Why Is China Essential for Global Business?
No doubt, China plays an important role in the global economy. Many economists have interest in researching China’s fast growth and its impact in global business.
China is currently one of the largest exporters and importers in the global economy. Over the last two decades, China’s GDP (Gross Domestic Product) has grown from USD 1.211 trillion to USD 13.608 trillion, which makes China the second-largest economy after the United States.
China utilizes its human resources to achieve vast growth in the economy. The vision of the authorities has been persistent in implementing policies in the economy. China has already implemented its twelfth Five-Year Plan (FYP), which has been a successful engine of the economy combined with other social programs (OECD, 2015).
The early stages of China’s development were mainly based on demand-based growth. However, in the last decade, China achieved balance in a demand-based economy with more household consumption. Therefore, the Chinese market has become an important market for producers from other countries.
On the other hand, China’s strategy of the next Five-Year Plan (FYP) concentrates more on the services sector, which is in a high growth period and far from reaching saturation. At the same time, E-tailing is becoming an important part of the Chinese retail sector. The share of e-commerce in the retail sector of China exceeds the share in the retail sector of the United States (Mohammad and Ashraf, 2016).
In summary, China’s growth contributes to the share of global business as it increases demand and supplies. The implementation of several policies and plans in a short period of time has been a good precedent for other emerging countries of Asia. The rising household consumption of the country makes China an important market in global business. China plans to concentrate more in the services and technology sector in the near future, which may increase its importance in global business.
Feenstra, Robert C., and Shang-Jin Wei. “Introduction to ‘China’s Growing Role in World Trade.’” National Bureau of Economic Research, 2009, pp. 1–41.
OECD. “China in a Changing Global Environment.” 2015, pp. 1–97.
Rashed, Mohammad Sharfuddin, and Ashraf Un Nesha. “Doing Business in and with China: The Challenges Are Great, but So Are the Opportunities.” Global Journal of Management and Business Research, vol. 16, no. 2, ser. 1.0, 2016.
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