PESTEL

-Political
Recently China has made extraordinary efforts in modernizing legal and economical system aimed to stabilize the growth of the country; however China remains a strictly controlled country, where civil liberties, such as freedom of communication, religion practice and demonstration are severely limited. Major internal problems in China include growing corruption, increasing rural poverty and environmental degradation. China enjoys a strong relationship with the US and other western countries and is likely to increase its influence in the region due to its expanding economy. China has difficult relations with a number of neighbouring countries, such as Japan, Vietnam, North Korea and Tibet; in particular the strained relationship with Taiwan could ultimately result is a war if the Taiwanese government formally declares independence.

-Economical
China economy is characterized by its extraordinary size and growth. The GDP has grown steadily since 2003 peaking at 11% year-on-year growth in 2007 (China Business
Forecast Report 2008, [1]) and inducing concerns about the country over-capacity in the long term.
The US government is trying to exercise its influence to accelerate the appreciation of the Yuan, in an effort to limit or at least control its export deficit.
Although the People’s Bank of China has raised the interest rates for five consecutive times in 2007, inflation is still very high with peaks of
6.2% in 2007.
Economic growth is still mainly driven by fixed asset investment and exports; however there has been a noticeable increase of private consumption.

-Social
China has the largest population in the world, 1.3 billion people increasing of about 7.8 million people every year. Research based on forecast data from the Department of
Economic and Social Affairs of the United Nations Secretariat (http://esa.un.org)