Chinese customers’ confidence

chinese cutomer's confidence

According to American companies, the best way to improve the country’s productivity is to create competition within the market, whereas the Chinese government chooses in giving priority to privatized state-owned enterprises.

Market productivity depends on the reliance between the country’s economy and its customers, who are in charge of making their businesses work. In view of many surveys, two factors have been raised. The employment rate in China is growing, even with the economy growth rate decreasing to 7%, employment rate has seen 13million new opportunities granted by the Chinese government. On the other hand, Chinese consumers need to see concrete reforms, whilst the government approves them, only until then will they be in confidence in their economic plans.

There have been other ways to attract Chinese consumers, however government reforms enable them to become very connected. They also become sensitive of what they see or hear on the news and social media, thus making their general knowledge of buzz and trends more appropriated.

That’s why Digital Marketing is the key to success, in such an economic-precise nation.

You can read more

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    A hard landing for China’s economy?

    A hard landing for China’s economy?

    China’s top economic planner and head of the National Development and Reform Commission (NDRC) Xu Shaoshi asserts that “China will absolutely not experience a hard landing” and that “these predictions of a hard landing are destined to come to nothing”.

    The country’s economy is not headed for a hard touchdown, but the instability of the global economy may pose a risk to the efficiency of the country’s growth. China acknowledges that they have faced a tough battle to keep their global economic ranking of no.2 from growing, with an estimated of 6.5% increase in employment and restructuring state-owned enterprises over the next five years.

    During the 12-day annual national parliament event, the government outlined the issue of its economy transitioning from an investment and export-focused economy to one based more on services and consumption.

    China’s economy increased by only 6.9% in 2015, the slowest it has progressed in a quarter of a century, but still steadily the fastest compared to other major economies.

    Capture d’écran 2016-04-01 à 17.48.42

    The country has aimed to increase its growth target of 6.5% to 7% for this year, introducing a range that seems rather demanding; whilst seeking flexibility in employment growth and restructuring the “zombie companies” in their various industries.

    According to Chinese Prime Minister Li Keqiang, the country’s new objectives are aimed at energy consumption, inflation, and employment opportunities. However, he did not further mention how these objectives would be met. Many investors had hoped that China would propose an assertive resolution for financial spending and prop growth, but instead the draft goal of operating an economic deficit equivalent to 3% GDP (being up from the previous annual target of 2.3%) disappointed many.

    China’s massive foreign exchange reserves more than $3 trillion, but a fast decline in assets in the past 18 months with Beijing supporting the country’s currency has shaken some investors. The condition of China’s economy, and Beijing being able to facilitate it, were main talking points at an assembly of 20 financial ministers and significant bankers in Shanghai in February.

    Li stated that China has the confidence and support needed to handle difficulties both locally and globally.

    “In general, I think China’s economy performance has stayed at a reasonable range (since 2015)” Xu commented and added that the Chinese economy should not be viewed any longer through traditional evaluations. “First, we should look from the angle that the economy has entered the ‘new normal’ period,” he said, in which growth rates have transitioned, and the economy growth engines are progressing towards services from the investment.

    Chinese manager

    According to Xinhua Official News Agency, China currently has more than 150,000 public enterprises, with the liquidity of more than $100 billion yuan, and the employment of 30 million people. The Chinese government cannot neglect the volatility of the global economy, and must put words into action in order to sustain their economic development.

    Read more:
    5 tips entering Chinese market

    7 opportunities for business in China




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