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Running head: INVESTING IN CHINA
Intro to International Business
Date of Submission
INVESTING IN CHINA
1. Will China maintain its strong economic growth in the years to come? Some
suggest it will until 2050. What do you think?
2. If China will go from 17 million to 200 million middle- and upper-income people
by the early 2020s, would the scenario presented by Best Buy not be applicable
anymore? Would newly rich Chinese customers engage in this purchasing in the
3. With Alibaba’s ownership of the very popular Tmall and Taobao online shopping
systems (similar to eBay and Amazon) and its spread across the world, will a
Western-based online shopping culture ultimately infiltrate China?
INVESTING IN CHINA
Investing in China
According to PricewaterCoopers (PwC), China is the biggest economy in the world in
terms of purchasing power parity (Chow, 2017). It is a target market for many international
companies due to its economic growth and its large population. One of China’s major economic
growth drivers is investment from foreign companies. For instance, between 2000 and 2011, the
exports by American companies to China increased by 542%. However, in the last few years,
exporting has become somehow stagnant, resulting in the questioning of China’s momentum.
Question 1: China’s Economic Growth in Coming Years
Currently, China is the biggest economy in the world in terms of purchasing power parity
according to PwC (Chow, 2017). Domestic consumption, which is a part of the Chinese
Economy, has recently declined by 13 percent. This decline, together with the slow global
growth among other factors has raised the question of whether China will be able to maintain its
strong economic growth in the coming years.
China’s economic growth can be attributed to the people of China. China’s economic
legitimacy has been relying on the availability of young and willing labor force. Currently, the
country has cheap labor due to its large population. There is a big number of migrants in China,
who also play a significant role in providing the country with abundant labor for its economy. In
the future, the Chinese population is projected to decline as a result of the forme...