by Mohammed Lodhi Hussain
China’s economy is driven by a desire to improve the quality of life for the individual. Through group efforts they are able to
When you look at Bei Jing what do you see, people, culture, or greater yet construction. This has been the new change in China, unparalleled economic growth.
For instance, during my expedition to Yixing[1], located sixty kilometers southwest of Wuxi, we took the bus from Nanjing to Yixing bus station. After arriving to Yixing we traveled on a tour bus. We expected the tour bus to get us in a short time, However the bus driver and assistant were traveling along the domestic bus route, picking up passengers. Startled at first, we began to understand the modified economic behaviors that led to the precipitation of these behaviors. Namely, the current domestic bus service was unable to deal the volume of passengers that required its service, thereby enabling enterprising individuals an opportunity to earn more money. The assistant would hang on the door, calling out to the crowd of people, asking for a ride towards there area. The bus can only hold nine people. The bus driver also offered chestnuts for sale on the bus. These behaviors are parallel to the innovative and market driven society that predominates china. Even in the rural country we observe the interplay of shifting demand very supply.
During our time we in Nanjing
Probably my greatest insight into the world of international import exporting is from a friend, Bai, he is a Pakistani who studies at Nan Shi Da, and his family have been in the importing business with China for over twenty year dealing in bicycle parts. During my time in Nan Shi Da I would visit his room and we would discuss for hours the details of the importing business in China and how it can be modeled for the United States. Bai provided insight into the framework of the importing industry in China. Bai stated that the Chinese government has made it liquid for investors to invest in China by offering interest free loans to foreigners that enable private enterprise to flourish. With interest free loans, investors can place all capital to build a strong business thereby strengthening the overall economy. Bai said that about 1992, China began to gradually relax its policies on importing goods. China had abolished or reduced import licenses and quotas. These offered greater opportunities for importers to increase dealings with China.
China’s demand for foreign made products is indicative with there concerns over the energy sector. Within the energy sector China is acquiring gas, electric, and petroleum from Russia, Latin America
China’s Economic History in Brief
During the 1950’s China began to codify its economic activity under state control and thereby defining production, pricing and the allocation of goods and services. Known as the planned economy.[2] In 1979, China initiated economic reforms to expand and modernize its economy. Through reduced control of the economy, allowing for some market economy, and encouraging foreign investment China’s reforms have led to unprecedented economic growth. These reforms reside on a framework of the state owned sector that predominates China’s economic policy. This socialist market economy has amalgamated current popular economic models with the Chinese philosophy. The reforms propelled China’s economy, which grew at an average annual rate of 10.2 percent during the 1980’s and 9.7 percent between 1990-2002. In 2002, China’s per capita GDP[3] was $990. China’s industry activity, manufacturing, mining and construction contributed to the fifty-one percent of the countries GDP in 2002. Transportation commerce and services together accounted for thirty-four percent. Agriculture was the remaining fifteen percent.
While in Nanjing, I had an opportunity to interact with the managers of the most popular nightclubs, Namely Scarlet and Rick’s Bar. I expressed my interest in how to be successful in the Chinese market. Foreigners who live together manage Scarlet and Rick’s bar. Mike was managing scarlet. He told me that to be successful you have to directly target your audience with alienating the general population. This has worked wonders for scarlet. On any given evening the place is packed with locals and foreigners. There strategy is to build brand recognition. Through incentives as discount to free admissions for foreigners and free drinks night that have succeeded. Ask any taxi driver and they will know Scarlet, they have become entrenched in the society. There is interplay between the two bars. During this past New Years Eve party Scarlet charged one hundred kuai or thirteen dollars for admission. Rick from Rick’s bar closed his business and directed everyone to go too Scarlet. Mike suggested that to start a business involves many steps.
Initially one must file an application for Establishment, which includes an approved project proposal from the Chinese Government, an approved feasibility study report, which assess the viability of the business, the letter of intent of the business owner, and a credit report on the foreign party. Afterwards a Contract and Articles of Association are submitted for approval. This is when you are able to file for registration of your businesses name which is approved by the provincial or municipal administration for industry and commerce. A list of directors and Business licenses are also reviewed for the parties and their designees.
[1] Yixing is famous for its Purple Tea Pots and Caves.
[2] Also known as the Command Economy.
[3] Gross Domestic Product