FinancialImplemented in early 2016 the Government of Chinahas reformed its Fiscal and Monetary purposes to focus on 5 Key issues. A) Create solutions to the overcapacity issue. B) Cut costs to businesses and business formation.
C) Stabilize the chaotic housing market. D) Improve the Infrastructure decreasing traffic congestion.E) prevent financial risks and reduce total property inventoryThe fiscal policy changes include more tax cuts andan increase to the amount of Foreign investment. The monetary policy changeswill be more accommodating, it will cut the cost for business financing,increase financing to the infrastructure, and change the exchange rate regimeimproving upon policies made to devaluate Chinese currency. The currency usedin China is called the Chinese Yuan (CNY) or Renminbi (RMB) translated toEnglish it means the Peoples Currency. The current exchange rate betweenCanadas Dollar (CAD) and the Chinese Renminbi(RMB) is 1 CAD is equal to 5.10RMB.Economic Theestimated GDP of china is 9.
24 trillion USD and the GDP per capita is 14,388USD. The GNP of China is 16.08 trillion USD quickly approaching the UnitedStates who is projected at 16.99 trillion USD. China has an Inflation rate of0.9% down from 2.5% in January with a low unemployment rate of 4.
02% which hasbeen maintained since 2015. The taxenvironment in China is classified between Individual and Corporate. Individualincome is taxed progressively starting at 3% increasing all the way up to 45%based on the amount of income earned.
The taxation for foreign and domestic Corporations is a standard rate of 25%. The Labour force of China consists ofover 641 million people. Chinafeatures a unique Socialist Market economy which is a blend of its previouscommunist roots, socialism, and with US capitalism. China is a World marketsupplier trading with all members of the G20.
Its major trading partnersinclude the United States (18% of total sales), Japan (6%), and South Korea(4.4%). China has many trade agreements including: ASEAN–China Free Trade Area(2010) Peru, China–Peru Free Trade Agreement (2010) Economic CooperationFramework Agreement (2010), and the former Trans-Pacific Partnership. The EconomicPolicy of China is changing its focus towards promoting structural reforms andmaintaining stability. The Monetary policy will place more efforts on preventingfinancial risks and keeping the RMB exchange rate stable while keeping a watchfuleye on non-performing FDIs, defaults on bonds, internet finance and shadowbanking. The Fiscal policy will focus additionally on increased taxes on high-pollutingcompanies as well as reforms in electricity, oil, and gas.GeographyDuringthe recent decades, there has been a large growth within the economy and thepolitical influence within China and the rest of the region. The two most wellknown and important cities within China is Shanghai and Hong Kong, both havinglarge political and financial influence within their regions and the rest ofthe country.
The capital of China is Beijing, and it is both the cultural andpolitical center of the country, with new economic policies changing the citysuch as transportation, high-rises and more.Chinahas a large amount of natural resources such as aluminum, petroleum, coal,iron, zinc, gold, diamonds, mercury, and natural gas. China has also 50,000rivers both large and small, most known are the four river systems, like HuangeHe, Yangzi/Chang Jiang, Pearl/Xi, and Liao, and depending where they arelocated, there could be a huge region for agriculture and other sources fortheir natural resources.Infrastructure and LogisticsChinasphysical infrastructure plays a key role in their economy. In 2016 720 billiondollars was invested over 3 years, contributing to 303 on going transportationinfrastructure projects.
The country isattempting to improve its high-speed transportation networks in inner city’sdue to its enormous population. Most of this investment will be spent onhighway and railway expansions. As of 2014 Chinas high-speed railway totaled16,000 km and is currently growing.
Chinashighway system is the world’s largest expressway system by length, havingsurpassed the overall length of the American Interstate Highway System in 2011.Expressways in China are a recent addition to the transportation infrastructurein the country and are up to date in result of recent construction. China’sgovernment, specifically the Ministry of Health of the State Council overseesthe health services system and over 21,000 general hospitals are currentlyoperational. Beijingis home to second busiest airport in the world, where 90 million passengers flyout of annually. Furthermore, shipping ports in China are of the busiest in theworld, the 8 busiest Mainland China shipping ports are each located over a longsection of China’s east coast stretching from Shenzhen in the South to Dalianin the North. Of these, 7 ports are in coastal cities, while the Port ofGuangzhou is further inland at the confluence of 3 major rivers and Shanghaibeing the busiest port. In conclusion, most of Chinas infrastructure iscurrently up to date and is of no concern when conducting business operationshere. Telecommunications in China is asystem that links all parts of the country and world by Internet, telephone,telegraph, radio, and television.
This extensive system of automatic telephoneexchanges is connected by modern networks of fiber-optic cable, coaxial cable,microwave radio relay, and a domestic satellite system. Cellular telephoneservice is widely available and reliable, which is all monitored and regulatedby the Ministry of Industry and Information Technology. Overall, telecommunicationsystem in China is satisfactory, reliable and up to date when compared towestern countries. Political: Currentlyin China, the government consists of four branches; the legislative branch, theexecutive branch, the judicial branch and the military branch. The ChineseCommunist Party (CCP) is the leading political party in China and unlikeparties in Western democracies, CCP is a tightly organized political force thatcontrols and leads society at all levels.
Their leader is Xi Jinping who isPresident of the People’s Republic of China. Independence Day in China iscelebrated on October 1; it marks the foundation of the People’s Republic ofChina. The Central People’s Government passed the Resolution on the NationalDay of the People’s Republic of China on December 2, 1949 and declared October1 as the National Day or Independence Day of China. Tensionsbetween North Korea and the U.S have become a growing concern for Chineseofficials.
Testing of missiles and nuclear development in North Korea haveconcerned China because it is a traditional ally with both countries U.S. andNorth Korea. China is unswerving in itscommitment to realising the denuclearisation of the Korean peninsula,maintaining the peace and stability of the Korean peninsula, and continue tosolve matters through dialogue and negotiations.Imports and ExportsChinais one of Canada’s largest trading partners with trading in both imports andexports as the second highest in Canada after the United States.
In October2014, China had $1,706 million dollars in exports in Canada, which from October2013 to October 2014 increased by 12.6% according to Statistics Canada. Chinaprovides much more in imports than exports when trading and in October 2014, itwas $3,165 million dollars, which from October 2013 to October 2014 increasedby 13.
9%. China’s trade balance with Canada increase from -874 to -1,458October 2013 to October 2014. Inrecent years, both Canada and china have been steadily increasing trade witheach other with China becoming our #2 Trade partner behind the USA. Canada’simports in recent years seem to be much more than exports as from 2014 to 2015seem to be more than double than from imports, and from 2016 to 2017, bothimports and exports were decreasing.
However, despite decreases from both importsand exports, Canada’s trade balance with merchandise trade hasincreased. Canadamostly trades woods, machinery, appliances, and most recently began tradingmore meat to China. China exports up to $27 billion with Canada, with most ofthe exports being in electronics and machinery, and then being furniture andequipment. Since Canada is a member of the G7, China is hoping to gain moreaccess to these other markets within the group such as Japan, the UnitedKingdom, etc. Canadatrades up to 20% in beans and other produce, with the rest in other productssuch as meat and wood, recent talks with China and Canada say that there willbe more trade in these exports. China’s total imports with Canada in 2016 are18.3 billion, with almost 25% of those import’s electronic appliances such ascomputers, broadcasting equipment, and telephones.
China and Canada also tradewith each other vehicle and car parts; however, they are less than 3% ofimports and 6% of exports. Canada’stotals imports from China for 2016 are a total of $48.6 billion. China’sexports with Canada in 2015 were almost double at $49.5 billion with moreexports in appliances, computers, and telephones.
Canada’s trade in serviceswith China is in travel, commercial services, and transportation and governmentservices, with travel being the largest service sector in exports, andtransportation as well as government services being the largest in imports. ConclusionWebelieve a trade agreement with Canada and China is good for both since Chinahas one of the largest economies in the world and having a relationship withCanada will give Canada easier access within the Asian market and region, aswell as China’s own market since the are so huge. Canada is a member of the G7,which is a good thing for China because that means that they might have accessto the other countries of the G7 as well such as Japan and Italy. Chinacan benefit from the rest of the western region since Canada is a major tradingcountry within the western hemisphere.
And Canada can also benefit from Chinasince they have major influence within the Asian-pacific region and they canprovide major services in both labor and natural resources, as well asmanufactured goods to both import and export.