International Marketing

2012
International Marketing Plan for Launching Chain of Retail Store in China
To: Prof. Jitendra Sharma Target [Type the company name]

Reatail in China [Type text]
12/5/2012
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A Project Report On International Marketing Plan for Launching of Chain of Retail Store in China
for
Submitted by Ajit Singh Rathore In partial fulfillment for the award of the degree of Post Graduation Programming in General Business Management 2011-13 From Xcellon Institute of Business School
Launch of Q Shop in China
By: Ajit Singh Rathore
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Acknowledgement
I take the opportunity with pleasure to thank all the people who have helped me through the course of my journey toward the project, which has been a leading experience to me I am sincerely thankful to Prof. Jitendra Sharma for his guidance .help and motivation. I would to like to express my gratitude to Prof. Daisy Kurien and Prof. Devang Patel for helpful comment and supportive attitude. I am especially thankful to my classmate Shilp Bishnoi to her assistance, criticism and useful insights Finally my project could not possible without the confidence, endurance and support of my family. My family has always been a source of inspiration and encouragement. I am very much thankful to my parent for love, teaching, and support
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Executive Summary
China has a fourth largest country in world according to area and largest country according to population. In past history china faced many challenged and convert that challenges in opportunity. Chinas economic performance over the last three decades has been impressive. GDP growth averaged 10 percent a year, and over 500 million people were lifted out of poverty. China is now the worlds largest exporter and manufacturer, and its second largest economy. China is proving himself to manufacture hub that directly related to environmental problem. China has only 1.1% budget deficit To come out the problem of economic crisis china devaluated the currency. In china market is regulated by government these think directly related to free market force, public interest, Rule by single Republican Party. China is most actively user of Industrial Policies and more focus on manufacturing. In china banking system is largely ruled by government the government sets interest rates for depositors at very low rates, often below the rate of inflation, which keeps the price of capital relatively low for firm China does not allow its currency to float and therefore must make large-scale purchases of dollars to keep the exchange rate within certain target levels In china major transport system is rail transport in rail transport FDI is allowed a certain limit after 2003 In the costal transport china has had over 2,500 berths of medium size or above, of which 650 were 10,000-ton-class berths; their handling capacity was 61.5 million standard containers for the year, ranking first in the world China has a better transport system include 1.47 million kilometers roads China is no.1 in the telephone network with 986.23 million people. In the broad cast media private sector is not allowed and private program should be approve before telecast Majority is Buddhist. Chines people of urban area are now attracting buy the western style of culture and living. Number of nuclear family is also increasing And people are more health conscious and sports is more attract to them In china business culture is very formal. China people take time to make decision and focus on everything that your behave, eating style, your dedication regarding Launch of Q Shop in China By: Ajit Singh Rathore Page 4
to this deal. In china major interference came by government. In china giving gift to government officer is illegal. China follow the strategy of one country two rule . in china the rule are different for Taiwan and hong kong. In china environment law is strictly followed by companies After WTO agreement china allow to foreign money directly investment into country but major control is in the hand of government
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Industry Analysis Executive Summary Chinas economy is the second largest in the world. , China has achieved an average 9.9% annual GDP growth. The house hold Chinas consumer consumption will eventually rise to levels more in line with other developed Asian nations. Historically, Chinese families have a tendency to focus on housing rather than consumer goods as their first major purchase In retail industry china has a tough competition between foreign and local retail chain. The companies are more focus on cost cutting through their bargaining power of supplier and improve the logistic system with new technological changes Retail industry of china is growing with the CAGR of 17 %. In china food and beverage retail store is growing with 13% growth rate. The urban and rural people consumption growth rate is 55% & 37.5 % till 2026. The total growth in consumption is 7.1 % After the WTO 2005 agreement FDI is allowed in Retail store the major foreign player entered in the retail industry with merger and accusation. The industry came with many changes and developed new technology to improve the profit. The major existing player in retail sector is RT- MART , Carrefour and Wal Mart. All the player use different strategy to differentiate. Carrefour major focus is on the tier-2 cities and use the POP advertising method. Opposite this RT- Mart is focus on more advertising and Tier-1 cities The store location is existing on the highways and apart from crowded areas. People like to buy from high-way and outside market from the city
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Table of Content
1. History12 2. Geography of China....15 2.1. Topography of China19 2.2. Seasons in China.21 3. Economy Overview of China 22 3.1. Economic Overview.22 3.2. Growth rate of China..26 3.3. Foreign Exchange..27 3.4. Foreign Direct Investment .28 4. World Trade of China.29 4.1. China import export basket ..29 4.2. China Import trade..31 4.3. China export trade ..32 5. Major Challenge for Chinese economy33 5.1. Economical challenges 33 5.2. Other challenge ..33 5.3. Public interest ..33 5.4. Lack of rule of law .34 5.5. Government regulatory system..34 5.6. Pollution ..34 6. Industry Policies 35 6.1. Banking System 35 6.2. Undervalued Currency ..36 7. Transportation .37 7.1. Roads37 7.2. Rail Roads 38 7.3. Port and Shipping .38 7.4. Civil Aviation.38 8. Communication Media 39 8.1. Telephone .39 8.2. Broadcast39 9. Clothing in China .40 10. Festival in China ..41 11. Major Religion in China .42 12. Living Standard of China44 12.1. Tradional Way .44 12.1.1. Rich people 44 12.1.2. Poor People 45 12.1.3. Tradional Value 45
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13.
14. 15. 16.
17.
18. 19.
20.
12.2. Modern Way..46 12.2.1. Family Size ..47 12.3. Food ...47 12.4. Life style & Culture 47 Business Culture .49 13.1. Confucianism 49 13.2. Face .49 13.3. Meeting and Greeting 50 13.4. Build Relationship .50 13.5. Giffeting51 13.6. Meeting and Negotiation 51 Behaviour and Manners in China ..53 Business communication .54 Political System ..55 16.1. Peoples congress system ..55 16.2. Political consultative system .55 16.3. Multi Party Cooperation ..55 16.4. One country two System .57 16.4.1. Hong Kong Region 58 16.4.2. Macao Region .58 16.4.3. Taiwan Province 59 Company Law ..60 17.1. MOA and AOA..61 17.2. Prohibited acts for senior management ..62 17.3. Impact on FDI ..62 Packaging Law .64 Advertising Law .65 19.1. Comparative advertisement 65 19.2. False Advertisement .65 19.3. Major product advertisement 65 Environmental Law .66 20.1. Local Government ..68 20.2. International Community law .68 20.3. Grassroots Environmentalism.69 20.4. Enhancing the Legal System ..70
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Part2. Industry Analysis

1. 2. 3. 4. PESTAL Analysis74 Porter Five Force Model 76 Life-Cycle of Industry ..79 Major Facts of Industry..80 Rapid Growth ...80 5. Retail Formats ..85 6. Competitor Analysis .87 RT- Mart ...87 Carrefour .89 Wall Mart .91
Part3. Company Analysis

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Vision 94 Mission.. 94 Core Commitments 95 Philosophy 97 Financial Analysis 98 Profit Sharing.98 Sahara in Retail 99 SWOT Analysis ..101 Marketing Mix ..102 Distribution 105
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Part4. Marketing Pan for China

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Mission 107 Goal 107 Objective .107 Entry Strategy ..108 Location of stores..109 Marketing Mix .110 Store Design .116 BCG Matrix 117 Customer Service .118 USP of Q Shop 119 Budget Plan .122
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Part A-International Country Analysis
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1. History
China is a country with a very early civilization and a long and rich history. The compass, gunpowder, the art of paper-making and block printing invented by the ancient Chinese have contributed immensely to the progress of mankind. The Great Wall, Grand Canal and other projects built by the Chinese people are regarded as engineering feats in the world. Man has lived for a very long time in what is now China, according to archaeological finds. In many parts of the country, for instance, fossil remains of primitive ape men have been unearthed. Among them are the fossil remains of the Yuanmou Ape Man who lived in Yunnan Province some 1.7 million years ago. In 1840 China was gradually turned into a semi-feudal and semi-colonial country. In 1911 the revolution led by Dr. Sun Yat-sen overthrew the Qing Dynasty in 1911 and led to the founding of the Republic of China, thus putting an end to the more than 2,000 years of feudal, monarchic rule in China. In 1919 the May 4th Movement broke out to spearhead against imperialism and feudalism. The Communist Party of China was founded in 1921. After 1931, Japan stepped up its aggression against China. This triggered off the Anti-Japanese War six years later. For the second time the Communist Party and the Kuomintang Party entered into cooperation--this time to fight the Japanese invaders. The war dragged on for eight years until Japan surrendered in August 1945. In 1946, Chiang Kai-shek launched an all-out attack against the resistance forces led by the Chinese Communist Party. Chiang was defeated, and the Kuomintang regime was toppled in 1949. Chiang fled to Taiwan Island with his remnant troops. On October 1, 1949 the founding of the People's Republic of China was certified in Beijing. A new political and economic regime was instated, built on the pattern of Soviet society. During 1950s the government launch upon a tremendous economic and social indemnification. Steps were taken to restrain inflation, mending the economy and reconstructing the war-damaged industrial plants and regions. In the process the government acquired a tremendous support from its people. By the end of 1952, the country's industrial and agricultural production had attained record levels.
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On the proposal of Comrade Mao Zedong in 1952, the Central Committee of the Party advanced the general line for the transition period, which was to realize the country's socialist industrialization and socialist transformation of agriculture, handicrafts and capitalist industry and commerce step by step over a fairly long period of time. During the period of transition, the Party creatively charted a course for socialist transformation that suited China's specific conditions. In dealing with capitalist industry and commerce. By 1956, the socialist transformation of the private ownership of the means of production had been largely completed in most regions. But there had been shortcomings and errors. From the summer of 1955 onwards, the Party was overhasty in pressing on with agricultural co-operation and the transformation of private handicraft and commercial establishments; it was far from meticulous, the changes were too fast, and it did its work in a somewhat summary, stereotyped manner, leaving open a number of questions for a long time. In economic construction under the First Five-Year Plan (1953-1957), China likewise scored major successes through her own efforts and with the assistance of the Soviet Union and other friendly countries The First National People's Congress was convened in September 1954, and it enacted the Constitution of the People's Republic of China After the basic completion of socialist transformation, the Party led the entire people in shifting China's work to all-round, large-scale socialist construction. In the 10 years preceding the "cultural revolution" China achieved very big successes despite serious setbacks From the initiation of the "cultural revolution" to the Ninth National Congress of the Party in April 1969 The struggle waged by the Party and the people against "Left" errors and against the counter-revolutionary Lin Biao and Jiang Qing cliques during the "cultural revolution" was arduous and full of twists and turns, and it never ceased. Rigorous tests throughout the "cultural revolution" have proved that standing on the correct side in the struggle were the overwhelming majority of Members of the Eighth Central Committee of the Party and the Members it elected to its Political Bureau, Standing Committee and Secretariat. Party and state leaders will live forever in the memories of the Chinese people. It was through the joint struggles waged by the entire Party and the masses of workers, peasants, PLA officers and men, intellectuals, educated youth and cadres that the havoc wrought by the "cultural revolution" was somewhat mitigated. Some progress was made in China's economy despite tremendous losses. Grain output increased relatively steadily. Significant achievements were scored in industry, communications and capital construction and in science and technology.
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Before and after the convocation of the Third Plenary Session of the Eleventh Central Committee, the Party led and supported the large-scale debate about whether practice is the sole criterion for testing truth. The nationwide debate The CPC examined a large number of cases in the history of the Party in which the charges made against people had been false or exaggerated, or which had been dealt with incorrectly, and redressed the injustices that had been done. The Sixth Plenary Session of the Eleventh Central Committee held from June 27 to 29, 1981, examined and approved the "Resolution on Certain Questions in the History of Our Party since the Founding of the People's Republic of China." After basically finishing bringing order out of chaos, the CPC held the Twelfth National Congress in September 1982. It pointed out to "integrate the universal truth of Marxism with the concrete realities of China, blaze a path of our own and build socialism with Chinese characteristics." It began from rural areas to urban areas, from reform of the economic structure to restructuring on various aspects and from invigorating the domestic economy to opening China to the outside world. In May 1980 the CPC Central Committee and the State Council decided to establish four special economic zones in the cities of Shenzhen, Zhuhai, Shantou(Guangdong Province)and Xiamen(Fujian Province), which was the significant measure for China to use overseas funds and draw on advanced experience on technology and management from foreign countries. In May 1984 they decided to open another 14 coastal port cities. Other areas, such as the Yangtze River Delta, the Pearl River Delta, the southeast Fujian Province and the Bohai Sea Rim, were opened to the outside world for economic The governments of the People's Republic of China and the United Kingdom formally signed a joint declaration concerning the Hong Kong issues on December 19, 1984, in Beijing after two years' negotiations. The Joint Declaration states that the government of the People's Republic of China will resume the exercise of sovereignty over Hong Kong on July 1, 1997. This sets a good example for resolving the Macao issues. The governments of the People's Republic of China and the Portuguese Republic signed another joint declaration on April 13, 1987, in Beijing. The Joint Declaration states that the government of the People's Republic of China will resume the exercise of sovereignty over Macao on December 20, 1999. In 1997, China enjoyed a favorable international balance of payments, both on the current account and the capital account, and the country's national foreign exchange reserves reached 139.9 billion US dollars, with an annual increase of 34.9 billion US dollar
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2. Geography of China
Geography:
Location: Eastern Asia, bordering the East China Sea, Korea Bay, Yellow Sea, and South China Sea, between North Korea and Vietnam Area: 9,596,961 sq km Country comparison to the world: 4 Land: 9,569,901 sq km Water: 27,060 sq km Land boundaries: 22,117 km Regional borders: Hong Kong 30 km, Macau 0.34 km Coast line 14500km
Land use: Arable land: 14.86% Permanent crops: 1.27% Other: 83.87%
Climate: Extremely diverse; tropical in south to subarctic in north
Border countries: Afghanistan 76 km, Bhutan 470 km, Burma 2,185 km, India 3,380 km, Kazakhstan 1,533 km, North Korea 1,416 km, Kyrgyzstan 858 km, Laos 423 km, Mongolia 4,677 km, Nepal 1,236 km, Pakistan 523 km, Russia (northeast) 3,605 km, Russia (northwest) 40 km, Tajikistan 414 km, Vietnam 1,281 km Languages: Standard Chinese or Mandarin (Putonghua, based on the Beijing dialect), Yue (Cantonese), Wu (Shanghainese), Minbei (Fuzhou), Minnan (Hokkien-Taiwanese), Xiang, Gan, Hakka dialects, minority languages Natural resources Coal, iron ore, petroleum, natural gas, mercury, tin, tungsten, antimony, manganese, molybdenum, vanadium, magnetite, aluminium, lead, zinc, rare earth elements, uranium, hydropower potential (world's largest)
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Population:
1,343,239,923
Age structure
0-14 years: 17.6% (male 126,634,384/female 108,463,142) 15-64 years: 73.6% (male 505,326,577/female 477,953,883) 65 years and over: 8.9% (male 56,823,028/female 61,517,001) (2011)
Median age
Total: 35.5 years Male: 34.9 years Female: 36.2 years (2011)
Population growth rate: 0.481% (2011)

Birth rate: 12.31 births/1,000 population (2001) Death rate: 7.17 deaths/1,000 population (July 2011) Net migration rate: -0.33 migrant(s)/1,000 population (2011)
Urbanization:
Urban population: 47% of total population (2010) Rate of urbanization: 2.3% annual rate of change (2010)
Major cities - population

Shanghai 16.575 million; BEIJING (capital) 12.214 million; Chongqing 9.401 million; Shenzhen 9.005 million; Guangzhou 8.884 million (2009)
Sex ratio
At birth: 1.13 male(s)/female Under 15 years: 1.17 male(s)/female 15-64 years: 1.06 male(s)/female 65 years and over: 0.92 male(s)/female Total population: 1.06 male(s)/female (2011)
Infant mortality rate

Total: 15.62 deaths/1,000 live births Male: 15.38 deaths/1,000 live births Female: 15.9 deaths/1,000 live births (2011)
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Life expectancy at birth

Total population: 74.84 years Male: 72.82 years Female: 77.11 years (2011) Total fertility rate: 1.55 children born/woman (2011)
Major infectious disease

Degree of risk: intermediate Food or waterborne diseases: bacterial diarrheic, hepatitis A, and typhoid fever Vector borne diseases: Japanese encephalitis and dengue fever Soil contact disease: hanta viral hemorrhagic fever with renal syndrome (HFRS) Animal contact disease: rabies Highly pathogenic H5N1 avian influenza has been identified in this country; it poses a negligible risk with extremely rare cases possible among US citizens who have close contact with birds (2009)
Literacy
Total population: 92.2% Male: 96% Female: 88.5% (2007)
School life expectancy (primary to tertiary education)

Total: 12 years Male: 11 years Female: 12 years (2009)
Maternal mortality rate: 38 deaths/100,000 live births (2008)
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Languages:
Standard Chinese or Mandarin (Putonghua, based on the Beijing dialect), Yue (Cantonese), Wu (Shanghainese), Minbei (Fuzhou), Minnan (Hokkien-Taiwanese), Xiang, Gan, Hakka dialects, minority languages (see Ethnic groups entry) Mongolian is official in Nei Mongol, Uighur is official in Xinjiang Uygur, and Tibetan is official in Xizang (Tibet)
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2.1 Topography
Generalities
The topography of China have been divided by the government into 5 homogeneous physical macro-regions, namely Eastern China (subdivided into the northeast plain, north plain, and southern hills), Xinxiang-Mongolia, and the Tibetan-highlands It is diverse with snow-capped mountains, deep river valleys, broad basins, high plateaus, rolling plains, terraced hills, sandy dunes, craggy karats volcanic calderas low-latitude glaciers and other landforms present in myriad variations. In general, the land is high in the west and descends to the east coast. Mountains (33%), plateaus (26%) and hills (10%) account for nearly 70% of the country's land surface. Most of the country's arable land and population are based in lowland plains (12%) and basins (19%), though some of the greatest basins are filled with deserts. The country's rugged terrain presents problems for the construction of overland transportation infrastructure and requires extensive terracing to sustain agriculture but is conducive to the development of forestry mineral and hydropower resources and tourism.
River
China has 50,000 rivers total 420,000 kilometre in length and each having a catchment area of more than 100 square kilometres. About 1,500 of these rivers have catchment areas exceeding 1,000 square kilometres. The majority of rivers flow west to east and empty into the Pacific Ocean. The Yangzi is 6,300 kilometres long and has a catchment area of 1.8 million square kilometres. This makes it the third longest river in the world after the Amazon and the Nile the second longest river in China is the Huang He (Yellow River). It has a catchment area of 752,000 square kilometres. The Heilongjiang (Heilong or Black Dragon River) flows for 3,101 kilometres in Northeast China and an additional 1,249 in Russia, where it is known as the Amur. The longest river in South China is the Zhejiang (Pearl River), which is 2,214 kilometres long. Along with its three tributaries, the Xi, Dong, and BeiWest, East, and Northrivers, it forms the rich Pearl River Delta near Guangzhou, Zhuhai, Macau, and Hong Kong. Other major rivers are the Liaohe in the northeast, Haihe in the north, Qiantang in the east, and Lancang in the southwest.
Geology and natural resources

China has substantial mineral reserves and is the worlds largest producer of antimony natural graphite, tungsten, and zinc. Other major minerals are aluminium, bauxite, coal, crude petroleum, diamonds, gold, iron ore, lead, magnetite, manganese, mercury, molybdenum, natural gas,phosphate rock, tin, uranium, and vanadium. With its vast mountain ranges, Chinas hydropower potential is the largest in the world.
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Land use
Based on 2005 estimates, 14.86% (about 1.4 million km) of Chinas total land area is arable About 1.3% (some 116,580 km) is planted to permanent crops and the rest planted to temporary crops. With comparatively little land planted to permanent crops, intensive agricultural techniques are used to reap harvests that are sufficient to feed the worlds largest population and still have surplus for exports. An estimated 544,784 km of land were irrigated in 2004. 42.9% of total land area was used as pasture and 17.5% was forest
Wildlife
China lies in two of the world's major eco-zones the Palaearctic and the IndoMalaya In the Palaearctic zone are found such important mammals as the horse, camel, and jerboa. Among the species found in the Indo-Malaya region are the Leopard Cat, bamboo rat, tree-shrew, and various other species of monkeys and apes. Some overlap exists between the two regions because of natural dispersal and migration, and deer or antelope, bears, wolves, pigs, and rodents are found in all of the diverse climatic and geological environments. The famous giant panda is found only in a limited area along the Chang Jiang. There is a continuing problem with trade in endangered species, although there are now laws to prohibit such activities.
Atmosphere and Climate

The climate of China is extremely diverse; Tropical in the south to subarctic in the north. Monsoon winds, caused by differences in the heat-absorbing capacity of the continent and the ocean, dominate the climate. Alternating seasonal air-mass movements and accompanying winds are moist in summer and dry in winter. The advance and retreat of the monsoons account in large degree for the timing of the rainy season and the amount of rainfall throughout the country. Tremendous differences in latitude, longitude, and altitude give rise to sharp variations in precipitation and temperature within China. Although most of the country lies in the temperate belt, its climatic patterns are complex. Parts of China's northernmost province Heilongjiang has a subarctic climate; its southernmost part, Hainan Island (an island away from mainland China), has a tropical climate. Temperature differences in winter are great, but in summer the diversity is considerably less. Precipitation varies regionally even more than temperature. The part of China south of the Qin Mountains experiences abundant rainfall, often above 1,000 millimetres (39 in), most of it coming with the monsoon during summer and late spring. To the north and west of the range, however, rainfall is uncertain. The farther north and west one moves, the scantier and more uncertain it becomes. The northwest has the lowest annual rainfall in the country and hardly any precipitation in its desert areas. China experiences frequent typhoon (about five per year along southern and eastern coasts), damaging floods, monsoons, tsunamis, dust storms, and droughts.
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2.2Season in China
Season Spring Summer Autumn -Winter * -
Division points Beginning of Spring Rain Water Waking of Insects Vernal Equinox Pure Brightness Grain Rain Beginning of Summer Grain Budding Grain in Ear Summer Solstice Slight Hea Great Heat Beginning of Autumn Linit of Heat White Dew Autumnal Equinox Cold Dew Frosts Descent Beginning of Winter Slight Snow Great Snow Winter solstice Slight Cold Great Cold
Solar calendar 4-5 Feb 19-20 Feb 5-6 Mar. 20-21Mar. 5-6 April 20-21 April 5-6 May 21-22 May 6-7 Jun 21-22 Jun 7-8 July 23-24 July 7-8 Aug 23-24 Aug 7-8 Sep 23-24 Sep 8-9 Oct 23-24 Oct 7-8 Nov 22-23 Nov 7-8 Dec 22-23 Dec 5-6 Jan 20-21 Jan
Ecliptic (degree) 315 330 345 0 15 30 45 60 75 90 105 120 135 150 165 180 195 210 225 240 255 270 285 300
Significance Spring begins The amount of rain increases The hibernated animals are awoken by the spring thunder The sun shines above the Equator and the day and night go halves Pure and bright; trees and grass thriving The rainfall begins to increase and grains grow well Summer begins Grains begin to be in the milk Any crops like wheat begin to ripe The sun shines above the Tropic of Cancer and the day reaches its longest time Hot The hottest time Autumn begins summer-heat begin to die down Getting cold and dews begin to show up in the morning The sun shines above the Equator and the day and night go halves Getting colder and the morning dew is very cool Getting colder and frost begin to show up Winter begins Slight snowfalls Great snowfalls Sun shines above the Tropic of Capricorn and the day reaches its -shortest time Cold Extremely cold
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3. Economy in China
3.1Economic Overview:
Since the late 1970s China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, creation of a diversified banking system, development of stock markets, rapid growth of the private sector, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors it considers important to "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, in July 2005 China revalue its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the Renminbi(China Currency) against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2010 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceed those of the US; China is second to the US in the value of services it produces. Still, per capita income is below the world average. The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic demand; (b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2011 more than 250 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and Launch of Q Shop in China By: Ajit Singh Rathore Page 22
alternative energy development. In 2010-11, China faced high inflation resulting largely from its credit-fuelled stimulus program. Some tightening measures appear to have controlled inflation, but GDP growth consequently slowed to near 9% for 2011. An economic slowdown in Europe is expected to further drag Chinese growth in 2012. Debt overhang from the stimulus program, particularly among local governments, and a property price bubble challenge policy makers currently. The government's 12th Five-Year Plan, adopted in March 2011, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent on exports in the future. However, China has made only marginal progress toward these rebalancing goals
GDP Purchasing Power Parity: $11.44 trillion (2011) Country comparison to the world: 3 $10.48 trillion (2010) $9.486 trillion (2009) GDP Official exchange rate: $7.298 trillion
GDP Per capita (PPP): $8,500 (2011 ) country comparison to the world: 121 $7,800 (2010) $7,100 (2009 )
GDP Composition by sector: Agriculture: 10.1% Industry: 46.8% Services: 43.1%
Distribution of family income - Gini index 48 (2009) country comparison to the world: 27 54.2% of GDP (2011) country comparison to the world: 1
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Labour Force: Agriculture: 36.7% Industry: 28.7% Services: 34.6%
Labour force 79.5 million Country comparison to world :1
Unemployment Rate: 6.5% (2011) Country comparison to the world: 70
Population below poverty line: 13.4% Household income or consumption by percentage share: Lowest 10%: 3.5% Highest 10%: 15%
Budget: revenues: $1.646 trillion Expenditures: $1.729 trillion Inflation Rate: 5.5%(2011) 3.3% (2010)
Country comparison in world: 142 Central bank discount rate: 2.25% Country comparison to the world: 100
Commercial bank prime lending rate 6.56% (2011) 5.81% (2010)
Country comparison to the world: 144
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Budget surplus (+) or deficit (-): -1.1% of GDP (2011) Country comparison to the world: 62
Public debt: 43.5% of GDP (2011) country comparison to the world: 72 43.5% of GDP (2010) Tier rating:
Tier 2 Watch List China does not fully comply with the minimum standards for the elimination of trafficking and did not demonstrate evidence of significant efforts to address all forms of trafficking or effectively protect victims; however, China has increased its attention to trafficking of women and children nationwide; China continues to lack a formal, nationwide procedure to systematically identify victims of trafficking (2008)
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3.2Chinas Average Annual Real GDP Growth

Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012( first quarter) Real Growth Rate 8.4 8.3 9.1 10.0 10.1 11.3 12.7 14.2 9.6 9.2 10.4 9.2 8.1
Real Growth Rate

16 14 12 10 8 6 4 2 0
Real Growth Rate
2012( first quarter)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
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3.3Economic crisis:
Chinas economy suffered economic downturns during the leadership of Chairman Mao Zedong, including during the Great Leap Forward from 1958-1960 (which led to a massive famine and reportedly the death of tens of millions of people) and the Cultural Revolution from 1966-1976 (which caused political chaos and greatly disrupted the economy) The global economic crisis that began in 2008 significantly affected Chinas economy. Chinas real GDP growth fall from 14.2% to 9.6%.Chinas exports, imports, and FDI inflows declined, GDP growth slowed, and millions of Chinese workers reportedly lost their jobs. The Chinese government responded by implementing a $586 billion economic stimulus package, loosening monetary policies to increase bank lending, and providing various incentives to boost domestic consumption. Such policies enabled China to effectively weather the effects of the sharp global fall in demand for Chinese products, while several of the worlds leading economies experienced negative or stagnant economic growth.
3.4 Foreign Exchange

In recent years, China's foreign exchange reserves have achieved spectacular growth, attracting wide attention both at home and abroad. Since 2001, China's foreign exchange reserves have been growing rapidly. By the end of February 2006, China's official foreign exchange reserves had reached $ 853.60 billion, which surpassed Japan's $ 850.1 billion for the first time, becoming the worlds largest holder of foreign exchange reserves. By the end of 2006, China's foreign exchange reserves had reached $ 1.0663 trillion, becoming the first country whose national foreign exchange reserves was over one trillion U.S. dollars. China's foreign exchange reserves have been ranked first in the world for five on seductive years. China's total foreign exchange reserves had increased from $ 212.17 billion by the end of 2001 to $ 3,181.15 billion by the end of the year 2011. The total amount of foreign exchange reserves has increased about 14 times just in ten years. The substantial increase of China's foreign exchange reserves has aroused a discussion of domestic scholars on its management
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3.5 Foreign Direct Investment (FDI) in China

Chinas trade and investment reforms and incentives led to a surge in FDI beginning in the early 1990s. Such flows have been a major source of Chinas productivity gains and rapid economic and trade growth. There were reportedly 445,244 foreign-invested enterprises (FIEs) registered in China in 2010, employing 55.2 million workers or 15.9% of the urban workforce. FIEs account for a significant share of Chinas industrial output. That level rose from 2.3% in 1990 to a high of 35.9% in 2003, but fell to 27.1% by 2010.18 In addition, FIEs are responsible for a significant level of Chinas foreign trade. In 2011, FIEs in China accounted for 52.4% of Chinas exports and 49.6% of its imports, although this level was down from its peak in 2006 when FIEs share of Chinese exports and imports was 58.2% and 59.7%, FIEs in China dominate Chinas high technology exports. From 2002 to 2010, the share of Chinas high tech exports by FIEs rose from 79% to 82%. During the same period, the share of Chinas high tech exports by wholly owned foreign firms (which excludes foreign joint ventures with Chinese firms), rose from 55% to 67%
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4. China Merchandise World Trade
Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Export 266.2 325.6 438.4 593.4 762 969.1 1218 1428.9 1202 1578.4 1899.3
Import 243.6 295.2 412.8 561.4 660.1 791.5 955.8 1131.5 1003.5 1393.9 1741.4
Trade Balance 22.6 30.4 25.6 32 101.9 177.6 262.2 297.4 198.5 184.5 157.9
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Country
Estimate Cumulative Utilized FDI :1979-2011 Amount 1224 533.2 111.8 79.9 68.1 58.7 53.4 49.9
Total Hong Kong British Virgin islands Japan United State Taiwan Singapore South Korea
% of total 100 43.5 9.1 6.5 5.6 4.8 4.5 4.1
Utilized FDI in 2011 Amount 116.1 77 NA 6.3 3 6.7 6.3 2.6
% of total 100 66.3 NA 5.4 2.6 5.8 5.4 2.2
FDI IVESTMENT IN CHINA
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4.2CHINA EXPORTS:
China exports were worth 177.97 Billion USD in August of 2012. Historically, from 1990 until 2012, China Exports averaged 49.76 Billion USD reaching an all time high of 181.10 Billion USD in May of 2012 and a record low of 2.84 Billion USD in January of 1990. Export growth has continued to be a major component supporting China's rapid economic growth. Exports of goods and services constitute 39.7% of its GDP. China major exports are: office machines & data processing equipment, telecommunications equipment, electrical machinery and apparel & clothing. Chinas largest exports markets are European Union, United States, Hong Kong, Japan and South Korea. This page includes a chart with historical data for China Exports.
Description World Electrical machinery (such as computers and parts) Machinery Knit apparel Woven apparel Optical, photographic, cinematographic, measuring checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof Furniture and bedding Iron and steel products Vehicles, except railway (mainly auto parts, motorcycles, trucks, and bicycles) Plastic Ships and boats
$ billion
Percentage of total 1899.3 100 1,899.30 23.5 445.8 353.9 80.2 63.1 60.7 18.6 4.2 3.3 3.2
2011/2010% Change 20.3 14.6 14.2 20.2 16 16.5
59.4 51.2 49.6
3.1 2.7 2.6
17.3 30.8 29.2
45.5 2.4 43.7 2.3 China Export Basket
30.9 8.5
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4.3China Import:
China imports were worth 151.31 Billion USD in August of 2012. Historically, from 1990 until 2012, China Imports averaged 43.17 Billion USD reaching an all time high of 162.40 Billion USD in May of 2012 and a record low of 2.57 Billion USD in January of 1990. China imports mainly commodities: iron and steel, oil and mineral fuels as well as machinery and equipment, plastics, optical and medical equipment and organic chemicals. Chinas main imports partners are: Japan, European Union, South Korea, Taiwan and ASEAN countries. This page includes a chart with historical data for China Imports
Description World Electrical machinery Mineral fuel, oil etc. Machinery Ores, slag, and ash Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof Plastic Vehicles, not railway (mainly autos and parts) Organic chemicals Copper and articles thereof Special Classification
$ billion 1741. 4 351.0 0 273.5 199.6 150.7 99
Percentage of total 100 20.2 15.7 11.5 8.7 5.7
2011/2010% Change 24.9 11.6 45.2 15.8 39.5 10.4
70.2 65.3 63.2 54.3 49.5
4 3.8 3.6 3.1 2.8
10.2 32.2 31 18 168.5
China Import Basket
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5. Major Long-Term Challenges Facing by the Chinese Economy

Chinas economy has shown remarkable growth over the past several years, and many economists project that it will enjoy fairly healthy growth in the near future. However, economists caution that these projections are likely to occur only if China continues to make major reforms to its economy. Failure to implement such reforms could endanger future growth. They note that Chinas current economic model has resulted in a number of negative economic (and social) outcomes, such as over-reliance on fixed investment and exporting for its economic growth, extensive inefficiencies that exist in many sectors (due largely to government industrial policies), wide-spread pollution, and growing income inequality, to name a few. Many of Chinas economic problems and challenges stem from its incomplete transition to a free market economy and from imbalances that have resulted from the governments goal of economic growth at all costs. Chinas Incomplete Transition to a Market Economy Despite Chinas three-decade history of widespread economic reforms, Chinese officials contend that China is a socialist-market economy. This appears to indicate that the government accepts and allows the use of free market forces in a number of areas to help grow the economy, but where the government still plays a major role in the countrys economic development.
5.2Other Challenges
Chinas economy faces a number of social and political challenges as well:
5.3 Public Interest

For Chinas Communist Party leadership is a growing economys main source of political legitimacy. However, every year numerous protests occur in China over a number of issues, including pollution, government corruption, and land seizures. A number of protests in China have stemmed in part from frustrations among many Chinese (especially peasants) that they are not benefitting from Chinas economic reforms and rapid growth, and perceptions that those who are getting rich are doing so because they have connections with government officials. A 2005 United Nations report stated that the income gap between the urban and rural areas was among the highest in the world and warned that this gap threatens social stability. The report urged China to take greater steps to improve conditions for the rural poor, and bolster education, health care, and the social safety net.56 It is estimated that 300 million people in China (mainly in rural areas) lacked health insurance, and many that do have basic insurance must pay a significant amount of medical expenses out of their own pocket.
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5.4 The lack of the rule of law

China has led to widespread government corruption, financial speculation, and misallocation of investment funds. In many cases, government connections, not market forces, are the main determinant of successful firms in China. Many U.S. firms find it difficult to do business in China because rules and regulations are generally not consistent or transparent, contracts are not easily enforced, and intellectual property rights are not protected (due to the lack of an independent judicial system). The relative lack of the rule of law and widespread government corruption in China limit competition and undermine the efficient allocation of goods and services in the economy.
5.5 Poor government regulatory environment

China maintains a weak and relatively decentralized government structure to regulate economic activity in China. Laws and regulations often go unenforced or are ignored by local government officials. As a result, many firms cut corners in order to maximize profits. This has lead to a proliferation of unsafe food and consumer products being sold in China or exported abroad. Lack of government enforcement of food safety laws led to a massive recall of melamine-tainted infant milk formula that reportedly killed at least four children and sickened 53,000 others in 2008.
5.6 Pollution in China

An estimate 63% of chinas energy comes from coal which contributes significantly to air population and carbon emissions. China is world second largest consumption of world. Economic growth is placing a heavy burden on chinas water resource quantitative & qualitative terms. The current net water deficit is around 40 billion m3. Water pollution exacerbates this situation and is leading to the extinction of species and serious and sometimes irreversible degradation of ecosystem. It seems mainly from industrial and municipal sources, water scarcity problem are being addressed through water engineering project, but improved management of available water resources is required.
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6. Industrial Policies and SOEs

According to the World Bank, China has become one of the worlds most active users of industrial policies and administrations. 38 According to one estimate, Chinas SOEs may account for up of 50% of non-agriculture GDP.39 In addition, although the number of SOEs has declined sharply, they continue to dominate a number of sectors (such as petroleum and mining, telecommunications, utilities, transportation, and various industrial sectors); are shielded from competition; are the main sectors encouraged to invest overseas; and dominate the listings on Chinas stock indexes. One study found that SOEs constituted 50% of the 500 largest manufacturing companies in China and 61% of the top 500 service sector enterprises. It is estimated that there were 154,000 SOEs as of 2008, and while these accounted for only 3.1% of all enterprises in China, they held 30% of the value of corporate assets in the manufacturing and services sectors. Of the 58 Chinese firms on the 2011 Fortune Global 500 list.
6.1The Banking System

Chinas banking system is largely controlled by the central government, which attempts to ensure that capital (credit) flows to industries deemed by the government to be essential to Chinas economic development. SOEs, which are believed to receive preferential credit treatment by government banks, While private firms must often pay higher interest rates or obtain credit elsewhere. According to one estimate, SOEs accounted for 85% ($1.4 trillion) of all bank loans in 2009 In addition; the government sets interest rates for depositors at very low rates, often below the rate of inflation, which keeps the price of capital relatively low for firms. It is believed that oftentimes SOEs do not repay their loans, which may have saddled the banks with a large amount of non-performing loans. In addition, local governments are believed to have borrowed extensively from state banks shortly after the global economic slowdown began to impact the Chinese economy to fund infrastructure and other initiatives. Some contend these measures could further add to the amount of non-performing loans held by the banks.
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6.2 An Undervalued Currency:

China does not allow its currency to float and therefore must make large-scale purchases of dollars to keep the exchange rate within certain target levels. Although the renminbi (RMB) has appreciated against the dollar in real terms by about 40% since reforms were introduced in July 2005, analysts contend that it remains highly undervalued. Chinas undervalued currency makes its exports less expensive, and its imports more expensive, than would occur under a floating exchange rate system. In order to maintain its exchange rate target, the government must purchases foreign currency (such as the dollar) by expanding the money supply. This makes it much more difficult for the government to use monetary policy to combat inflation. Many economists argue that Chinas industrial policies have sharply limited competition and the growth of the private sector, caused over-capacity in many industries, and distorted markets by artificially lowering the costs of various factor costs (such as capital, water, land, and energy) below market levels in order to promote targeted industrial sectors. Such policies have come at the expense of other (non-industrial) sectors of the economy, such as services.
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7. Transportation in China 7.1 Roads:

In 2005 China had a total road network of more than 3.3 million kilometers, although approximately 1.47 million kilometers of this network are classified as village roads. Paved roads total 770,265 kilometers in 2004; the remainder were gravel, improved earth standard, or merely earth tracks. Highways (total130,000 kilometers) were critical to Chinas economic growth as it worked to mitigate a poor distribution network and authorities sought to spur economic activity directly. All major cities are expected to be linked with a 55,000-kilometer interprovincial expressway system by 2020. The highway and road systems carried nearly 11.6 billion tons of freight and 769.6 trillion passenger/kilometers in 2003. The importance of highways and motor vehicles, which carry 13.5 percent of cargo and 49.1 percent of passengers, was growing rapidly in the mid-2000s. Road usage has increased significantly, as automobiles, including privately owned vehicles; rapidly replace bicycles as the popular vehicle of choice in China. In 2002, excluding military and probably internal security vehicles, there were 12 million passenger cars and buses in operation and 8.1 million other vehicles. In 2003 China reported that 23.8 million vehicles were used for business purposes, including 14.8 million passenger vehicles and 8.5 million trucks. The latest statistics from the Beijing Municipal Statistics Bureau show that Beijing had nearly 1.3 million privately owned cars at the end of 2004 or 11 for each 100 Beijing residents. Beijing currently has the highest annual rate of private car growth.
7.2 Railroads:
Railroads are the major mode of transportation in China. Carrying some 24 percent of the worlds railroad transportation volume, Chinas railroads are critical to its economy. Because of its limited capital, overburdened infrastructure, and need to continually modernize, the rail system, which is
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controlled by the Ministry of Railways through a network of regional divisions, operates on an austere budget. Foreign capital investment in the freight sector was allowed beginning in 2003, and international public stock offerings are to be opened in 2006. In another move to better capitalize and reform the railroad system, the Ministry of Railways established three public shareholder-owned companies in 2003: China Railways Container Transport Company, China Railway Special Cargo Service Company, and China Railways Parcel Express Company
7.3 Ports and Shipping

China's coastal ports enable the transportation of coal, containers, imported iron ore, and grain; roll-on-rolloff operations between mainland and islands; and deep-water access to the sea. In port construction, China has especially strengthened the container transport system, concentrating on the construction of a group of deep-water container wharves at Dalian, Tianjin, Qingdao, Shanghai, Ningbo, Xiamen and Shenzhen, and thus laying the foundations for China's container hubs. The coal transportation system has been further strengthened with the construction of a number of coal transport wharves. In addition, wharves handling crude oil and iron ore imports have been reconstructed or expanded. At the end of 2004, China's coastal ports had over 2,500 berths of medium size or above, of which 650 were 10,000-ton-class berths; their handling capacity was 61.5 million standard containers for the year, ranking first in the world. Freight volumes handled by some large ports exceed 100 million tons a year; and the Shanghai, Shenzhen, Qingdao, Tianjin, Guangzhou, Xiamen, Ningbo and Dalian have been listed among the world's top 50 container ports.
7.4 Civil aviation:

At the end of 2004, China had 133 airports for civil flights. In 2004, the turnover of airfreight reached 7.18 billion ton-km, the passenger turnover was 178.2 billion person-km, and the volume of freight traffic 2.767 million tons. China had a total of 1,279 civil flight routes, 1,035 of them domestic routes reaching all large and medium-sized cities, and 244 of them international, connecting China with more than 70 cities overseas.
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8. Communication Medium 8.1 General assessment:

Domestic and international services are increasingly available for private use; unevenly distributed domestic system serves principal cities, industrial centres, and many towns; China continues to develop its telecommunications infrastructure, and is partnering with foreign providers to expand its global reach; China in the summer of 2008 began a major restructuring of its telecommunications industry, resulting in the consolidation of its six telecom service operators to three, China Telecom, China Mobile and China Unicom, each providing both fixed-line and mobile services Domestic: interprovincial fibber-optic trunk lines and cellular telephone systems have been installed; mobile-cellular subscribership is increasing rapidly; the number of Internet users exceeded 250 million by summer 2008; a domestic satellite system with 55 earth stations is in place International: country code - 86; a number of submarine cables provide connectivity to Asia, the Middle East, Europe, and the US; satellite earth stations 7 (5 Intelsat - 4 Pacific Ocean and 1 Indian Ocean; 1 Inter sputnik - Indian Ocean region; and 1 Inmost - Pacific and Indian Ocean regions) (2008) Telephones - mobile cellular: 986.253 million (2011) country comparison to the world: 1
Telephones - main lines in use: 285.115 million (2011) country comparison to the world: 1
8.2 Broadcast media

All broadcast media are owned by, or affiliated with, the Communist Party of China or a government agency; no privately-owned TV or radio stations; state-run Chinese Central TV, provincial, and municipal stations offer more than 2,000 channels; the Central Propaganda Department lists subjects that are off limits to domestic broadcast media with the government maintaining authority to approve all programming; foreign-made TV programs must be approved prior to broadcast (2008)
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9. Clothing in china
Today, Fashion designers use a mixture of traditional and modern ideas to create new fashions. These new fashions also incorporate age-old motifs such as guardian deities, lions, and masks of Chinese opera characters. Chinese bronze is another source of printed, woven, embroidered, and applied design for clothes. Some of the distinctive designs include dragons, phoenixes, clouds, and lightning. Motifs from traditional Chinese painting also end up in woven or printed fashion designs In modern society, men are seen at social occasions wearing the dignified and refined traditional Chinese long gown, and women often wear the ch'i-p'ao, a modified form of a traditional Ching Dynasty fashion, on formal occasions. The variations of height length, width, and ornamentation of the collar, sleeves, skirt, and basic cut of this Oriental fashion are limitless. Many accessories such as macram are used to decorate shoulders, bodices, pockets, seams, and openings of clothing, as well as belts, hair ornaments, and necklaces. Some successful examples of combinations of modern and traditional fashion elements are the modern bridal tiara, based on a Sung Dynasty design and the Hunan Province style of embroidered sash made in the traditional colors of pure red, blue, and green. From these examples, it can be seen how traditional Chinese dress is the foundation of modern fashion. However, the Chinese have also adopted many Western styles of clothing such as business suits and jeans.
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10. Festival in China

China Festival Spring Festival Lantern Festival Qingming festival Dragon Boat festival Double Seventh Festival Mid Autumn Festival Double Ninth Festival Winter Solstice Festival
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11. Major Religion in China

Buddhism
Buddhism was introduced to China around the first century A.D. Since the fourth century A.D, it was widely spread and gradually became the most influential religion in China. Buddhism in China is divided into three branches according to varied language families, namely, Chinese Buddhism, Tibetan Buddhism and Pali Buddhism and there are about 200 thousand Buddhist monks and nuns under these three branches. At present, there are more than 13 thousand Buddhist temples that are open to the public, 33 Buddhist colleges and nearly 50 types of Buddhist publications in China. As one branch of Buddhism in China, Tibetan Buddhism is mainly spread in Chinas Tibet Autonomous Region, Inner Mongolia Autonomous Region and Qinghai Province with some 7 million believers from Tibetan, Mongolian, Yugu, Monba, Luoba and Tu nationalities. Pali Buddhism is popular in Xishuangbanna Dai Autonomous Prefecture, Dehong Dai and Jingpo Autonomous Prefecture and Simao region in south western Chinas Yunnan Province with over one million believers from Dai, Bulang, Achang and Va nationalities. The believers of Chinese Buddhism are mainly Han people, who live all over China.
Taoism
Taoism is a typically traditional religion in China with a history of more than 18 hundred years since the second century A.D. It advocates the worship of natural objects and ancestors as was practiced since time immemorial and had various factions in the history; later, it evolved into two major factions, namely, Quanzhen and Zhengyi Taoism, and was fairly influential among Han people. It is difficult to calculate the exact number of Taoist believers because there are no formal ceremonies or specific regulations concerning the admission to Taoism. At present, there are more than 15 hundred Taoist temples in China with over 25 hundred male and female Taoists there.
Islam
Islam was introduced to China in the seventh century A.D with nearly 18 million believers from Hui, Uygur, Tartar, Kirgiz, Kazakh, Ozbek, Dongxiang, Sala and Baoan nationalities. Most of the Muslims in China live in compact communities in Xinjiang Uygur Autonomous Region, Ningxia Hui Autonomous Region, Gansu, Qinghai and Yunnan Provinces; besides, some Muslims in small groups live in other provinces or cities in China. At present, there are more than 30 thousand mosques in China with over 40 thousand imams or ahungs
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Catholicism
Catholicism was first introduced to China in the seventh century and widely spread across the country after the Opium War in 1840. At present, Chinese Catholic Church boasts one hundred parishes, some five million believers, nearly five thousand cathedrals and places for religious activities and twelve theological seminaries. Over the past two decades, the Catholic Church in China have cultivated more than 15 hundred young bishops who are able to hold consecration and among them over one hundred have been sent abroad for further study. In addition, three thousands young girls have been crowned the nun hood after their admission and two hundred nuns have decided to dedicate all their lives to the church. Every year, more than 50 thousand clerics from the Chinese Catholic Church preside over baptism and the church prints over three million copies of Bible.
Christianity
Christianity was introduced to China in early 19th century and widely spread after 1840s. In 1950, the church called on its believers to shake off the vestige of foreign imperialist influence and uphold patriotism in order to achieve self-administration, self-supporting and self-propagation, which are the cardinal principle of Chinese Christianity. At present, there are about ten million Christian believers, 18 thousand priests and 12 churches or religious sites in China.
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12. Living Standard of China

The Chinese Way of Life is quite unique and very different from that of Western cultures in both Traditional and Modern China.
12.1 Traditional Way of Life

Like all societies of the past, Traditional China had a very distinct class system. There was a very wealthy upper class as well as a poor, peasant class, and each lived their own separate ways.
12.1.1 Rich People

In ancient China, it was very easy to tell who was rich. From head to toe, the wealthiest had the finest clothes. Members of the royal family and high-ranking officials dangled jade, gold, or silver bracelets from their arms. They ate more and better-tasting food and had more leisure time. China's richest man was the emperor. During the Ming and Qing dynasties, the emperor lived in the Forbidden City, the 9,999-building Imperial Palace. The empress' palace was called the Palace of Terrestrial Tranquility, while the emperor's was known as the Palace of Celestial Purity. No one could enter the Gate of Celestial Purity except the emperor. The empress, her female servants, and other members of her royal household lived in palaces behind the gate, but they couldn't enter or exit through the same gate as the emperor. Although fashions in men's and women's clothes changed over time, the fabric they were made of did not. The rich wore silk. It was a status symbol and in some dynasties only the rich were allowed to wear it. During the Qing Dynasty, men and women wore robes tied at the waist with a large sash. Wealthy women wore silk slippers with wooden shoes. The practice of binding the feet of young girls with long strips of cloth began among the rich during the Song Dynasty. Foot binding stopped the growth of the feet and was very painful. Tiny feet forced women to take small steps. Because small feet were admired, foot binding spread to other classes of society. However, farm girls, who were needed in the fields, escaped this torture. The custom died out in the early 1900's.
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12.1.2 Peasant Poor

While the rich lived a life of ease, the poor worked very hard. Few could read or write. Most were farmers, living on small plots of land. Some owned their land, but other worked for rich landowners, giving them part of each harvest. Poor families sometimes sold their daughter to be servants of the rich. Even in good times, farmer kept little of their crops. Their work helped feed everyone else in society. When crops failed because of drought or floods, farmers risked losing their land. In Northern China, the poor ate wheat noodles, steamed bread, and bean curd. In the south, rice was the staple of the diet. Meals that included meat were rare. The poor ate their food in small bowls. Along with their meals they drank green tea. In the dry, colder north, the farmer's main crops were millet, wheat, and barley. In the warmer, wetter south, farmers grew rice in flooded fields called paddies. While a rich person's house was often made of wood with a tiled roof, the poor made do with mud and straw. A sunken pit in the centre of the house held a heating and cooking fire. Many built their houses partially underground to keep them warmer in the winter. Workers did not have to worry about getting enough exercise. With few tools to help them with their chores, they did most jobs by hand or by foot. Some spent long hours pushing pedals which turned a large wheel that brought water up a wooden channel and into the fields. As for clothing, women wore simple wool garments in winter and cotton in summer. They never wore silk. Peasant men wore baggy pants made of hemp with a loose cotton shirt. Both wore shoes made of straw. Once children were old enough to walk, they wore child-size versions of their parents' clothes.
12.1.3 Traditional Values

Family life has always been extremely important to Chinese culture as Chinese lived in large family units. As many as 100 or more relatives lived together under the rule of the oldest male. The ideal was "four generations under one roof." However, those who lived this way were mainly families of rich rural landowners, wealthy merchants, and government officials. Among the common people, most households consisted of only parents and children, but some also included grandparents and uncles. Chinese families traditionally valued sons far more than daughters. A husband could divorce his wife if she failed to give birth to sons. In some cases, daughters were killed at birth because they were considered useless, for females could not continue the family name. Only men were expected to work outside the home as wives stayed home to do housework, cook, and attend to the children.
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Relationships within families were extremely formal in Traditional China. Family honor was emphasized greatly as members of the family, especially of the younger generation, were expected to "know their place" in society and to give the family name a good reputation. Parents also expected their children to show unquestioning obedience. A father could legally kill his children if they disobeyed him. Marriages were arranged by parents, much of which were decided when the children were infants. Most brides and grooms did not see or know each other until the wedding day
12.2 Modern Way

Today, the way of life in China is not different at all from anywhere else in the world due to Western influence. Today modern apartment is complexes and towering high-rise buildings as well as modern style homes. However, tradition still lingers in all Chinese households and societies all over the world. In older neighborhoods, rural mud and straw houses can still be seen, and in rural areas the traditional way of life are still very alive. And although the way of life now is much modernized, traditional values of family importance and reputation still is felt by all families. Today, the Chinese live in smaller family units, usually only with parents and children, and sometimes grandparents. Almost all adults have a job, male or female. In many families, a grandparents looks after the house and children during the day, and more and more children attend nursery school and kindergarten so that mothers can be free to work. Today, girls as well as boys are valued. Women now do many kinds of work outside the home. Many young households share in the shopping, housecleaning, cooking, and caring for the children to show that they believe the sexes are equal. Some of the older generations may still show slight hope for a grandson or great-grandson and disappointment if the outcome is a granddaughter, but in the end they love and value each with equality. However, equality between the sexes is more widely accepted in the cities than in the countryside. Relationships have become more democratic as parents no longer expect their children to show unquestioning obedience; however, most Chinese parents today, although much more lenient and reasonable, still are strict and expect a good deal of respect. As for marriage, young people today generally choose their own marriage partners on the basis of shared interests and mutual attraction. However, parents still play a role in arranging some marriages, especially in rural areas. Any couple today would at least consult their parents about such a major decision.
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12.2.1Traditional Lifestyle of Chinese People

Chinese Family Concept The traditional Chinese way of life, in theory, advocates the harmony among the individual, the family and society. In traditional Chinese culture, the family is the basic unit of society, while individuals are only one part of the family. The blood relationship is the most important element of society. The "four generations under one roof" meant the cohabitation of the father and mother, son and daughter-in-law (or daughter and son-in-law), grandson and granddaughter-in-law, the great-grandson and the great-granddaughter. While modern families normally include only two generations living together, the tradition and the ideal of four generations living together still remains. The idea of tracing back ancestry is still the most powerful centripetal force of the Chinese nation. A distinguished ancestor will bring pride to his descendants for thousands of years. The many descendants of eminent leaders will not sully the name of their ancestors no matter what the consequences. Thus the harmony and stability of families and clans are the assurance of peace and the advancement of society.
12.2.2 Food
As thousands of years of development, Chinese cuisine has reached a state of perfection. For Chinese people, dining is one of the most pleasurable activities, best exemplifying harmony and order. The convention followed at the Chinese table is the use of round table. The round table permits seating by hierarchy. When being seated for a dinner, elders, and senior and important guests are the first to be seated. After them are the children, who enjoy special attention, and sit shoulderto-shoulder with the elderly. Established rules of etiquette include the matching of various dishes and utensils, and the sequence of serving the dishes. A very important part of the Chinese way of life is preserving one's health. Many health-giving "medicines" are on the daily menu. It is called homology of medicine and food. They include not only woodland flowers, grasses and edible wild herbs, but also the flesh of animals, including fat, bones, blood and internal organs.
12.2.3 Lifestyle & Culture

The culture of the Chinese people, as shown in the conduct of their daily lives, closely adheres to the precepts of Taoism. Taoism is inclined to simplicity in all things. People thoughts and feelings conform to each season as they become one with nature, acting in harmony with everything on earth, and valuing human
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relationships. Since one's life must respect and conform to the seasons, the jieqi (seasonal division points in the calendar) must be acknowledged. Festivals and jieqi are particularly important to the Chinese. Not only in festivals and other special occasions, examples of Chinese culture may be seen in everyday activities of the Chinese. In playing the lute or chess, reading or painting, the important thing is not technique, but rather one's frame of mind when conducting these activities. The tea ceremony originated in China. It focuses the attention of participants on clarity of thinking and refinement. Zen Buddhism has had an extensive following in Chinese history; its practice influenced the daily habits of a great number of people. Zen Buddhism may be the best way to exemplify the mysterious quality of oriental culture. This is a way of life that pursues harmony with nature and with others, simplicity, and a feeling of warmth and oneness with all.
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13. Business Culture in China

Improved international relations, government reforms, an expanding economy and increased foreign investment make doing business in China a potentially lucrative affair doing business in China means that business people will come into increasingly frequent contact with Chinese business people and officials. It is imperative that those doing business in China learn about areas such business culture, business etiquette, meeting protocol and negotiation techniques in order to maximize the potential of their business trip In this short guide to doing business in China, a few cultural facts and their influence on business culture and etiquette are explored. China highlighting of some important key areas one may encounter.
13.1Confucianism
In essence Confucianism revolves around the concept of harmonious relationships. If proper behavior through duty, respect and loyalty are shown in the relationships between a ruler-subject, husband-wife, father-son, brother-brother and friendfriend, society as a whole will function smoothly. When doing business in China it is possible to see how Confucianism affects business practices. Of the less subtle manifestations are an aversion to conflict, maintenance of proper demeanor and the preservation of 'face'.
13.2 Face
Roughly translated as 'good reputation', 'respect' or 'honour,' one must learn the subtleties of the concept and understand the possible impact it could have on your doing business in China. There are four categories of face: Where one's face is lessened through their involvement in an action or deed and it being exposed. The loss of face is not the result of the action, but rather it's being made public knowledge. When face is given to others through compliments and respect. Face is developed through experience and age. When one shows wisdom in action by avoiding mistakes their face is increased. Where face is increased through the compliments of others made about you to a third party.
It is critical that you give face, save face and show face when doing business in China
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13.3Meeting & Greeting

Doing business always involves meeting and greeting people. In China, meetings start with the shaking of hands and a slight nod of the head. Be sure not to be overly vigorous when shaking hands as the Chinese will interpret this as aggressive. The Chinese are not keen on physical contact - especially when doing business. The only circumstance in which it may take place is when a host is guiding a guest. Even then contact will only be made by holding a cuff or sleeve. Be sure not to slap, pat or put your arm around someone's shoulders. Body language and movement are both areas you should be conscious of when doing business in China. You should always be calm, collected and controlled. Body posture should always be formal and attentive as this shows you have selfcontrol and are worthy of respect. Business cards are exchanged on an initial meeting. Make sure one side of the card has been translated and try and print the Chinese letters using gold ink as this is an auspicious color. Mention your company, rank and any qualifications you hold. When receiving a card place it in a case rather than in a wallet or pocket.
13.4 Building Relationships

Relationships in China are very formal. Remember, when doing business you are representing your company so always keep dealings at a professional level. Never become too informal and avoid humor. This is not because the Chinese are humorless but rather jokes may be lost in translation and hence be redundant. When doing business in China establishing a contact to act as an intermediary is important. This brings with it multiple benefits. They can act as a reference, be your interpreter and navigate you through the bureaucracy, legal system and local business network
13.5 Giving Gift Etiquette

When doing business in China. Gifts should always be exchanged for celebrations, as thanks for assistance and even as a sweetener for future favours. However, it is important not to give gifts in the absence of a good reason or a witness. This may be construed differently. When the Chinese want to buy gifts it is not uncommon for them to ask what you would like. Do not be shy to specify something you desire. However, it would be wise to demonstrate an appreciation of Chinese culture by asking for items such as ink paintings or tea.
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Business gifts are always reciprocated. They are seen as debts that must be repaid. When giving gifts do not give cash. They need to be items of worth or beauty. Do not be too frugal with your choice of gift otherwise you will be seen as an 'iron rooster', i.e. getting a good gift out of you is like getting a feather out of an iron rooster It is illegal to give gifts to government official however; it has become more commonplace in the business world. The following gifts and/or colors are associated with death and should not be given:

Clocks Straw sandals A stork or crane Handkerchiefs Anything white, blue or black
13.6 Meetings and Negotiations

Meetings must be made in advance. Preferably some literature regarding your company should be forwarded to introduce the company. Try and book meetings between April - June and September - October. Avoid all national holidays especially Chinese New Year. Do proper homework before meeting. Punctuality is vital when doing business in China. Ensure you are early as late arrivals are seen as an insult. Meetings should begin with some brief small talk. If this is your first meeting then talk of your experiences in China so far. Keep it positive and avoid anything political. Prior to any meeting always send an agenda. This will allow you to have some control of the flow of the meeting. The Chinese approach meetings differently, so rather than beginning with minor or side issues and working your way up to the core issue, reverse this. The Chinese are renowned for being tough negotiators. Their primary aim in negotiations is 'concessions'. Always bear this in mind when formulating your own strategy. You must be willing to show compromise and ensure their negotiators feel they have gained major concessions. One known strategy for Chinese negotiators is to begin negotiations showing humility and deference. This is designed to present them as vulnerable and weak. You, the stronger, will be expected to help them through concessions. Be patient and never show anger or frustration. Practice your best 'poker face' before negotiating with the Chinese. Once they see you are uncomfortable they will exploit the weakness. Decisions will take a long time either because there is a lack
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of urgency, simultaneous negotiations are taking place with competitors or because the decision makers are not confident enough.
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14. Behaviour & Manners in China

Do not use large hand movements. The Chinese do not speak with their hands. Your movements may be distracting to your host. Personal contact must be avoided at all cost. It is highly inappropriate for a man to touch a woman in public. Do not point when speaking. To point do not use your index finger, use an open palm. It is considered improper to put your hand in your mouth. Avoid acts that involve the mouth. It is more acceptable to give gifts either in private or to a group as a whole to avoid embarrassments Always arrive on time or early if you are the guest. Do not discuss business at meals. Do not start to eat or drink prior to the host. As a cultural courtesy, you should taste all the dishes you are offered. Never place your chopsticks straight up in your bowl. By placing your sticks upright in your bowl your will remind your host of joss sticks which connotes death. Do not eat all of your meal. If you eat all of your meal, the Chinese will assume you did not receive enough food and are still hungry. Women do not usually drink at meals. Tipping is considered insulting, however the practice is becoming more common
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15.Business Communications
Bowing or nodding is the common greeting; however, you may be offered a handshake. Wait for the Chinese to offer their hand first. Applause is common when greeting a crowd; the same is expected in return. Introductions are formal. Use formal titles. Often times Chinese will use a nickname to assist Westerners. Being on time is vital in China. Appointments are a must for business. Contacts should be made prior to your trip. Bring several copies of all written documents for your meetings. The decision making process is slow. You should not expect to conclude your business swiftly. Many Chinese will want to consult with the stars or wait for a lucky day before they make a decision. The most important member of your company or group should lead important meetings. Chinese value rank and status. Allow the Chinese to leave a meeting first.
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16. Politics System 16.1 Peoples Congress System

The peoples congress system is Chinas fundamental political system. The Constitution of the PRC provides that state power belongs to the people. The NPC and local peoples congresses at all levels are organs representing the people in exercising state power. The peoples congresses have four main functions and powers: legislation, supervision, appointment and removal of officials, and making decisions on major issues. These functions are a major reflection of the way the Chinese people exercise their power as masters of the state through the peoples congress system. To persist, improve and develop the system is an important part of the building of political democracy in China. Since the Third Session of the 11th Plenary Session of the Communist Party of China (CPC) in 1978, the peoples congress system has seen constant improvement and development. The past 50 years have proved that the peoples congress system accords with the national conditions of China. It not only ensures that people exercise state power in a concerted way and gives full play to their enthusiasm and initiative as masters of the state, but also creates favourable conditions for state organs to share the work and help one another in organizing the socialist construction.
16.2 Multi-Party Cooperation and Political Consultative System

Multi-party cooperation and political consultation under the leadership of the CPC constitute the basic party system in China. It was jointly created and developed by the CPC and other democratic parties in the long-standing process of Chinas revolution, construction and reform. The system, which was conceived in the democratic revolution period and was established after the founding of the PRC in 1949, has made great headway after the Third Plenary Session of the 11th CPC Central Committee held in 1978.
16.3 Multi-Party Cooperation

Chinas party system is distinct from the multi-party or two-party systems in Western capitalist countries, as well as the one-party system in a few countries. Its evident features are as follows: The CPC acts as the ruling party while, under the
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leadership of the CPC, other parties participate in the discussion and management of state affairs, in cooperation with the CPC. Cooperative relations between the CPC and other parties are based on the principle of long-term coexistence and mutual supervision, treating each other with full sincerity and sharing weal or woe. The Constitution of the PRC is the basic code of conduct for the CPC and the other parties. Within the scope of constitutional rights and obligations, these parties enjoy political freedom, organizational independence and equal legal status. The Constitution provides that the system of multi-party cooperation and political consultation under the leadership of the CPC will long exist and develop. The multi-party cooperation in China is mainly carried out in six forms. Political consultation between the CPC and other parties. Giving play to the role of representatives of democratic parties and personages without party affiliation in peoples congresses at all levels. Recommending qualified members of democratic parties and non-party personnel to assume leading posts in government and judicial organs at all levels Strengthening the participation of democratic parties in the work of the CPPCC. Encouraging non-CPC personnel to scrutinize the CPC and the government through multiple channels and in multiple forms. Supporting democratic parties to participate in practices of reform, opening up and socialist modernization. The political advantages of the system of multi-party cooperation and political consultation under the leadership of the CPC lie in the fact that it can both achieve wide democratic participation, pool the wisdom of democratic parties, mass organizations and people of all walks of life and promote the scientific and democratic decision-making of the party in power and governments at all levels, and realize centralization and unity and draw up unified plans with due consideration given to the interests of different sections of the people. Moreover, it can avoid both the problem of insufficient supervision common under one-party
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rule, and political chaos and a lack of stability and unity that may be caused by disputes and strife of several parties. In February 2005, the CPC promulgated the Opinions of the CPC Central Committee on Further Strengthening the Building of the System of Multi-Party Cooperation and Political Consultation Under the Leadership of the CPC, which, on the basis of summing up historical experience and successful operations in multi-party cooperation and political consultation, further clarifies the principles, contents, ways and procedures of the system of multi-party cooperation and political consultation, and points the direction for improving the socialist political party system with Chinese characteristics.
16.4 System of Ethnic Regional Autonomy

The system of ethnic regional autonomy is a basic political system of China. Ethnic autonomous areas in China are divided into three levels, autonomous regions, autonomous prefectures and autonomous counties. Now, China has established 155 ethnic autonomous areas, including five autonomous regions, 30 autonomous prefectures and 120 autonomous counties (banners). Of the 55 ethnic minorities, 44 have their own autonomous areas.
16.5 One Country, Two Systems

The key points of the one country, two systems policy are that within the PRC, the main body (mainland) will continue with its socialist system, while Hong Kong, Macao and Taiwan will maintain the capitalist system. The aim is to achieve peaceful reunification of the motherland and maintain stability and prosperity in Hong Kong, Macao and Taiwan. One country is the premise and basis of the two systems, and recognition of the principle means recognition of the premise of one country that refers to the PRC, and that the main body of the nation will maintain the socialist system with Chinese characteristics. The policy is an important component of the socialism with Chinese characteristics. Taking into account the special status of Taiwan, the Chinese Government has pursued to solve the Taiwan issue with the basic principle of peaceful reunification and one country, two systems. That is, after the reunification of both sides across the Taiwan Straits, Taiwans current socio-economic system, its way of life, as well as economic and cultural ties with foreign countries will remain unchanged. As a Launch of Q Shop in China By: Ajit Singh Rathore Page 57
special administrative region, Taiwan will enjoy a high degree of autonomy, including administrative and legislative powers, an independent judiciary and the power of final adjudication on the island. It will run its own party, political, military, economic and financial affairs, may conclude commercial and cultural agreements with foreign countries and enjoy certain rights in foreign affairs. It may retain its armed forces and the mainland will not dispatch troops or administrative personnel to the island. On the other hand, representatives of the government of the special administrative region and those from different circles of Taiwan may be appointed to senior posts in the Central Government and participate in the running of national affairs. The development of Hong Kong and Macao since their return to the mainland testifies to the fact that the policy of one country, two systems is correct and has strong vitality.
16.5.1 Hong Kong Special Administrative Region

On July 1, 1997, Hong Kong returned to the mainland after 150 years of British colonial rule. It entered into a new historical era of one country, two systems and Hong Kong ruled by the Hong Kong people with a high degree of autonomy. In the nine years since the handover, the Central Government has supported the chief executive and the government of the Hong Kong Special Administrative Region to administer the region in accordance with the Basic Law, Hong Kongs mini-constitution, and promoted its stability and prosperity. Hong Kong continues to maintain the characteristics of a free port and its status as a center of international trade, finance and shipping. The development in Hong Kong since its return testifies to the correctness of the policy of one country, two systems, shows that the Basic Law conforms to the reality of the region and is an important guarantee of its prosperity and stability, and that the people of Hong Kong are fully capable of ruling Hong Kong well.
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16.5.2 Macao Special Administrative Region

Macao, a part of the Chinese territory since ancient times, fell into the hands of Portuguese colonialists in the late 19th century. It returned to the motherland on December 20, 1999. Since its return, the Central Government has supported the chief executive and the local government to administer Macao in accordance with the regions Basic Law. The efforts provide strong guarantees for Macaos prosperity and stability.
16.5.3Taiwan Province
Taiwan has been part of Chinese territory since ancient times. In 1945, when the Chinese won the War of Resistance Against Japanese Aggression (1937-45), compatriots across the Taiwan Straits shared the joy of Taiwans return to the motherland. In 1949, when the Peoples Republic of China was founded, the world saw a China enjoying complete sovereignty and towering in the East once again. Regretfully, Taiwan could not be reunified with the mainland because of the ongoing civil war and the armed intervention of foreign countries. The Chinese people had to continue their struggle for reunification across the Taiwan Straits. At the end of the 20th century, China made great progress in its reform and opening-up drive. Hong Kong and Macao successively returned to the motherland, ending the history of Western powers occupying Chinese territory. Chinese compatriots at home and abroad have since become even more concerned about the early settlement of the Taiwan issue and the complete reunification of the motherland. The mainlands stance on developing cross-strait relations is consistent, firm and clear. This stance is to unswervingly adhere to the one-China principle; never give up efforts for peaceful reunification, nor change the principle of pinning hope on the Taiwan people; and never compromise on opposition to secessionist activities. Deliberate provocation by the Taiwan leader will not change the solemn commitment to utmost efforts to do everything that is conducive to the interests of Taiwan compatriots, cross-strait exchanges, peace across the Taiwan Straits and peaceful reunification of the motherland.
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17. Company Law

17.1INTRODUCTION:
On October 27, 2005, the Peoples Republic of China adopted a new Company Law. This law became effective on January 1, 2006.The New Company Law intends to make a revolutionary change in the practice of formation and management of corporations in China. However, a mere change in the law is not sufficient to bring about such change. The change will come only if the principles and procedures embodied in the new law are actually adopted and used by entrepreneurs, attorneys and the courts. There is much that suggests that the process of change will be slow and difficult. Some elements of the New Company Law will have an immediate impact. These are elements that can be applied automatically by local government officials and that do not require the participation of legal professionals or the courts. There are three such provisions that should have such immediate impact: the reduction in the amount of registered capital, the provision allowing single shareholder limited liability companies, and the provisions that allow for a simplified management structure for limited liability companies with a limited number of shareholders. The changes are uniform and are applicable throughout the system without the need for local officials to make discretionary evaluations. Management structure is similar. Local authorities can devise a check box form that allows the party forming the company to choose one of two options: either a full board or a single director. Once the choice is made, the local authorities can then proceed in a rigid and formalized manner that does not require discretion or judgment. New Company Law governs two types of corporations: limited liability companies and joint stock companies. The changes to limited liability companies are especially important to foreign investors in China because the statutes governing foreign direct investment in China require foreign investors to operate through a Chinese limited liability company. For existing foreign invested limited liability companies, the rules on operation of such companies have substantially changed.
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17.2IMPORTANT CHANGES INTRODUCED BY THE NEW COMPANY LAW
17.2.1 Management and Articles of Association

The New Company Law abandons the rigidity of the old law and encourages shareholders of limited liability companies to take a flexible approach to company management. The articles of association now are intended to be adaptable to meet the specific needs of each company. The New Company Law provides for management of the company by the shareholders, directors, officers and supervisors and provides default provisions concerning the duties and scope of authority for each. New Company Law specifically provides that the shareholders are free in the articles of association to adopt specific provisions to meet the needs of the company. There are virtually no provisions related to management that cannot be altered or expanded in a manner determined by the 2.Reduced and Simplified Minimum Capital Requirements 3. Single Shareholder Limited Liability Companies 4. Public and Shareholder Access to Company Information The public will now have access to the following information on limited liability companies: *Name *Registered address * Legal representative * Registered capital * Business classification * Scope of business * Termination date * Identity of shareholders
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The company must maintain the following basic records and make those records available to the shareholder at the shareholders request: * Articles of association * Minutes of meetings of the board of directors * Minutes of meetings of the board of supervisors * Tax returns and financial reports
5. Abuse of Shareholder Rights and Piercing the Corporate Veil 6. Legal Remedies for Improper Acts of Directors and Senior Management
17.2 Expressly prohibits directors and senior management from engaging in the following acts:
(1) Misappropriating company funds; (2) Depositing company funds into an individual account; (3) Loaning company funds or providing a company guaranty without shareholder approval; (4) Signing a contract or trading with another company in violation of the articles of association, unless the shareholders expressly consent; (5) Without shareholder consent, seeking business opportunities for oneself or for any other person by taking advantage of ones authority, or operating for oneself or for any other person any business similar to that of the company for which one works, without shareholder consent; (6) Taking commissions on a company transaction ; (7) Disclosing company secrets without permission; (8) Other acts inconsistent with the obligation of fidelity to the company.
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17.3THE NEW COMPANY LAWS IMPACT ON FOREIGN INVESTORS

Direct foreign investment in China may be carried out in three forms: Wholly foreign owned entity Equity joint venture Contractual joint venture.
This foreign invested enterprises tax regime provides for numerous tax reductions, including the following: * A reduced fifteen percent tax rate instead of the normal thirty-three percent rate *Exemption from all income tax for certain periods * Rebates of taxes paid upon reinvestment of profits * Exemption from import duty on imports of equipment
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18. Packaging law

Chinese Ministry of Health (MOH) published on November 3, 2011 new packaging law under clean-up procedure The primary points of interest that were raised are provided below. 1. Applicants must be domestic companies or individuals; therefore, foreign entities cannot be identified as an applicant, even if using a local agent. 2. A Certificate of Free Sale must accompany petitions for new food packaging materials, certifying the product's regulatory status in the country of manufacture. The certificate can be issued by a government organization, or an industry association. 3. Samples are not mandatory for petitions submitted under the formal procedures. However, a small sample (20-30 g) included with a petition submission would be appreciated. 4. Technical parameters listed on the guidance documents should all be included in petitions. Reviewers will check to make sure that all relevant information (e.g., melting point, density, etc.) has been provided when the dossier is submitted. 5. Proposed clearance language should be included in the dossier, including the substance name, scope of use, use level, conditions of use, and any applicable restrictions. This language will be used when the draft approval is published for comments. The online system, available on the website of the National Centre for Health Inspection and Supervision, will be updated to request that the applicant input such language when the application form is filled out. Currently there is no template, but the format used for food additives and novel foods may be referenced. This will be the only part of the dossier that is made available to the public.
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19. Advertising law 19.1COMPARATIVE ADVERTISING

In addition to the general principle that comparative advertising should not damage a third party's reputation or goodwill, it also requires that comparative advertising be based on factual evidence and not adopt any unfair or non-scientific comparative methods. Furthermore, the Draft Revised Law stipulates that advertisers of certain products and services, including medicines, medical equipment, health food, food additives, tobacco, wine, pesticide, veterinary drugs and medical services, will be prohibited from making any comparative advertising claims.
19.2FALSE ADVERTISING
In the existing PRC Advertising Law, the definition of false advertising is very general and vague, which has caused great difficulties for advertisers. The Draft Revised Law addresses this issue by providing a list of examples of what authorities would deem to be false advertising, including:
Material inconsistency between the representations made in the advertisement and actual facts, especially in relation to factors that have a major impact on a consumer's determination of whether or not to purchase the products or services, such as the product's function, composition, quality and purpose, where it was manufactured and expiry date Concealing key information or providing misleading information about the products or services False statements concerning the prizes or rewards that may be obtained upon purchasing a product or service Fabricating the experience of Other Participants with the products or services in the advertisement False statements that the products are out of stock or part of a significant sale.
The Draft Revised Law also increases the penalties for false advertising to three to five times the advertising fee received by the advertiser and provides that the advertiser, the advertising operator, the advertising publisher and Other Participants to the advertisement can be held jointly liable for damage caused to consumers as a result of the false advertisement.
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19.3ADVERTISING FOR SPECIAL PRODUCTS OR SERVICES
Healthcare: The Draft Revised Law contains several new provisions on healthcare advertising, including a detailed list of prohibited advertising content for prescribed and non prescribed medicines, medical equipment, medical services and other healthcare products that are not deemed to be medication, including cosmetics, healthcare food, sterilizing products, sanitizing products and beauty services. Tobacco and wine: In addition to traditional advertising channels, the Draft Revised Law prohibits tobacco advertising from being published through or using the internet, telecommunications, audio and video. It also imposes restrictions on the advertising of wine products. Hospitals and schools have been added to the list of venues where tobacco advertising would be prohibited. Investment-rewarding products and services: In recent years, advertisements promoting financial investment in the recruitment, real estate, financial management, sale of collections, securities investment, consultancy and loan consultancy business sectors have increased dramatically in China. The Draft Revised Law prohibits these advertisements from containing forecasts of rewards, risk-free commitments and/or recommendations by specialists or beneficial parties.
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19.4Environmental law in China

The Chinese leadership has developed a five-part strategy to address environmental problems: policy guidance from the centre devolution of power to local governments cooperation with the international community Development of grassroots environmentalism Enhancement of the legal system
Policy Guidance from the Centre There is policy guidance from the centre. China's State Environmental Protection Administration (SEPA), the State Development and Planning Commission, the State Economic and Trade Commission and the Environmental Protection and Natural Resources Committee (EPNRC) of the National People's Congress, among others, all play important roles in integrating environmental protection and economic development and bring different interests and priorities to bear. The core agencies behind China's environmental protection efforts-the EPNRC, the SEPA, and the judiciary, headed by the Supreme People's Court-together claim responsibility for the full scope of central governmental activities, including drafting of laws, monitoring implementation of environmental regulations and enforcement. There is a growing core of bright and capable people who are committed to seeking out new and creative ways to integrate economic development with environmental protection. They experiment with pricing reform for natural resources, tradable permits for sulphur dioxide, environmental education campaigns, etc. Still, the central bureaucracy is grossly understaffed and underfunded. China's central budget for environmental protection is still limited to about 1.5% of GDP annually.
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20. Environmental Responsibility 20.1 Local Government

A second conscious strategy of the Chinese leadership, since about 1989, has been to devolve authority for environmental protection to the local level. Shanghai, for example, routinely invests over 3% of its local revenues in environmental protection and has made substantial strides toward cleaning up its air and water pollution problems. Poorer regions, in contrast, continue to see their environment deteriorate, despite the overall improvement in the country's economy. Even when local environmental officials succeed in closing down a factory, it will often reopen in another locale or operate at night.
20.2 Cooperation with the International Community

A third element of China's plan to improve its overall environment is to tap into the expertise and resources of the international community. China is the largest recipient of environmental aid from the World Bank, the Asian Development Bank, the Global Environmental Facility and Japan. The international non-governmental organization community has also become increasingly active in China. Organizations such as Environmental Defence, the Natural Resources Defence Council, the World Wildlife Fund, and the Rockefeller Brothers Fund all have extensive projects in China to introduce new policy approaches to environmental protection on issues as wide ranging as organic farming, energy efficiency, and tradable permits for sulphur dioxide. Moreover, multinationals, such as Shell and BP, have begun to support China's environmental efforts. They introduce better environmental practices and technologies, may undertake independent and thorough environmental impact assessments, and fund activities by Chinese nongovernmental organizations such as environmental education programs. Environmental implications of China's further integration into the world economy through its participation in the World Trade Organization are likely to be mixed: diminishing land intensive farming in favour of increased agricultural exports, for example, but also increasing the opportunities for heavy polluting industries such as textiles and tin mining. Overall, however, the international community has played a crucial role in terms of policy advice and investment in raising the level of China's environmental practices.
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20.3Developing Grassroots Environmentalism

China has opened the door to the involvement of non-governmental organizations and the media in environmental protection. By permitting the establishment of these relatively independent efforts, Beijing hopes to fill the gap between its desire to improve the environment and its capacity and will to do so. At the same time, the government is very careful to monitor the work of these NGOs in order to ensure that environmentalism does not evolve into a push for broader political reform as it did in some of the republics of the former Soviet Union or countries of Eastern Europe. Most environmental NGOs devote their efforts to nature conservation, species protection, and environmental education. Other NGOs focus their attention on urban renewal: recycling activities and energy efficiency. Finally, there are environmental activists with interests and goals that exist well outside the boundaries for NGO activity established by the central government. The Chinese government has also encouraged the media to develop programs and publish articles focused on the environment. Chinese newspapers, radio and television now accord a prominent position to environmental issues and educating the public and sometimes spurring citizens to take action individually in the process.. In several cases media have been responsible for alerting authorities in Beijing to local corruption or ineptitude, demonstrating in vivid colour that local governments are flouting environmental regulations or failing to carry out national environmental campaigns.
20.4Enhancing the Legal System

China's legal system has long been criticized for its lack of transparency, ill-defined laws, weak enforcement capacity, and poorly trained lawyers and judges. Over the past decade, however, the government has made great strides on the legislative side, passing upwards of 25 environmental protection laws and more than 100 administrative regulations, in addition to hundreds of environmental standards.
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China's environmental law-makers also have taken to publishing some draft laws and regulations on their websites to invite public comment, an important improvement in the transparency of China's legal system. One bright spot is the emergence of legal environmental non-governmental organizations. The most prominent of these organizations is the Centre for Legal. Several simple steps could be taken to raise the profile of the United States in helping to shape China's future environmental, political and economic development. Remove Restrictions on the Overseas Private Investment Corporation and the U.S. Asia Environmental Partnership, both of which would provide assistance to U.S. businesses eager to gain a foothold in China's environmental technologies market, which is thus far dominated by Japan and the European Union
Lift the ban on involvement by the United States Agency for International Development (USAID) in China. US AID, with its broad emphasis on governance, public health, rule of law, and poverty alleviation could be especially valuable in addressing China's most pressing needs and the United States' most direct interests. Make better use of existing for a for Sino-American partnership on the environment, including the U.S.-China Forum on Environment and Development and the China-U.S. Centre for Sustainable Development. Both organizations-the first government to government and the second, a non-governmental organization with several former high-ranking government officials, heads of non-governmental organizations, and business leaders-were established during the Clinton Administration. While both organizations were still in a nascent stage by 2000, the Bush administration now has a unique opportunity to move both efforts forward through both political and economic support. Both organizations are extremely wellqualified to accomplish the public-private environmental partnerships that have served Japan and the EU so well in advancing their environmental and economic interests in China. Enhance existing efforts to promote the Rule of Law and Environmental
Governance. The State Department's Democracy, Human Rights and Rule of Law Launch of Q Shop in China By: Ajit Singh Rathore Page 70
program has embraced the environment as one of its primary targets for assistance in China. And the U.S. Embassy in Beijing has thrown its (limited) economic weight behind supporting environmental governance in China. Coupled with work by organizations such as the American Bar Association and the Woodrow Wilson Centre, the United States has established an important foothold in this area. Given the long-term reform benefits of these nascent efforts, however, significantly greater resources-through training, education, and exchange-should be provided to strengthen both the legal and NGO sectors in China. Here, too, the opportunities for public-private partnership are extensive. [1]These international in pressures include those brought the about desire by of China's many participation international environmental regimes,
multinationals to ensure that they and their people are operating and living in a safe environment, and China's own desire to present a positive image when it hosts major international events such as APEC or the Olympics. [2]China depends on coal to supply almost three-quarters of its energy needs. [3]By law, provincial and local leaders are required to be evaluated the local environment fares. [4]All local environmental protection bureaus are susceptible to such pressure. [5]While the current context of Sino-American relations is positive, there is still United States will push environmental concerns on China in an effort to prevent China's emergence as an economic power. Even seemingly innocuous demands by the international community for monitoring enforcement of international environmental agreements can also provoke claims of infringement on Chinese sovereignty.
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Part B Industry Analysis
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PESTAL ANALYSIS
Political:
Recently China has made extraordinary efforts in modernizing legal and economical system aimed to stabilize the growth of the country; however China remains a strictly controlled country, where civil liberties, such as freedom of communication, religion practice and demonstration are severely limited. Major internal problems in China include growing corruption, increasing rural poverty and environmental degradation. China enjoys a strong relationship with the US and other western countries and is likely to increase its influence in the region due to its expanding economy.
Economical:
Chinas economy is the second largest in the world,7 roughly 2.3 times larger than Japans and 70% of the worlds largest economy, the US. Since 1978, China has achieved an average 9.9% annual GDP growth, and the International Monetary Fund (IMF) forecasts the Chinese economy to surpass the US by 2016. Although growth projections are less bullish for the next five years, the projected 9% annual growth rate still outpaces other BRIC countries Social: China has the largest population in the world, 1.3 billion people increasing of about 7.8 million people every year. Research based on forecast data from the Department of Economic and Social Affairs of the United Nations Secretariat (http://esa.un.org) shows that the number of people with age between 20 and 39, which represent the target customers for Q Shop , Finally it should be noted that in China title and status are very important, as well as punctuality both professionally and socially. Household Final Expenditure Consumption: The high savings rate of Chinese nationals has a profound impact on household expenditures. Comparing private consumption as a percentage of GDP in major economies,. It is inevitable that Chinas consumer consumption will eventually rise to levels more in line with other developed Asian nations. Historically, Chinese families have a tendency to focus on housing rather than consumer goods as their first major purchase. While this dampens total household expenditures, private consumption will continue to grow and will likely outpace GDP growth, for reasons that have to do with several fundamental structural shifts in the Chinese economy
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Technological
Retail industry is one that lives and dies on margins, with managers on a neverending quest to increase revenue and decrease costs. Technology has been an area of intense focus in retail industries as a way to accomplish both goals. Improvements have been made in areas such as supply chain management, inventory management, customer experience, and loss prevention. Wireless technology, permitting communication between people and devices anywhere and without cables, has enabled the dramatic transformation of business processes in the past, and continues to do so. However, wireless deployments in the past have been limited by security requirements, the cost of deployment, inadequate management solutions, lack of standards, and availability of innovative solutions. Rapid advances in wireless local area network (WLAN) technology in recent years along with widespread adoption of the technology in the consumer and enterprise space have eliminated many of these roadblocks. Today, a new wave of opportunity exists for retail industries to improve margins through the use of wireless technology. This white paper discusses the applications for this technology, the security requirements in a retail environment, and considerations when selecting the right architecture for mobile network deployments.
Environmental The environmental policy is becoming one of the most critical issues for the Chinese government, which is investing $175 billion over the next five years for environmental improvements. In fact the current ecological degradation, due to rapid industrial growth of the country, is posing a long term threat for China in terms of economic growth and more generally in terms of international relationships. Due to the heavy dependence on coal and to the increasing energy demand, the air is heavily polluted, resulting in acid rain and water reserves contamination. China is currently the world second largest producer of carbon monoxide.
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2. Porter Five Force Model
Threat of New Entrants The easier it is for new companies to enter the industry, the more cutthroat competition there will be. Factors that can limit the threat of new entrants are known as barriers to entry Some examples include: Existing loyalty to major brands Incentives for using a particular buyer (such as frequent shopper programs) High fixed costs High costs of switching companies Government restrictions or legislation
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Power of Suppliers In retail industry the power of supplier is limited: There are very few suppliers of a particular product There are no substitutes The product is extremely important to buyers - can't do without it The supplying industry has a higher profitability than the buying industry
Power of Buyers This is how much pressure customers can place on a business. If one customer has a large enough impact to affect a company's margins and volumes, then the customer hold substantial power. Here are a few reasons that customers might have power: Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers; they can do without the product for a period of time Customers are price sensitive
Availability of Substitutes What is the likelihood that someone will switch to a competitive product or service? If the cost of switching is low, then this poses a serious threat. Here are a few factors that can affect the threat of substitutes: The main issue is the similarity of substitutes. For example, if the price
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of coffee rises substantially, a coffee drinker may switch over to a beverage like tea. If substitutes are similar, it can be viewed in the same light as a new entrant.
Competitive Rivalry
This describes the intensity of competition between existing firms in an industry. Highly competitive industries generally earn low returns because the cost of competition is high. A highly competitive market might result from: Many players of about the same size; there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth; companies can only grow by stealing customers away from competitors
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3. Life Cycle of industry
Current retail industry
Retail industry in china is growing rapidly throwing tough competition. After the WTO 2005 agreement FDI is allowed in Retail store the major foreign player entered in the retail industry with merger and accusation. The industry came with many changes and developed new technology to improve the profit. The industry in current scenario has a huge potential growth of 17%. Industry is now at the Growth stage at nearer to maturity stage.
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4. Major factor regarding Retail industry:

CAGR : 17%
4.1 Steady and Rapid Growth

China retail industry continued growing steadily and rapidly. A series of government policies were implemented to speed up the retail growth in 2009 and 2010. For instance, the Ministry of Commerce enacted a policy to further drive China Consumer Confidence Index continued to rise and was higher than the global average. Although Chinese consumer confidence fell dramatically as a result of the global financial crisis in 2008, it has rebounded since 2009, as the global economy recovered and a series of central and local government policies were enacted to stimulate domestic consumption, maintain growth, as well as for certain industries restructuring.
Major Fact about retail industry
China retail sales value
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Market Share of Top 100 Retailers by Region of Origin, 2010
HK & Taiwan , Asia , 3.75 6.33 US, 6.48 Europe , 5.26
China Mainland , 78.19
Sales and Store Growth Rate
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Market share of top 100 retailer by region of operation
Single city , 15.91 Regional , 8.16
Inter-regional , 10.2
Nation wide , 65.73
Sales and store growth by dominate operation
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Urbanization driving retail boom in China
Urbanization is directly related to the standard of living of particular country. In china urbanization is increasing rapidly that show the potential for retail industry is increase and people are more conscious to brand. The Power of Aspiring Middle class
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Buying power of middle class is increasing in both urban and rural people love to spend when they have money. in china the 340million people come under this category
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5. Retail store formats

Chinas retailing sector remains highly fragmented, housing many small and medium-sized retailers unlike the U.S. where the big retailers have a dominating presence. China was home to over 549,000 retail enterprises. Despite the fact that the number of chain stores has grown in recent years, cross-provincial retailers remain less common because of local market access barriers. However, China does flaunt a wide array of retail formats, each at a different level of evolution and development: Department stores These stores were popular earlier on, but are facing intense competition now and are battling to stay ahead. (Golden Eagle, Parkson, Beijing Cuiwei, Shenzhen Suibao) Hypermarkets The development of hypermarkets has been led by international retailers, who are now spreading their wings to tier 2 and 3 cities, as markets in tier 1 cities reach saturation. (Wal-Mart, Carrefour, Vanguard, Tesco, Metro, RT Mart Shanghai, TrustMart) Supermarkets:
This highly fragmented market dominated by domestic players, is witnessing cutthroat competition, often leading to weeding out of the weaker players coupled with strategic consolidation. (A-Best Supermarket) Convenience stores:
Though still in the development stage, this format is witnessing increasing competition, mostly among domestic chains. (Quick of LianHua, Alldays & Kedi of NGS) Specialty stores:
Electronics/Appliances: This segment is clearly dominated by domestic players, with limited foreign investment. (GOME, Suning) Discount stores: Still evolving, this format remains concentrated in tier 1 cities. The first discount store was introduced by Carrefour in 2003.
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Direct selling
With direct selling rules introduced in 2005, providing the much needed legal framework, the potential for further growth remains immense. (AMWAY, Mary Kay, Avon) Online retail: Online shoppers grew 68% between 2009 and 2010 to 185 million. Online retail sales have been predominantly consumer-to-consumer transactions. However, with over 29% of its population using the internet, online retail sales are poised to grow over 30% per year. (Taobao, Alibaba, eBay)
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Competitor Analysis
The Ruentex Groups RT-Mart

RT-MART owned by Taiwan-based conglomerate Ruentex Group is a domestic hypermarket in Taiwan and represents the supermarket retail investment of the group. It has announced with Group Auchan SA, Frances second-largest food retailer (present in more than 13 countries with 243,000 partners), about the listing of their combined mainland stores on the Hong Kong Stock Exchange, the France retail Group Auchan a merging plan in 2010 and launching an Initial Public Offering (IPO) in Hong Kong the same year The Ruentex Group, an international business group across the textiles and clothing, construction, circulation hypermarkets, healthcare, finance industries and education foundation was founded in 1943. But the group started its hypermarket operation (e.g. RT-MART) in 1996 in Taiwan. The Ruentex Group is involved in the development of diversified form of foreign capital in China, currently there are a number of investment projects, of which more well-known are: RT-Mart hypermarkets, Shanghai C-Store convenience stores; the group has also sponsored the MBA/EMBA Program in Guanghua Management School of Beijing University, Antai College of Economics and Management, and Shanghai Jiao Tong University. Strength of company: RT-Mart uses mergers and cooperation strategies with several local retailers and very quickly it differentiates itself from major competitors in terms of retail processing, business development and strategic actions. And in a very short time, RT-Mart (NT$ 24 billion) was even able to replace Marko (NT$18 billion) as the second retailer in 1999 As a local company, it is more likely to develop a strategy which emphasizes on cultural characteristics based on fresh products concept (live fish) to win the trust of local customers RT-Mart also completely differentiates itself from Carrefour, instead of starting its business in big cities, its starts opening its stores in small cities (where investment costs are lover) contrary to Carrefour which opens stores in the capital of the provinces
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Competitive strategy: o Cost o Manufacturing cost is lower than competitor o Efficient internal operation system Store Strategy: Discount store setup storage area, large storage volume of consumer goods includes food, non food consumables etc. or promotional merchandise, store shelves on the outside. In addition it also has a storage function and display Commodity Procurement: The build business alliance system between RT Mart and Save & Safe to conduct similar purchasing methods. Professional Sales: Suppliers send professional sales personal to station in the store Promotion: Advertising is relevantly low; only on major holiday day advertising in local media. on store hording poster, and decoration is design according to the buying behavior of consumer HR After new recruitment fresh candidate get three month training to come at RT Mart. They will be families with supplier and RT Mart culture
CARRFOUR
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Background The second largest Retailer in the world Ranking 22 in Fortune 500 (2005) 1995 entered China 79 stores in China (by 2006/8)
Pricing in Carrefour Pricing department: collect product-related data in the market, study the merchandise to be sold in Carrefour, perform competition analyses, and determine appropriate prices for each product. Headquarter pricing department is responsible for the negations with national and foreign brand. Regional pricing departments (four regions in China) are responsible for the negations with regional brands and prepare posters and flyers. Prices were entered into the companys electronic retail price system and were applicable to all Carrefour outlets in the same market. In order to enhance quick responses to the market, store managers were given the power to make real-time price adjustmentssomething other retailers did not do. Decentralized management: store managers have power in price adjustment, merchandise management, promotion negotiation, and human resources etc.
High-low price Carrefour applies a composition of different pricing strategies and made profit from different compositions. Sensitive product (high price elasticity): very low price
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Non-sensitive product: constitutional price Carrefour brand: elastic price Foreign product: very high price
Store Strategy: firstly suppler deliver good to discount store at designated customer logistics center (i.e Distribution center ) also known as system storage. The storage center will forward the goods to each store. Carrefour has set up its own logistic system Commodity Procurement: Discount store organize itself merchandise procurement system Professional Sales: They have their own staff to professional sales Promotion: They focus on national wide advertising channels including wired cable, TV, Magazines, Direct marketing, Radio, Outdoor marketing, POP marketing HR: Every individual unit has a power to recruit people according to need and manage them
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WALL MART History: Since the first Wall mart store opened in 1962 in Rogers, Arkansas, wall mart have been dedicated to making a difference in the lives of our customers. Wall mart business is the result of Sam Walton's visionary leadership, along with generations of associates focused on helping customers and communities save money and live better. Walmart entered the Chinese market and opened its first Supercenter and Sams Club in Shenzhen in 1996. Currently, Walmart operates a number of formats and banners in China including Supercenters, Sams Clubs, and Neighborhood Markets. As of March 1, 2012, Walmart had owned 370 units in 140 cities in 21 provinces and four municipalities, and had created over 106, 500 job opportunities across China. Walmart China firmly believes in local sourcing. Walmart have established partnerships with nearly 20,000 suppliers in China. Over 95% of the merchandise in our stores in China is sourced locally. In addition, Walmart is committed to local talent development and diversity, especially the cultivation and full utilization of female staff and executives. 99.9% of Walmart China associates are Chinese nationals. All our stores in China are managed by local Chinese. Furthermore, over 60 percent of Walmart China associates are female and about 40% of those are at management level. In 2009, the company established the Walmart China Womens Leadership Development Commission for driving womens career development. Strategy used by Walmart Every day low price Walmart, the worlds largest retailer, plans to carry out its everyday low price strategy in China to accelerate international sales growth, which is lagging behind other competitors
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Localization Strategies To maintain its practice of EDLP, Wal-Mart adopted a three pronged approach in China. First, it focused on increasing local procurement thus reducing procurement costs. Second, it maintained satisfactory supplier relationship during its initial years by paying suppliers within 3-7 days. Third, it established modern commodity distribution centers and computerized its management to improve efficiency and reduce cost Governance Practices Unlike Chinese companies, at Wal-Mart, associates found a high degree of transparency in relation to career growth. All new employees went through three months training at Shenzhen. Wal-Mart valued an individual's competence rather than personal connections when promoting an employee. According to a report by People's Daily Online, Du Limin who started her career as an ordinary checkout person at Wal-Mart, became general manger of a Sam's Club in Shenzhen in just two years. In 2003, Wal-Mart figured among the 15 most popular foreign employers in China in a survey of university students conducted by ChinaHR.com one of the leading online recruitment websites in China. Wal-Mart suppliers also underwent "standards training." As per Wal-Mart standards, suppliers were not allowed to have a work-week of more than 40 hours. Wal-Mart also restricted overtime to three hours per day and emphasized that safety requirements were met and satisfactory accommodation was provided to the workers
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Part C Company Analysis
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VISION
To be NUMBER ONE TALENT DELIGHT company
MISSION
To create value for all stakeholders To be a customer empathic organization To excel as a customer delight organization To engage in activities with recurring, mid-term & long-term revenues To maintain continuous growth To become the next big thing
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Core Commitments Our Strength:

Emotion: Emotion is in performance of genuine duties towards the loved ones primarily in their benefit, from their point of view. Emotion is the key that generates the required energy and enthusiasm for desired quality performance. Discipline The enthusiastic obedience of laws and orders, which are given by the rightful authority. Duty The enthusiastic obedience of laws and orders, which are given by our conscience. No Discrimination Never should we discriminate in any of our actions, reactions, attitudes, decisions, conclusions, in any of our expressions while caring for the six healths of other human beings, namely, physical, material, mental, emotional, social and professional. Quality Results from honouring rules, regulations, commitments, values, fairness, performance of duties by honestly balancing ones own and others reasonable points of view in the matters of material and emotional aspects. Give Respect : To definitely make others feel important and respected by giving sincere regard to others feelings, reasonable wishes and thoughts with an open and receptive mind and warmth. Self-Respect To develop a sense of respect for oneself in others mind, i.e., to generate genuine and warm feelings for oneself among others on a continuous basis. Truth Means total transparency in action, reaction, attitude and all other expressions and the conviction to follow the right course. Religion There is a religion higher than religion itself - it is NATIONALITY. We may practice our religion in the confines of our homes, but outside, we should be Indians and
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only Indians. Nationality is thus above religion but HUMANKIND is above Nationality. Absolute Honesty People generally manipulate and deceive for achieving their unreasonable desires and greed if others do not or cannot see, hear or understand. But we firmly believe that our mind inside knows the truth and we should be absolutely honest to our mind inside and accordingly our actions, reactions, directions, decisions and all our expressions should be present in all human dealings.
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Philosophy
Collective Materialism
In any human relationship, it becomes imperative to take into consideration the materialistic aspect of life - we do so but by giving it second priority. The first priority is given to emotional aspect and with perfect blending of materialism with emotionalism results in continuous collective growth for collective sharing and caring, that gives an impetus to our philosophy - " COLLECTIVE MATERIALISM ".
No Trade Union
In this emotionally integrated family, nobody has ever felt the need for a trade union; therefore, none exists.
Caring
Our employees are not our employees. They are our family members. All belong to Sahara; Sahara belongs to all of them.
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SAHARA IN RETAIL
Sahara India has announced its foray into the retail industry in India with Sahara Q Shops, where Q stands for quality& Purity. Initially, the company plans to start more than 800 shops across 5 states, selling food items, home and personal care products, processed foods and beverages. Sahara Indias venture into retail is a unique business model via a Rs. 3,000 crore investment, the company plans to push out its own home brand products. The company will tie up exclusively manufacturers to deliver its own range of products to its customers. The products sold at Q Shops will be adulteration-free 100% Quality Consumer Merchandise.. and will have 100% right weight/quantity, claims the companys website. At present, Q Shops will be launched only in UP, Bihar, Jharkhand, Rajasthan and Uttarakhand. By end of this year, Sahara India plans to expand to West Bengal, Assam, Odisha, Tripura, Haryana, New Delhi, Punjab and Chandigarh. By February 2012, Q Shops will make their presence felt in almost all the countrys regions including Gujarat, Maharashtra, MP and other southern states. To shop at Q Shop, customers will need to become members. The company plans to develop a strong membership by tapping its significantly large existing customer base. Company Source said "Our one million workers regularly visit 6.5 crore depositors and it would be easy for them to enter those houses and sell our other products". Once people become members, they can buy products directly from retail outlets or through their home delivery system. Customers can simply place orders at designated call centres and avail home delivery. It is reported that the backend of the initial phase will consist of more than 300 warehouses which will work as distribution centres to supply products to Q Shops, and to customers who call for home delivery. The concept of home brands and in-house products has been adopted since decades in the western retail markets. Taking advantage of thousands of customer walk-ins every day, supermarkets in the west are known to shelve their own home brand products alongside those of other brands. From food and processed food products like milk to commonly used household products like dishwashing liquids, they have their in-house products for just about everything. Taking advantage of bulk volumes among many other factors, the chain can supply its products at prices a tad lower than other products, whose price tags may include the cost of branding.
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revenue targets of Rs. 20,000 crore in the first 18 months and Rs. 45,000 crore in a span of 2-3 years will be very challenging to achieve. There seems to be a general consensus among commentators that the efficiency of Sahara Indias supply chain will be critical in shaping the growth of its retail venture. Additionally and unlike other supermarkets where consumers will have a choice of buying from many brands, it appears that Q Shop customers will only have access to the companys own product line.
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SWOT ANALYSIS
Strength: Niche Segment 100% commitment to quality Most competitive price Doorstep delivery of products under strict supervision Right weight/quantity 100% disclosure policy across all products Convenience of phone shopping State-of-the-art Quality Control labs in New Delhi, Mumbai, Lucknow, Nagpur, Hyderabad, Kolkata and Patna Pan-India quality team of 800 people, comprising Scientist Associates, Senior Quality Controllers, Quality Assurance Managers and Quality Assurance Executives 305 warehouses in 285 cities
Weakness: Q Shop customers will only have access to the companys own product line The product is costly than available product in market The product is offer to membership holder Company is new in Retail High competition
Opportunity: Retail sector is growing rapidly Positioning to niche segment Awareness about hygienic and quality of product is increasing People are more health conscious
Threats: Competition is High If competitor come with same strategy Law entry barriers
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Marketing Mix of Q Shop
Product: Q Shop offers a wide range of Private labeling brand. It is offer the qualitative product. The product available with Right quantity , 100% commitment to quality Natural Mineral water Home Care Consumer Durable Personal Care Staples Processed food Packaged drinking water
Price: Product is available with the valuable price. Company try to reduce the price through direct reaches to customer
Place: The Q Shop is available in India with 305 warehouses in 285 cities
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Promotion
Q Shop follow the roality card promotion strategy Promotion through TV advertisement, Print Media, Facebook Marketing
Company Promote the product through the problem that exists in current market Q=Quality =Purity=Mission Membership card offer Brand endorsement by Sachin Tendulkar Promotion through print media
People
Well trained staff at stores to help people with their purchases Employ close to 10,000 people and employ around 500 more per month. Well-dressed staff improves the overall appearance of store. Use scenario planning as a tool for quick decision making multiple counters for payment, staff at store to keep baggage and security guards at every gate, makes for a customer-friendly atmosphere. Using the Home Delivery service 50 Quality experts and associates 150 Quality Control Executives 30 Quality Assurance Managers 500 Quality Advisors
7 Quality Labs Lucknow, Delhi (NCR), Mumbai, Patna, Kolkata, Hyderabad, Nagpur Quality Control Team Online Product check during Production Quality Assurance Team Secondary Layer to check adherence to Quality protocols System Quality Advisory Board- Of known scientists and food technologists
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Process
Quality Control (QC) focuses on meeting requirements of on-line processing parameters and product quality checks at manufacturing/packaging locations, under the following key points: a) Raw Material Testing, b) On-line Process Monitoring and c) Finished Product Testing. In addition, QC imparts training to manufacturer/packager on HACCP, Food Safety, General Pest Control, Fumigation, GMP, GHP, etc. Quality Assurance (QA) focuses on verification of quality systems in the entire value chain, as follows: Development and verification of SQMS for all the food categories Staples, Processed Foods, Beverages, Water and NonFoods. The SQMS manual ensures all types of hazards (physical, chemical and biological) are eliminated during processing. The manual is based on HACCP (Hazard Analysis Critical Control Point) principles. It covers Process Flow Diagram, Process Description, HACCP Monitoring Plan, Sampling Plan, Quality Checking Plan, Lab Testing, Standard Operating Procedures, Process Specific Formats, etc.
Physical Evidence
Products in Q Shop are properly stacked in appropriate racks. There are different departments in the store which display similar kind of products. Throughout the store there are boards/written displays put up which help in identifying the location of a product. Boards are put up above the products which give information about the products, its price and offers
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Distribution:
Sahara Q shop distribute the product through wholesale store to direct customer Random check by International Testing and Certifying Agencies Distribution through 305 state of the art warehouses in 285 towns & cities constituting 1 crore Sq. Ft. Sales network of 600,000 trained sales personnel supported by 3000 call centre executives Products formulated after extensive primary research on 88,000 family covering 4.5 lac consumers from 400 Indian cities & towns Primary survey on 45,000 grocery stores across 1000 towns for customer spent preferences Secondary Sampling on selected 10,000 consumers and live simulation test in 15 cities
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Part D. Marketing Plan for China
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Mission
To deliver a high-quality and 100%pure product, on time and within valuable price at shortest time
Goal
The goal is order today, delivered today. However, products are often delivered after 24hours or even 1day
Objectives
The company objectives are: To be a position himself in a different segment within a quarter Improve on quality and more focus on 100% purity Aim to have 40% of sales in high-end residential customer segment in Tier 1 cities To establish a retail chain open a new retail outlet every month
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Marketing Plan of Q shop

Establish a brand under blue ocean strategy. Q shop is known for its quality and purity. Build position in high end market segment. Make product availability at high margin through using a high technology (SAP and ERP system)and improve the logistical system. The company owners have provided the capital to cover the start-up expenses. The company currently seeks a 35-year commercial loan to cover the operating expenses
Entry Strategy
Choice of market entry mode- a critical issue in international marketing The interest in market entry mode choice originates from the theory of international investment. Market entry mode is a critical decision for firms intending to conduct business overseas We should be entering in to china retail sector in hypermarket or super market store with foreign direct investment. We are taking 16 buildings on lease for 40 years.
Research:
Before launching in China Company use the research to choose the following thing Area: Outline of retail mall Buying behaviour Brand loyalty People reason to visit retail outlet like for buy, fun, just for window shopping What people accept from retail outlet
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Location of Store
Their first entries are in Tier 1 cities Beijing, Shanghai, Guangzhou and Shenzhen, and their headquarters are mainly in these four cities After that we plan to made entry in tier2 or tier 3 cities in next three years City Beijing Beijing Area Beijing Tianjin Location Highway Near city centre
Beijing Beijing Shandong Shandong Shandong Shandong Henan Central plans Henan Central plans Henan Central plans Henan Central plans
Tangsan Quinhuangado Jinan Quingadao Tantri Weitang Zhengzhou Keifang Luoyang Jiuan
At railway station Centre Near city centre Highway Highway Outside city Outside of city Highway Highway In the Middle city
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Marketing Mix
Products:
Q Shop offers a wide range of Private labeling brand. It is offer the qualitative product. The product available with Right quantity, 100% commitment to quality Natural Mineral water Home Care Consumer Durable Personal Care Staples Processed food Packaged drinking water
Price:
Fundamental in Pricing Management
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We use here the HI-LO strategy for pricing Hi-Lo Higher profits price discrimination More excitement Build short-term sales and generates traffic
Approaches for Setting Prices Cost-oriented Demand-oriented Competition-oriented
Place:
First entry in china in Tier 1 cites and more focus on posioning himself to a Q Brand
We use the model of freestanding retail outlet located on either a highway or a

street. There are no adjacent retailers with which this type of store shares traffic.
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Promotion:
Retail communication mix
Advertising: In China, TV advertising is very important. But it is a threshold, and far from enough. More than half Chinese consumers indicated that they would not buy instant noodles or beers if they are not advertised on TV. Company should be more focus on TV advertisement
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Point-of-sale communication
Many Chinese consumers changes their minds at the last minute. 65% percent of Chinese consumers indicate that they leave a store with a different brand than the one that they intended to purchase. Information inside stores and coming from sales people may be more important than TV advertising. So we use the mall atmosphere is so attractive and private label brand is show as much nicely that customer prefer private labeling brand
Public Relations
Create Blogs and Online Forums Data says that the influence of blogs and online forums is significantly increasing in China. The credibility of consumer blogs and online forums is higher than TV advertising. Using WOM is more important tool for promotion.
Sales promotion: Redemption coupon for regular buyer Value able price Free gift Give 10 Yuan transportation fee to the first 300 customers who buy a product with a price higher than 500 Yuan
In store promotion and communication Creating an exciting environment Banners, ribbons, posters, balloons, and signs Clear price labels Manufacturer demonstration and promotions Lucky draw
Membership card from every retailer
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reinforce loyalty through point system We use Gift card as a very popular medium to make loyalty Government and organizations provide gift cards as benefits to their employees
Packaging: All the food product is packaged in triple seal packaging. Packeging should be include the product chracterstics and according to the packaging low of china. All the content is written in the Chinese language and English.
Store environment
Intend to create a hot and crowed selling environment. Warm Color (yellow) High light Noisy music Major aisles are 6-7 meters wide; other aisles are 3-4 meters wide Shelves are 1.8 meters high. because average height of chiness women is 1.6 meters Put its private labels on the second and third levels of shelves and around 100-150 cm high
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Store Design:
Category Fruit and vegetable Meat Seafood Frozen food Other food Cigarette and alcohol Seasoning Grain and Oil Detergent Apparel Shoe Home electronic Household chemical Stationery Toy Others Square feet (%) 10 8 7 12 12 6 5 3 5 10 5 3 3 3 3 5
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BCG Matrix
China retail industry is positioning here in star stage. Industry has a high growth rate with high margin. The Q shop here is position at a question mark stage. Where company have low market share and high growth rate. Company here need to more focus on the following thing: Increase market share Focus on creating more advertisement and awareness
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Customer service:
Free delivery Customer service is available at 24*7 Most deliveries in China are free and efficient (For CEs, 24 hour delivery is guaranteed in the same city) Free assembly Extra space for elder peoples leisure time Reserve sitting place for people who like sitting and chatting. Free cooking classes periodically. Free health advisory, Professional advisors are available at Q shop to answer questions about nutrition and other health related questions Chinese consumers do not get used to DIY and free assembly is common in China Best Buy brought the extend warranty policy to china and hoped that the revenue from warranty could help Best Buy earn more profit and get the competitive advantage over its competitors.
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Extra Activity:
Morning market
For elder people who exercise in the early morning and most of them would prefer to go to an open market to buy some fresh food. Opens its food section as early as 6am.
Advanced information system

Design a system which through able to check all store inventories in half an hour. Replenishment in 1 days Track the customer data and record buying behavior ERP system for highly efficiency
Transportation
Own transportation vehicles on contract bases Satellite system and GPS on all trucks
Distribution Centers:
The 85% merchandise go through distribution center.Distribution center is located middle of the city from where the supplies should be as early possible. We try to purchase directly from manufacturer at 85%
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Challenges for Q Shop in China

Q Shop Faces a following challenge in china Dont have many stores Lack of national suppliers Underdeveloped transportation and supply chain system Lack of information network with suppliers 60% are purchased from dealers 40% are purchased directly from manufacturers Larger retailers have a higher percentage of direct purchase; small retailers have a higher percentage of purchase from dealers
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Budget Plan
One china Renminbi = 8.72 Indian rupee One Indian Rupee = 0.11Rmb Income/ Capital: In china company plan to invest in the ratio of 1:3 the capital investment by company is 126,165,852.88 and from which we are getting loan from the Chinese bank of worth 94,624,389( 75% of total income ) In the loan the interest is payable only and of the year at the interest rate of 6.5% per annum the interest amount is 6,150,585.29. Margin: Assumption: We make a assumption that in the retail industry the margin is 10% lower than the industry because due to more sales promotion or establishment the relation with supplier .After the one year the margin should be increase from the 10% to 12%.
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Rent: We take property on lease bases and in the lease agreement owner is bounded to not increase the rent in first three year and after every 3 year the rent should be increase 15%. City Beijing location Beijing Tianjin Tangsan Quinhuangado Shandong Jinan Quingadao Tantri Weitang Position Highway Near city center At railway station Center Near city center Highway Highway Outside city Outside of city Highway Highway In the city Area 7620 3000 3000 3000 3500 3500 3500 3500 4000 Cost 180 160 150 150 180 170 150 180 140 150 140 140 Total 1371600 480000 450000 450000 630000 595000 525000 630000 560000 525000 490000 490000
Henan plans
Central Zhengzhou Keifang Luoyang Jiuan
3500 3500 Middle 3500
Ware House
Tianjin
At avilable High way
on 20000
90
1800000 8996600
Miscellaneous Expenses: The company includes the miscellaneous budget of worth 240,000.00. In miscellaneous expenses they company make assumption according to inflation rate of china that expenses should not be increase more than 10%. And the third year expenses should be increase 15% Advertising: At the first we plan to advertisement fully on TV and Local Media. We make assumption that we should be advertise on three TV channel that cost should be 3,809,052.00 yearly and we spend 62,500.00 the local media
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Inventory: Here we make assumption that we need average inventory of worth 75,000.00 The total inventory needed of 12 store = 75,000.00*12 = 900,000.00 Inventory needed for Warehouse Store: 187,500.00 Total Inventory is 1,162,500.00 Due to sales increase the inventory is increasing at 10% first year
Equipment: We should here buy following equipment and we use here single line depreciation method and we assume depreciation rate 30% for the next period of time Name Security machine Computer Printer Vehicle Fax machine office chair display rank and design Refrigerator pricing and tagging gun Luggage Trolley Office furniture SAP system TOTAL Consultancy Before starting we hire a consultancy service there for following things: Legal Services Research Marketing Activity Industry Brief cost 6250 1,148 1000 Contract bases 690 100 30000 7000 1000 125 25000 unit 13 89 89 18 250 12 12 60 2000 1 total 81250 102172 89000 12420 25000 360000 84000 60000 250000 6250 25000 1070092
Here we should hire on the fixed cost of 2,470,408.00 company should be decrease in consultancy charges next year due to establish in housing team of HR and law expert
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Wages: We recruit employee directly and the employee average increases in salary is 10% per year Department Designation Foreign direct officer Foreign direct officer Procuring Ware house L2 L1 A/c Head Store head Ad agency Operation L2 No. of Employee Per head 1 35000 1 1 1 12 1 3 3500 3000 18000 4500 6000 4000 total 35000 0 3500 3000 0 18000 54000 6000 12000
Retail operation cashier Sales team Quality assurance team Security Admin support Cleaning HR Ware house Store manager L1 L2 60 120 1 3 14 13 15 2 1 1 2500 3000 7500 3500 3000 350 2000 6000 3500 3000 150000 360000 7500 10500 42000 4550 30000 12000 3500 3000 754550
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Financial analysis of year 2013 Expenses Rent Salary Miscellaneous Advertising Transportation Shipping Inventory Interest Equipment 30% Pre Operating Expenses Consultancy Total Losses Income Sales Margin 10%
107,959,200.00 9,054,600.00 240,000.00 3,871,552.00 100,000.00 50,000.00 1,162,500.00 6,150,585.29 328,515.60 100,000.00 2,470,408.00 131,487,360.89 9,999,832.08
1214875288 121487528.8
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Year 2014 Particular Rent Yearly Increas e 107,959,200.0 0 10% 10% 9,960,060.00 10% 10% 10% 264,000.00 3871552 Sales Yearly increas e 20%
1457850346
Salary Miscellaneous Advertising Transportation Shipping Inventory Interest Equipment 30% Pre Operating Expenses Consultancy Total
Margi n
12%
174942041. 5
110,000.00 55,000.00 1,27 8,750.00 100000 6150585 328515.6
130,077,662.6 0 44,864,378.87 6,101,295.69 38,763,083.18
Profit /Losses Tax 17.5% Profit /Losses
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YEAR 2015 Particular Rent Salary Miscellaneous Advertising Transportation Shipping Inventory Interest Equipment 30% Pre Operating Expenses Consultancy Total Profit /Losses Tax 17.5% Profit /Losses 10% 15% Increas e in % Amount 107,959,200.0 0 10,956,066.00 303,600.00 2,871,552.00 121,000.00 60,500.00 1,406,625.00 6,150,585.00 328,515.60 100,000.00 130,257,643.6 0 88,419,908.24 15,473,483.94 72,946,424.30 Particula r Sales Margin 12% Increas e in % 25% Amount 182231293 2 218677551. 8
10% 10% 10%
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Profit on Yearly Bases
Proft Analysis
80000000 60000000 Profit 40000000 20000000 0 1 -20000000 2 Year 3
Break Even Point

Total Expenses = 126,165,852.88 First Year Margin = 121487528.8 BEP= Total Expenses/Margin = 126,165,852.88/121487528.8 = 1 year 4 months
Page 129
Bibliography
Books: Kotler P. et al (2009), Marketing Management, Pearson Education, New Delhi International Marketing, Philip R Cateora, Mc Graw hill publication Websites: http://history-world.org/a_brief_history_of_china.htm http://en.wikipedia.org/wiki/History_of_China http://www.worldbusinessculture.com/Business-in-China.html www.communicaid.com/.../culture/...business.../ www.china.org.cn/english www.cultural-china.com www.ccdcus.com www.deloiteresearch.org www.wikipedia.com www.qshop.com www.saharpariwar.com wwww.moneycontrol.com www.gemini.com.hk/assets/doc/survey_china.pdf Properties for rent China - Realigro Real Estate www.realigro.com Asia Republic of China
Page 130

International Marketing

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International Marketing

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2012

International Marketing Plan for Launching Chain of Retail Store in China

To: Prof. Jitendra Sharma Target [Type the company name]

Launch of Q Shop in China

By: Ajit Singh Rathore

Launch of Q Shop in China

By: Ajit Singh Rathore

Launch of Q Shop in China

By: Ajit Singh Rathore

Launch of Q Shop in China

By: Ajit Singh Rathore

Launch of Q Shop in China

By: Ajit Singh Rathore

14. 15. 16.

Launch of Q Shop in China

By: Ajit Singh Rathore

Part2. Industry Analysis

Part3. Company Analysis

Launch of Q Shop in China

By: Ajit Singh Rathore

Part4. Marketing Pan for China

Launch of Q Shop in China

By: Ajit Singh Rathore

Part A-International Country Analysis

Launch of Q Shop in China

By: Ajit Singh Rathore

Launch of Q Shop in China

By: Ajit Singh Rathore

Launch of Q Shop in China

By: Ajit Singh Rathore

Launch of Q Shop in China

By: Ajit Singh Rathore

Climate: Extremely diverse; tropical in south to subarctic in north

Launch of Q Shop in China

By: Ajit Singh Rathore

Population growth rate: 0.481% (2011)

Major cities - population

Infant mortality rate

Launch of Q Shop in China

By: Ajit Singh Rathore

Life expectancy at birth

Major infectious disease

School life expectancy (primary to tertiary education)

Maternal mortality rate: 38 deaths/100,000 live births (2008)

Launch of Q Shop in China

By: Ajit Singh Rathore

Launch of Q Shop in China

By: Ajit Singh Rathore

Geology and natural resources

Launch of Q Shop in China

By: Ajit Singh Rathore

Atmosphere and Climate

Launch of Q Shop in China

By: Ajit Singh Rathore

Season Spring Summer Autumn -Winter * -

Launch of Q Shop in China

By: Ajit Singh Rathore

GDP Composition by sector: Agriculture: 10.1% Industry: 46.8% Services: 43.1%

Launch of Q Shop in China

By: Ajit Singh Rathore

Labour Force: Agriculture: 36.7% Industry: 28.7% Services: 34.6%

Labour force 79.5 million Country comparison to world :1

Unemployment Rate: 6.5% (2011) Country comparison to the world: 70

Commercial bank prime lending rate 6.56% (2011) 5.81% (2010)