公司 標誌 Market of China in Transition HuNan Group Ho Man Chi, Karen Lai Tin Ming, Terry Ng Yue Wah, Tracy To Ka Yan, Yammy Tse Ka Kin, Stanley Yu Hoi Ling, Daisy MKT221 Marketing in the Chinese Mainland

Introduction 6 Key characteristics  Economic sectors  Work force  Trade  Communications and Infrastructure  Foreign Direct Investment  Economic growth

Economic Sectors China economy by sector AgricultureIndustryService %49.2%32.8% %50%35% The Chinese government will inject more capital into large state-owned companies, optimize their structure and make them more competitive," China aims to build large, internationally competitive companies by 2010

Work Force Population1.27 billion Work Force 700 million People work in agriculture 350 million Source : THE CIA WORLD FACTBOOK 2001

Trade  Export (2001): $232billion  Import (2001): $197billion  Trade Surplus: $35billion  Exports of high-technology products:↑  Entry of World Trade Organization in December 2001

Communications USChina Telephones main lines in use 194 million135 million Internet Service Providers 7,8003

Infrastructure The factsUSChina Highways3.98 million miles.87 million miles Railways140,281 miles41,960 miles Airports14,695489

Foreign Direct Investment  China's entry to the WTO  Foreign investors poured $10.1billion into China during the first three months of 2002  Tax breaks to attract foreign direct investment into China  Preferential rate of just 15 percent

Economic Growth  Economic growth rate:7.3%  Average economic growth rate:8.3%  the sixth largest economy in the world, in terms of GDP per capita  China's government spending is 12.5 percent of the Gross Domestic Product

Discussion 1) How does the transitional nature affect businesses? 2) Given the above, how should businesses develop plans and strategies in China?

Economic Sector  The businesses become much more diverse  Increasing the number of FDI  Technological improvement is essential.  Increasing the demand for skillful and educated labour

Economic Sector  Shift the investment from agriculture to industry and service.  Target market→ middle class of the society  Providing support services to the customers  Using Marketing research to identify the trend in future  Creating brand equity

Workforce  Labour Intensive Industry  Adjust wages Rate  Improve the welfare system

Trade  Cultivate concept of quality & safety of products (esp. high-tech. products)  Carry out more marketing research in order to open up new markets efficiently  Act ethically to increase image & branding

Communication& Infrastructure  1.Easy to distribute the product  More likely to attract the FDI  More channel to promote the business  Producer and consumer can be easy to obtain the information  more opportunity for the business (online sale)

Communication& Infrastructure  move the production line to the north of China  reduce cost  distribute the product more far away  A better supply chain management( just on time production)  make use of internet promotion  Create a better customer relationship( a media to contract with customer)  Online sale( order, and after sale service)

Foreign Direct Investment  More opportunities for businessmen  Rapidly development in China  Keen competition in China

Foreign Direct Investment  General living standard increase, re arrange the target segment. More high income group  Keen competition, companies should be concern about quality of our products  Set a reasonable price and promotion strategy

Economic Growth  GDP will rise (economic growth is measured by GNP/GDP)  investment will increase  produce better product/higher class brand  Cost↑  forced to pay fees  upgrade their equipment or implement other costly changes

Economic Growth  Produce more profitable/high quality product  Have more diversify product ∵ ↑living standard  Technology transfer through the import of foreign equipment  better technology  reduce the cost

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