Market analysis report for china

Document Type:Thesis

Subject Area:Business

Document 1

The absolute size of the stock market of China is the second largest in the world after the United States. The country has one of the highest market value which, is relatively higher than competitive states such as Japan, Canada, Germany, and France. The main reason for choosing China for the market analysis is because of the total global stock markets share of the country that has risen drastically. The market capitalization and the overall economic output of China indicate that the country market is emerging. The primary reason for the emerging market in China is the support from the government where they efficiently maintain the total control of the lives of the citizens and essential support of the internal investment, private ownership and entrepreneur ventures.

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Despite the challenges that the country has been experiencing in the market share, it has been emerging significantly more than other developing country. The government of China intervened in the domestic financial management institutions to ensure development of the country’s advancement of the market-oriented economies (Tirthankar 322-336). China’s governance and infrastructure support are vital in shaping the landscape of the business. The government of China fosters in a dual market structure that evolved from the centrally planned economy to an economic system that is a socialist market. The rapid industrial growth is due to the growing technological advancements, the upsurge in productivity and direct foreign investment. China has been presenting essential opportunities to the investors due to the country’s impressive economic growth and low production cost.

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These opportunities that led to rapid growth for the market of their products. The underdeveloped legal system in the country has contributed to various challenges to the business that are conducted in China. The primary legal problems include the contractual rights and uncertainty concerning the protection of properties that requires the foreign investors to come up with essential strategies to address the legal challenges that they face. The primary legal problems and risks in China include intellectual property rights, bureaucracy and regulations, and corporate financial policy. These limitations by the Chinese government may hinder the performance of the companies and product design. China has one of the highly complex culture that consists of diverse communities. The culture is mostly driven from the Confucian thoughts due to the pervasive influence of the culture of the Chinese people which, are the fundamental core of the identity of the Chinese.

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The Confucian ideas have dominated the Chinese way of life for several decades despite the participation in British Society. The fundamental values of the Chinese culture comprise of the hierarchical social life structure, emphasis on achievements and hard work, family importance and self-restraint and molarity cultivation. Entry Strategy and General Business Strategy The companies should critically analyze the available resources, the previous business and export experiences and long-term strategy before making an entry in the Chinese market. The companies should evaluate the basic plans that are essential for the market entry which, include the demand for products, the view of the Chinese on the new product that is entering the market and the possibility of the increase demand in the future application of the product.

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The company should consider having a representative in China through Chinese distributors, representative or partners who will be vital in the provision of the local contact and knowledge that is essential for business success. The holders of the Intellectual rights should critically understand the efficient ways that they can protect their Intellectual Property in regards to the Chinese law before accessing the market and should also conduct an exhaustive due assiduousness on potential consumers and partners before involving the company in any transaction. China offers a wide range of option of the corporate establishment of foreign companies (ITA n. p). The market supports the creation of a new category that improves rapid exploitation of the prospects for the new products. The country focuses on producing specific products that consumers require and avoid creating unnecessary products.

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Recommendations China can ensure the continuous growth in the emerging market by addressing legal instability, difficult cultural uncertainty and control finances. China should address various aspects such as fiscal and monetary assistance, the high growth of credits, the state-owned enterprises that are inefficient and bubbly housing markets that affect the emerging market. It is indispensable for the stakeholders to comprehend difference in the competitive, legal and cultural environment of China since these factors can be challenging to manage and may affect the business growth. It is fundamental for the investors to assess the legal and cultural differences and impact on the business conducts and practices. Even though China lacks a full legal system that is functioning and supports capital and business formation, the country’s economy continues to grow significantly.

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