To: Mrs. Karen Cayo
From: Graul Guenther, Haederer Steffen, Holder Mario, Hub Michael
Date: November 10, 2003
Subject:
Summary
China's logistics sector has a bright future. Its economy keeps growing with an annual rate of seven percent, which stimulates the demand for logistics. Also the accession to the WTO will increase its import and export and bring new opportunities to the logistics sector. The influx of foreign capital and multinational logistics enterprises in the Chinese market will help to modernize the country's logistics.
Background
Economic Environment
Before the introduction of the policies of reform and opening to the outside world, China had a unitary public ownership economy, which lacked vitality.
But since the putting into practice of the reform and opening to the outside world, the Chinese government has encouraged the development of diversified economic elements while insisting on the primacy of public ownership. As a result, both the individual and private economies have developed rapidly and the GDP has quadrupled. In 1999, with its 1.25 billion people but a GDP of just $3,800 per capita, China became the second largest economy in the world after the US. Agricultural output doubled in the 1980s, and industry also posted major gains, especially in coastal areas near Hong Kong and opposite Taiwan, where foreign investment helped spur output of both domestic and export goods.
Industry and commerce constitute the basis of the Chinese economy, but agriculture employs the majority of the labor force.
About 60% of the labor force is engaged in agriculture and forestry, about 25% work in industry and commerce, 5% in construction and mining, 5% in social services, and 5% other areas. Important Chinese industries include textiles, garments, machinery, cement, iron and steel, coal, and oil.
Trends:
- China's gross domestic product (GDP) is growing about 8 times as fast as the population.
- Both imports and exports are increasing.
- The growth of the overall national economy was driven formerly by the primary and secondary industries, but now it is being driven by the secondary and tertiary industries.
Legal and Political Environment:
Beginning in late 1978 the communist Chinese leadership has been moving from a sluggish Soviet-style centrally planned economy to a more market-oriented economy but still within a rigid political framework of Communist Party control.
On the darker side, the leadership has often experienced in its hybrid system the worst results of socialism (bureaucracy, lassitude, corruption) and of capitalism (windfall gains and stepped-up inflation). Beijing thus has periodically backtracked, retightening central controls at intervals.
Trends:
- More decentralization – plans to speed up privatization of state owned enterprises.
- More Chinese-foreign joint ventures.
Competitive Environment:
Various market access restrictions are lifted over the next few years as China honors its commitment to the World Trade Organization (WTO). New regulations which have been recently implemented by the Ministry of Foreign Trade & Economic Co-Operation (MOFTEC) allow foreign investors to operate logistics businesses and getting products to the end customer has proven to be the key challenge in one of the fastest growing markets in the world.
One year after joining to WTO, changes to tariffs, relaxed legalities, to customs – most businesses operating in China have benefited from the association. China’s spending last year on logistics was about US$200 billion – 20% of the country’s GDP. It is expected that China’s logistics market for third party logistics over the next 10 years will grow 16 to 25 % annually. (source – Morgan Stanley report).
Trends:
- More competition since entering the WTO.
- More demand for shipping (joint ventures).
Technological Environment
China has to tackle some serious concerns on the R&D front. Much of China’s research has traditionally been driven not by universities but by government controlled organizations.
Poor linkage among government, university and industry researchers has resulted in inefficient utilization of the country’s science and technology resources. Since the late 1980s, China has made various efforts to utilize funds more efficiently. Inadequate intellectual property protection however discourages Chinese companies from investing in research. Several foreign companies, including Microsoft, have established research centers in China, but much of their research has focused on product localization.
Cutting edge research by foreign companies will probably take off only if China moves fast on the IPR front.
Trends:
- The level of technical equipment of transport, posts and telecommunications is continuously rising.
- Boost in car sales.
- More demand for high-end products.
Social and Cultural Environment
China is the most populous country in the world, home to 1.2 billion people (20% of the world's total).
| Anmerkungen: |
| impressum | datenschutz
© Copyright Artikelpedia.com
