Macroeconomic Performance of China Essay Example | Topics and Well Written Essays - 2500 words

Macroeconomic Performance of China - Essay Example The country's economic progress is visible in terms of all these factors - the huge jump in per capita incomes, the increased scope of activities for non - state sector enterprises, and its closer integration with the global economy. The Chinese economy grew at a healthy rate of 8% in the year 2000. The growth was stimulated by supportive macroeconomic policies, and a favorable external environment. PESTLE Analysis - an Introduction: PESTLE analysis is a useful tool for understanding the "big picture" of the environment, in which you are operating, and the opportunities and threats that lie within it. By understanding the environment in which you operate (external to your company or department), you can take advantage of the opportunities and minimize the threats (RAPIDBI). Specifically the PEST or PESTLE analysis is a useful tool for understanding risks associated with market growth or decline, and as such the position, potential and direction for a business or organization. Political Environment: Political forces influence the legislations and government rules and regulations under which the firm operates. Every company faces political constraints in the form of antitrust laws, fair trade decisions, and tax programs, minimum usage legislations, pollution and pricing policies, administrative activities and many other actions, aimed at protecting the consumers and the local environment. These laws, rules and regulations affect a company's profits. However, there are other political actions such as patent laws, government subsidies and product research grants that support business activities. Thus, political forces influence the organization both positively and negatively. Political activity also influences three additional functions, viz. the supplier function, the customer function and the competitor function. The customer function is influenced by the political activity when government demand for products and services can create, sustain, enhance or eliminate many market opportunities. Economic Environment: Economic factors clearly indicate the nature and direction of the economy in which a firm operates. Every market is unique and consumption patterns change along with the wealth of the consumers in various market segments. For strategic planning all the economic trends at national and international levels have to be considered. Prime interest rates, inflation rates and trends in the growth of the Gross National Product (GNP), general availability of credit, the level of disposable income and the propensity of people to spend are the economic trends that have to be analyzed. The potential economic impact of international forces appeared to be severely restricted and was largely discounted until recently. The focus of economic environmental forecasting was changed by the new international power brokers. The European Economic Community (EEC), the Organization of Petroleum Exporting Countries (OPEC) and coalitions of lesser-developed countries (LDC) are three well known examples of influential international power brokers. Social Environment: The social environment is an important factor as changes in the values, beliefs, attitudes, opinions and lifestyles in society create potential opportunities for an organization. For a company to grow, it is necessary to take advantage of societal