Instability in economic and trade policy challenges China
Instability in economic and trade policy challenges China, where it is the second world’s largest economy as well fastest growing economies globally. When international companies enters into China, they must study the economic stability and prepare to face numerous risk because of the changes in monetary policies, the trade policies, fiscal policies and etc.
Yuan was more like a floating currency in 2017 which was unstable between 6 to 7 Yuan against 1 USD. Therefore, changes in the Yuan could give an impact to the profitability of the international businesses. Not only that the labor cost in China as also increased gradually the past five years plus the minimum wage level as also increased by the government. This will actually give an impact to the cost of operating in China which will affects local as well international companies who is operating in China.
As stated above, the average wages has increases in past years which leads to customer spending power increases. People in China looks for status of symbol by owning latest smartphones, designer clothing as well luxury cars in demonstrating their success. Increased in consumer spending as well status symbols is a great opportunity for domestic and also foreign companies.
The development of the internet environment as well the promotion in China has brought a huge opportunities into the e-commerce. Numerous e-commerce platforms has increased sharply lately this is because consumers in china prefers online shopping rather then going to shopping malls to get the products or services.