Partial SWOT Analysis of China for 2011 Strengths

Categories > Business & Management > Business Strategy & Competition RELATED ARTICLES A Partial SWOT Analysis of China for 2011 Threats A Partial SWOT Analysis of China for 2011 Opportunities A Partial SWOT Analysis of China for 2011 Weaknesses

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Professor of Strategic Management at Jimei University, PRC Still have a question?

Ask it in the Business Strategy & Competition forum China is the fastest developing country in Asia, but like all other countries and companies in the world, it has strengths and it has weaknesses. It also has a number of unique opportunities and like all other countries, a number of threats. Let us examine each of these variables as the new decade unfolds. This is, by no means an exhaustive examination of the issues, but merely some personal observations. Strength: 1. Population The population of China, while also being one its major weaknesses, is also one of its major strengths. With a population in excess of 1.2 billion, it has the largest workforce in the world and one of the best educated. This enormous population is a potential economic weapon of considerable proportions. It is far more powerful than any nuclear weapon. Logically speaking, the country with the most people who can contribute to the economy is the country that charge the lowest prices for every product made in that country. In the realm of

pure economic competition, with all other variables being equal (and that is a very unlikely situation, currently), the country with the largest population should have an economic advantage over countries with smaller populations. But history has shown us that is seldom the case. Countries such as Greece and Italy were not initially very big, and the island of England was even smaller, yet all three of them dominated the world economically for over a thousand years. In Asia, a small country like Japan has dominated the Pacific Rim for over 100 years. So size of population is no guarantee of success. It is only a potential advantage which requires a number of variables to be working in conjunction with that advantage. Strength: 2 . Tradition of Confucianism The tradition of Confucianism is a vastly underrated economic advantage for China. The sense of order and understanding of ones place in society is no greater in any country. This ordering of society allows the relatively smooth operation of government, the universal education of virtually the entire population of its children to extremely high

levels, and the maintenance of its millions of family units in a form of cooperative guanxi, a practice of social networking that is only minimally practiced in the West. This spirit of cooperation allows for enormous economic development and combined with the Western model of pure aggressive capitalism, then becomes a potent economic force. Strength 3. Political Homogeneity While some in the West consider this a weakness in Chinese society; many observers find that a one-party system has numerous advantages. The key, of course, is whether or not the one party system is responsive to the needs of the majority of its population. A case can certainly be made that the one-party system has benefited the majority of Chinese people over the course of the last three decades since the end of the Cultural Revolution. Cities have grown and modernized. Farmland has been redistributed to many millions rather than to few rich landowners, which has enhanced competition rather than stagnate the agricultural economy. Prices have been kept lower in China than any other country in the world for almost all

basic foods and necessities of life. There are still poor migrants who need special attention, but the one party government is responding to those needs. There are a number of two-party governments in the West that could learn a thing or two from the behavior of Chinas one party government. Things get done here, and they get done in a hurry without destructive filibustering or negative partisan politics, which we have seen numerous countries driven into the economic ground from the negative effects of that behavior. There are still political-economic problems in China, such as per capita distribution, housing, intellectual property protection, country-city redistribution of resources, and other issues, but the government has constructed numerous state of the art bullet trains superior to any Western country, and is developing a responsible infrastructure with environmental considerations such as the three gorges project and highway and secondary road construction. All in all, if I were grading the government from 1976 onwards, I would have given it an A-. I can say with complete honesty that the grades for Western countries

during this similar period would be quite a bit lower. Next time we will consider some of the Weaknesses of China in 2011.

A Partial SWOT Analysis of China for 2011 - Opportunities

Categories > Business & Management > Business Strategy & Competition RELATED ARTICLES A Partial SWOT Analysis of China for 2011 Threats

A Partial SWOT Analysis of China for 2011 Strengths A Partial SWOT Analysis of China for 2011 Weaknesses

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In our continuing SWOT assessment of China in 2011, we will now examine three primary opportunities for China: Still have a question? Ask it in the Business Strategy & Competition forum Opportunity 1 - To Become Economic Leader of the Pacific Rim Right now, Japan is still firmly the economic leader of the Pacific Rim. Chinas GDP has surpassed Japan, but that number is rather meaningless in comparison to per capita income and wealth distribution within the country. China has been steadily gaining on Japan since 1976 and will continue to do so in the foreseeable future, but they still have a long way to go and must make progress on solving their economic problems. IF, and this is a big IF, China can redistribute its resources within its population and continue to accelerate the increase of its per capita income to its inhabitants at the same time, THEN it has a chance to make a definitive

move on Japan and China will also be able to keep India, another great developing country in Asia, at bay. If China fails to do this, then India will bypass them and eventually challenge Japan. Opportunity 2 Buy Up The Reserves of the Worlds Natural Resources While Prosperous China has an opportunity, which it seems to be intelligently seizing, of buying up as much of the worlds natural resources reserves while they are still one of the few prosperous economies in the world. Most of the other country economies are depressed right now, which makes them easy targets for Chinas cash-heavy buyers. This opportunity will not last forever, and China realizes this. They must buy as much as they can while they can afford it. Prosperity never lasts forever. Opportunity 3 Make Political and Economic Gains While Prosperous It is so much easier to make political and economic gains when a country is prosperous, rather than when it is in an economic downturn. People listen to you politically when you are economically

successful. They turn a deaf ear to you when you are struggling economically. It is much easier to conquer a country or region economically than it is militarily. Money speaks much louder than weapons. Since 1976, China has pursued a peaceful coexistence policy with over 100 countries for political and economic cooperation, including with the United States, which is its favorite trading partner. It has normalized relations with the Mideast, something the United States can only dream about. China literally has no enemies in the world (although they are always in a constant competition with Japan and it aint too friendly, either) Hu and Wen are master negotiators and have done more export business in the world than the last three American presidents combined. There are additional opportunities, such as creating a new strategic alliance with the emerging Southeast Asian sector through ASEAN, solidifying its strategic alliance with Indonesia and Singapore, peacefully and economically merging with Taiwan, and creating more economic alliances with the formerly mistrusted Russians (mistrusted under Mao, but now again being wooed by

the CCP). We will discuss these additional opportunities at another time.

Case study Many people around the world view China as a poor country where every single person has to work around 60 hours per week to survive and feed his family. However, this old fashioned clich is no longer true. China has woken up and has already managed to shake the world economy. A new step towards internationalization was its decision to join the World Trade Organization (WTO). China became a part of the organization on the 11th of December 2001. The Asian country now has a GDP of 2.68

trillion dollars and competes with nations such as USA and the European countries. Furthermore, the Chinese GDP has experienced a two figures growth rate since a couple of years. This makes it the fastest growing economy of the decade. The economy is getting increasingly liberalized, and the increasing wealth has had an impact on the per capita income. The average income is around $ 1,000 but the urban population enjoys a per capita income of over $ 3,000. It is noticeable that the differences are very high but a category of the population will enjoy high entertainment consumption due to it.