npv china outlook 2009
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COPYRIGHT NPV CHINA
CHINA OUTLOOK
2009
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2009 – China Outlook
China Outlook, by NPV China
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AGENDA
Executive Summary China at a Glance
Political Structure
National Accounts
Balance Trade
China Diversity
National Economic Plan
Business Organization
Legal Structure for Foreign Enterprise
Business District Map
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2009 – China Outlook
China Outlook, by NPV China
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China, with its 1.33 billion population, is the country with the largest potential for growth in the world and thus must represent an essential part of each company’s strategy, either as a production base or as a final market
The economy has been growing at average rates of 10.8% between 2001 and 2008 and is now 3rd largest in the world, accounting for 6% of global GDP; foreign trade has been growing dramatically (an average of 25% CAGR between 2004 and 2008), and foreign investment has kept pouring in to the country with actually utilized foreign capital of 92.4 billion in 2008, up by 23.6%
For Italian companies, China represents an extremely important opportunity on any of the following 3 fronts: Sale: as a final market with more than 1.33 billion consumers Delocalization: as a low cost production base Purchasing: as a sourcing base
Exchange rate: RMB/USD stood at 6.83 at the end of 2008, with a 6.9% appreciation of the end of 2007 RMB/EUR stood at 9.61 at the end of 2008, with an 9.8% appreciation of the end of 2007
Inflation: CPI in 2008 surged to 5.9% mainly due to the soar of food price. Other factors such as increase of energy price and excess liquidity in the financial market may keep the momentum of CPI
Stock Market: SSE composite index plunges 2/3 from the beginning of the year; whether the government should intervene is under intense debate
The new LAW OF THE PEOPLE'S REPUBLIC OF CHINA ON EMPLOYMENT CONTRACTS came into effect in 1st Jan, 2008 towards more protection of the employees
The 29th Olympic Games was held successfully in Beijing in August, 2008.
EXECUTIVE SUMMARY
Source : China Statistical Yearbook , China National Statistics Bureau, NPV analysis
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2009 – China Outlook
China Outlook, by NPV China
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AGENDA
Executive Summary
China at a Glance Political Structure
National Accounts
Balance Trade
China Diversity
National Economic Plan
Business Organization
Legal Structure for Foreign Enterprise
Business District Map
COPYRIGHT NPV CHINA
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2009 – China Outlook
China Outlook, by NPV China
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By 2050 it is expected that China will be the world’s number one economy
Source : BRIC Report , Goldman Sachs
CHINA AT A GLANCE
2025 USD bn
2050 USD bn
The largest economies in Asia in 2025
The largest economies in the world in 2050
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2009 – China Outlook
China Outlook, by NPV China
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Territory
- 9.6 million km2 , 1st in Asia, 3rd largest in the world
Population
- 1,328 billion in 2008 (51,5% male, 45.7% urban)- Annual growth rate of approximately 0.53%
Capital
- Beijing
Government System
- Communist
Administrative Divisions
- 4 level : Province (34) / Prefecture ( 333 ) / County ( 2860 ) / Townships (41040 )
Currency
- RenMinBi (RMB) or Yuan, semi-flexible exchange rate
Languages
- Mandarin, with Cantonese as the second most common language
Ethnicities
- Han (92%) and 55 minorities (8%)
Religion
Buddhism, Islam, Taoism, Christianity
Source : China Statistical Yearbook, NPV analysis
Country profile CHINA AT A GLANCE
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2009 – China Outlook
China Outlook, by NPV China
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AGENDA
Executive Summary
China at a Glance
Political Structure National Accounts
Balance Trade
China Diversity
National Economic Plan
Business Organization
Legal Structure for Foreign Enterprise
Business District Map
COPYRIGHT NPV CHINA
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2009 – China Outlook
China Outlook, by NPV China
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POLITICAL STRUCTURE
Source : http://afe.easia.columbia.edu/china/gov/chart.htm, NPV analysis
Government and Communist Party Structure
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2009 – China Outlook
China Outlook, by NPV China
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BEIJING
SHANGHAI
TIANJIN
CHONGQING
HONG KONG
MACAU
XINJIANG
TIBET
QINGHAI
GANSU
SICHUAN
YUNNAN
INNER MONGOLIA
GUIZHOU
GUANGXI
HUNANI
HUBEI
SHAANXI
SHANXININGXIA
HENAN
HEBEI
GUANGDONG
JIANGXI
FUJIAN
ANHUI
ZEJIANG
SHANDONG
HAINAN
LIAONING
JILIN
HEILONGJIANG
TAIWAN
JIANGSU
Municipality Autonomous region Special administrative region
Source : China Statistical Yearbook, NPV analysis
Administrative Division
23 ordinary provinces (including Taiwan)
4 Municipalities : Beijing Chongqing Shanghai Tianjin
5 Autonomous regions : Guangxi Inner Mongolia Ningxia Tibet Xinjiang
2 Special administrative regions : Hong Kong Macau
POLITICAL STRUCTUREChina administrative divisions
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2009 – China Outlook
China Outlook, by NPV China
10Source : Chinese Government, NPV analysis
Central Government
Municipalities Provinces, Autonomous Regions Special Administrative Regions
Districts Counties
Cities Autonomous prefectures Counties, Autonomous Counties
Districts Counties
Cities Counties Autonomous Counties
Townships Ethnic townships Towns
POLITICAL STRUCTUREChina administrative divisions
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2009 – China Outlook
China Outlook, by NPV China
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AGENDA
Executive Summary
China at a Glance
Political Structure
National Accounts Balance Trade
China Diversity
National Economic Plan
Business Organization
Legal Structure for Foreign Enterprise
Business District Map
COPYRIGHT NPV CHINA
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2009 – China Outlook
China Outlook, by NPV China
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China is the 3rd largest economy in the world in 2008, 6% of gross world product (2007)
Considering the GDP per capita, China is the 106th in the world in 2008 ( at $3,315 )
Chinese economy grows consistently reaching a 10% annual growth rate during the latest five years.
China’s urban households’ per capita disposable income growth has consistently been higher than CPI inflation, indicating a positive real growth in the people’s living standard.
China GDP 2004 - 2008
People’s Income and CPI¹ 2001-2008
RMB Bn
NATIONAL ACCOUNTS
Source :China National Economic and Social Development Report, China Statistical Yearbook, NPV analysis
9.2%
12.3%
10.0%11.2% 11.4%
12.1%
17.2%
14.5%
0.7%
-0.8%
1.2%
3.9%
1.8% 1.5%
4.8%5.9%
-2%
2%
6%
10%
14%
18%
2001 2002 2003 2004 2005 2006 2007 2008
Nominal Growth of Per Capita Disposable Income of Urban Households CPI
15987
18386
21087
24661
30067
10.1%10.4%
11.6%
9.0%
13.0%
0
5000
10000
15000
20000
25000
30000
35000
2004 2005 2006 2007 20088.0%
9.0%
10.0%
11.0%
12.0%
13.0%
14.0%Nominal GDPReal Growth Rate
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2009 – China Outlook
China Outlook, by NPV China
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Secondary industry is the dominant force in driving economy forward accounts for almost 50% of GDP, with CAGR 18.12% from 2000 - 2008
Tertiary industry grows with CAGR 17.61% from 2000 -2008
GDP – Breakdown 1978-2008
Source : China National Economic and Social Development Report, China Statistical Yearbook, NPV analysis
NATIONAL ACCOUNTS
28.2% 25.1%
15.1% 11.3%
47.9%
42.8%
45.9%48.6%
23.9%32.1%
39.0% 40.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
1978 1989 2000 2008
TertiarySecondaryPrimary
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2009 – China Outlook
China Outlook, by NPV China
GDP Per Capi ta 2008 (USD)
0
2000
4000
6000
8000
10000
12000
14
Average GDP per capita in 2008: 3,315 USD Shanghai is the richest province level area with a per capita GDP of 10, 922 USD in 2008. ZHEJIANG, JIANGSU, and GUANGDONG are the TOP 3 richest provinces 43.1 % of population’s GDP per capita is higher than average China has reduced 62 million, 53% extreme poverty during the past 20 years. In 1985 China had 116 million people living
under $1 dollar-a-day poverty level.(*)
GDP per capita ( USD )
(*) MGI China consumer demand model
NATIONAL ACCOUNTS
Source : China National Economic and Social Development Report, China Statistical Yearbook , NPV analysis
Over 4,000 USD/person 464 million
Below 2,500 USD/person347 million
Over 2,500 USD/person489 million
Average