CHINA: Economic Policy Analysis, May 2012 - Jun Feng Li, Michael H. and Amanda Z.
THE
OF
This site presents three analyses of the Chinese government's economic policies compared to a revised list of 34 economic policies as prepared by Jun Feng Li, Michael H. and Amanda Z. with the McKeever Institute of Economic Policy Analysis (MIEPA) in Spring 2012. To read the analysis scroll through this site. To learn more about the background policies, return to
Introduction and Policy Recommendations [NOTE – links are disabled]
To learn more about MIEPA , Return to MIEPA's Home Page
The studies are by Jun Feng Li, Michael H. and Amanda Z., Chinese natives who currently
[May 2012] live in San Francisco; these studies present the Chinese government's economic policies as compared to the MIEPA list of policies as outlined above. The ratings herein are based on the following rating scale:
RATING SCALE
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2012. Used herein with permission]
To read a disclaimer about the analysis in this file, scroll to the bottom of the file.
Return to MIEPA's Home Page
CHINA - POLICY ANALYSIS - JUN FENG LI
Comparison of China's economic policies to MIEPA criteria as prepared by a native student of
China Jun Feng Li, studying in the US in May 2012.

RATING SUMMARY - CHINA POLICY ANALYSIS - JUN FENG LI
POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE
1 2.3 6.9 15.0 46 %
2 1.8 5.4 15.0 36
3 1.8 5.4 15.0 36
4 2.0 6.0 15.0 40
5 3.0 9.0 15.0 60
6 4.2 12.6 15.0 84
7 4.2 12.6 15.0 84
8 4.3 12.9 15.0 86
9 2.0 6.0 15.0 40
10 4.8 14.4 15.0 96
11 4.0 12.0 15.0 80
12 5.0 10.0 10.0 100
13 4.0 8.0 10.0 80
14 5.0 10.0 10.0 100
15 4.8 9.6 10.0 96
16 4.8 9.6 10.0 96
17 4.5 9.0 10.0 90
18 2.5 5.0 10.0 50
19 3.2 6.4 10.0 64
20 3.0 6.0 10.0 60
21 4.2 8.4 10.0 84
22 2.3 4.6 10.0 46
23 2.0 4.0 10.0 40
24 1.8 3.6 10.0 36
25 1.8 3.6 10.0 36
26 2.0 4.0 10.0 40

27 5.0 10.0 10.0 100
28 2.0 4.0 10.0 40
29 4.5 4.5 5.0 90
30 3.0 3.0 5.0 60
31 4.0 4.0 5.0 80
32 2.0 2.0 5.0 40
33 5.0 5.0 5.0 100
34 4.0 4.0 5.0 80
TOTAL 114.8 241.5 365.0 66.2%
===== ====== ===== =====
Return to MIEPA's Home Page
POLICY ANALYSIS - JUN FENG LI
INDIVIDUAL POLICIES
1.
Freedom From Central Control 2.3
There is a system called ¡°Hukou¡± in China that lasts for thousands of years to constrain residents¡¯ freedom to move around the country. All the local benefits and privileges that attach to your ¡°Hukou¡± like school selection as well as health insurance limit people¡¯s desire to move around the country. Abolishing this system has become the common consent among the public.
Source: Personal experience, http://www.tianya.cn/New/PublicForum/Content.asp?strItem=free&idArticle=385298 http://www.dajunzk.com/hujifeichu.htm
2. Freedom of Speech 1.8
Freedom of speech in China has always been a big concern among western countries.
Government censorship is heavy on speech control, particularly focus on those ¡°subversive factors¡± like the Nobel peace prize winner Liu Xiaobo. Since Chinese government has this traditional fear on another-side opinions, the political climate in China remains silent and oppressive.
Source:http://www.slate.com/articles/news_and_politics/explainer/2010/10/is_there_freedom_of
_speech_in_china.html http://rlaframboise.hubpages.com/hub/Freedom-of-Speech-and-Censorship-in-China
3. Effective, fair police force 1.8

The crime rates in China is increasing rapidly in 2009, which it questions Chinese police force¡¯s capability to prevent crimes, especially in an ill-performed economy. What¡¯s worse, police force is accused of serving special interest groups rather than the common people. Convincing evidence is the legendary journalist who exposed insider trading in stock market was wanted by the local police for ¡°defaming public company¡± in 2010.
Source:http://view.news.qq.com/a/20100226/000033.htm http://news.163.com/10/0728/04/6CLDLA5D0001124J.html
4. Private Property 2.0
Local government in China performs poorly on protecting private property, whether it is physical or intellectual. Real private properties like houses are torn down under local government¡¯s desire to sell more lands to the property developers. Intellectually, piracy and knockoff prevailing in China have greatly damaged individuals¡¯ incentive to innovate and the government still could not figure out a good approach to handle it.
Source: http://www.molei.net/article/24293.html http://seekingalpha.com/article/31723-piracy-from-china-how-microsoft-ralph-lauren-nike-andothers-can-cope http://news.163.com/09/0428/07/57VIIIBT00012QEA.html
5. Commercial Banks 3.0
Chinese commercial banks are key elements for the development of Chinese large and strong banking system. Commercial banks in China, with the financial support from the government, have lent out billions of dollars to entrepreneurs and business to overcome the financial crisis in
2008. However, non-performing loans during this period have accumulated and it begins to threaten the financial stability of Chinese commercial banks.
Source: http://www.economywatch.com/banks/commercial-banks/east-asia-and-thepacific/china-banks.html http://articles.businessinsider.com/2011-08-31/markets/30042983_1_chinese-banks-commercialbank-reserve-ratio
6. Communication 4.2
In 2009, three major 3G network operators (China Telecom, China Unicom, China Mobile) claimed that they would cover nearly 100% of the urban or advanced rural area in China by the year 2011. It is a remarkable number comparing to the industrialized countries. In addition, the existence of Chinese website such as Alibaba.com and Tdctrade.com that endeavor to provide business information for different interest groups allow everyone in the world to seize business opportunity in this booming economic entity.
Source:http://tech.qq.com/a/20090410/000136.htm

http://www.ehow.com/how_2052763_find-business-opportunities-china.html
7. Transportation 4.2
Thanks to the economic stimulus project, which mainly focused on infrastructure construction like highway and railroad in 2008, China has the second largest mileage on highways, right after
United States. In addition, high-speed trail has developed rapidly as one of the most advanced countries with the longest high-speed railway mileage in the world. Other areas like aviation converge also receives a significant accomplishment.
Source: http://www.chinahighway.com/news/2009/361571.php http://finance.people.com.cn/GB/12881677.html
Personal experience
8. Education 4.3
The quantity of students¡¯ percentage from the total population is inspiring. The gross enrollment ratio of high-school level has reached to 74% while middle-school level received
98.5%, a remarkable number in 2008. In addition, Chinese government claimed in 2009 that illiteracy is no longer an issue in China, relating to a high literacy percentage of 95.9% in contrast to those industrialized countries in 2011. The quality of Chinese education, particular in fundamental education field, is well recognized around the world for nourishing such talented students on academic performance.
Source: http://www.gov.cn/test/2011-10/31/content_29930.htm http://en.wikipedia.org/wiki/List_of_countries_by_literacy_rate http://www.mianfeilunwen.com/Education_Papers/Education/Education_Reform/2007-
1/14/002002903.html
9. Social Mobility 2.0
Nepotism has been a major problem in China over thousands of years and it still is the major concern for the publics. When looking deep inside Chinese history, lots of examples could be retrieved to demonstrate how kinship relation took root in Chinese society. It is still Chinese reality today when people discover that those related to the superior officers are guaranteed for good positions.
Source: Personal Experience, http://club.kdnet.net/dispbbs.asp?boardid=1&id=2225590&page=1&1=1#2225590 http://article.hongxiu.com/a/2011-1-29/3831668.shtml
10. Freedom from outer control 4.8
Outer control is very limited in China for the property of its regime. Chinese citizens only obey laws and regulations made by the People Representatives Conference and the Chinese

government. China is now pursuing for an independent foreign policy that it opposes any hegemonic attempt to interfere in China¡¯s internal issues.
Source: Personal experience, http://www.fmprc.gov.cn/eng/wjdt/wjzc/t24881.htm
11. Protection of Domestic Enterprises 4.0
According to Chinese Commerce Department¡¯s report on China¡¯s foreign trade for the first three seasons in 2011, trade balance of goods and services are moving towards a much balanced status with a continually decreasing trade surplus since 2008. The government always had a specific plan for particular industries. For example, Chinese government has announced the ten principal fields with special policies support right after the financial crisis stroke Chinese economy in 2008.One of them is the automobile industry, in which government would set aside
10 billion RMB in three years from 2009 specifically for automobile technology innovation.
Source: http://trade.ec.com.cn/article/tradezx/201111/1169601_2.html http://finance.icxo.com/htmlnews/2009/06/25/1391283.htm http://finance.ifeng.com/zq/zqyw/20090226/402626.shtml
12. Foreign currency transactions 5.0
There is a heavy control regulation on foreign currency in China. All domestic transactions are conducted only by RMB, Chinese legal currency. Circulation of foreign currency is prohibited except as provided by the government.
Source: Personal experience, http://tradeinservices.mofcom.gov.cn/en/b/2008-08-05/58193.shtml
13. Border control 4.0
Chinese government takes smuggling seriously and makes a lot of progress that Chinese customs managed to retrieve more tax from smuggling in the first three quarters in 2011 than last year. By cracking several major smuggling cases these years, Chinese custom authorities are more effective in border control now.
Source:http://www.china.com.cn/economic/txt/2011-10/13/content_23612772.htm http://news.hexun.com/2011-12-11/136191335.html http://news.ifeng.com/mainland/detail_2012_01/12/11937954_0.shtml
14. Currency 5.0
Official currency circulates in China is Yuan (RMB), which it is the only legal currency issued by the People¡¯s Bank of China in this country. Hence China scores high in currency for its single currency circulation within its border.
Source: http://baike.baidu.com/view/16730.htm, personal experience

15. Cultural, language homogeneity 4.8
Though China has 56 ethnic groups on its land, they share the same Chinese belief system and the same value. Chinese government has devoted itself to maintaining ethnic harmony as its principal objectives ever since People¡¯s Republic of China was founded. Minorities from these ethnic groups, along with the dominant Han ethnic group, both recognize and take pride in their mutual culture. Chinese government¡¯s success in popularizing mandarin throughout the country also contributes much in cultural homogeneity.
Source: http://news.cctv.com/china/20090901/101226.shtml http://club.whinfo.net.cn/viewthread.php?tid=2087393, personal experience, http://wenku.baidu.com/view/e1dce90690c69ec3d5bb7561.html
16. Political effectiveness 4.8
Chinese government earns its reputation on its effectiveness to solve problems, particularly when the country encounters natural calamity and principal crisis. The convincing example is Chinese government¡¯s quick response which foreign leaders have spoken highly of during the
Wenchuan Earthquake in 2008. Chinese government performs well on emergency handling.
Source: http://www.chinareviewnews.com/doc/1006/5/1/4/100651407.html?coluid=7&kindid=0&docid=
100651407 http://news.etnet.com.cn/focus/2132-200819452.htm
17. Institutional stability 4.5
From the day when People¡¯s Republic of China was founded, core institutions in China have been stable under the leadership of the Communist Party. Throughout these years, it is the same political power that endeavors to build up and maintain key institutions like courts, schools and public services in this nation successfully. Therefore China scores high in institutional stability.
Source: http://wenku.baidu.com/view/3fcd108583d049649b6658d8.html http://blog.sina.com.cn/s/blog_53da17b201010lwr.html, personal experience
18. Honest government 2.5
Corruption is still a major political issue for Chinese government to handle in these days.
According to the recent report on the corruption perception index in 2011, China scores 3.6, ranking 75 among 182 countries, which is not coherent with its economic status in the world.
Though Chinese government puts lots of efforts against corruption and these actions receive some recognizable achievements, the mission is still far from accomplished.
Source: http://cpi.transparency.org/cpi2011/results/, http://bbs.tiexue.net/post2_4758554_1.html, personal experience

19. Common Laws 3.2
China has gained great achievement on legislation process since system reform and open-door policy was confirmed 30 years ago, especially on protecting private rights and possessions against the authorities comparing to the pre-reform period. But it would take times for the judicial system to fully and effectively implement these laws since those recurring illness from the old mechanism is tough to deal with.
Source: http://www.civillaw.com.cn/article/default.asp?id=49753, Personal experience,
20. Central banks 3.0
The People¡¯s Bank of China (PBC), as the central bank in China, is ¡°relatively independent¡± instead of independent from the administration according to current laws, which means political pressure might influence its policy. However, PBC has fulfilled its duty on maintaining Chinese economy by stabilizing its currency exchange rate and controlling the overall inflation rate.
Source: http://www.mianfeilunwen.com/ZhengQuan/Yinhang/45065.html http://www.tianjinwe.com/hotnews/txjj/201101/t20110107_3095919.html http://finance.sina.com.cn/money/forex/20081103/18485462884.shtml
21. Domestic Budget Management 4.2
In the year 2011, Chinese government received the total revenue of 10,374 trillion RMB with the total spending of 10.893 trillion RMB. Revenue rises by 24.8% to over 10 trillion RMB, a dramatic increase comparing to 2010. Budget deficit was still below 3% of the GDP, an international safety line for domestic budget management.
Source: http://business.sohu.com/20120120/n332755544.shtml http://news.163.com/11/1107/04/7I7TPF8200014AED.html
22. Government Debt 2.3
Chinese government¡¯s debt had raised observers¡¯ attention. The present value of the total debt for Chinese government is about 70~80 % of the GDP. Hence it is considered to be excessively indebted. What¡¯s more, some scholars claimed the debt level would reach 150% if this data includes the debt of state-owned enterprises since it would eventually become government¡¯s responsibility. Many economists have expressed their concern on the possible debt crisis in
China
Source: http://www.globalpost.com/dispatch/news/regions/asia-pacific/china/110707/china¡¯smountain-debt-explained?page=0,0 http://epaper.jinghua.cn/html/2011-07/12/content_678955.htm http://www.iceo.com.cn/shangye/114/2011/0822/227988.shtml
23. Economic statistics 2.0

The credibility of Chinese economic statistics, especially for those data published by the officials, has been questioned for many years. Its accuracy is the main denounce for the critics.
For example, the general public feels that the inflation rate should be much higher than the CPI index officials have claimed monthly. In addition, constant conflicts between critical data like
GDP announced by different department lessen people¡¯s confidence on Chinese economic statistics. http://zqb.cyol.com/html/2011-08/05/nw.D110000zgqnb_20110805_3-02.html, Personal experience, http://www.21cbh.com/HTML/2011-7-26/5NMDY5XzM1Mjc5Nw.html
24. Protection of Public Health and Safety 1.8
According to the current report published by Central Intelligence Agency (CIA), China has the infant mortality rate of 16.06 deaths out of 1000 new born babies in 2011, which is much higher than those developed countries like Japan and Untied States. Also, China has 1,500,000 people living with tuberculosis in 2010, the second largest population in the world. These two numbers show that there is a lot of room for the government to improve public health in China.
Source: https://www.cia.gov/library/publications/the-world-factbook/fields/2091.html http://www.globalhealthfacts.org/data/topic/map.aspx?ind=16
25. High Wage Policy 1.8
Because the wage rise for ordinary workers could not balance off the high inflation rate in China these years, salaries are in fact shrinking, which devastates people¡¯s inclination to consume more goods. The payment now people receive could hardly sustain their regular life, so this is a huge challenge for Chinese economy.
Source: http://finance.qq.com/a/20110426/002200.htm http://china.huanqiu.com/roll/2012-01/2378402.html, personal experience
26. Environmental Protection 2.0
Week law enforcement has always been the public concern in China, especially on environmental protection. Though the legislation and regulation are becoming more mature, few companies have to pay for polluting the environment. Current events like the oil leak in the
Bohai Sea are the strongest evidences to illustrate Chinese government¡¯s omission in environmental protection.
Source: Personal experience, http://www.ce.cn/xwzx/gnsz/gdxw/201008/08/t20100808_21700819.shtml http://finance.stnn.cc/c15/2011/0818/3492538766.html
27. Strong Army: 5.0

According to the newest ranking of the armed forces comparison in 2011, China has reached
No.3 around the world, right behind America and Russia. What¡¯s more, the defense budget only accounts for 2% of the total GDP in 2011. It shows Chinese army¡¯s capability and efficiency in the world. Hence national security is not a major issue for China.
Source: http://news.ifeng.com/mainland/special/2011lianghui/content-
0/detail_2011_03/04/4973579_0.shtml http://tui.qihoo.com/20553287/article_3170009.html
28. Foreign Trade Impact: 2.0
Foreign trade impact has played a major role in Chinese economy since China joined the WTO in 2001. The highest contribution is about 70-80% of the GDP over these years, which means that China is vulnerable against the outside forces. Foe example, the financial crisis happened in
United States in 2008 has damaged Chinese economy deeply by throwing lots of foreign trade enterprises out of business and generating a huge amount of layoffs.
Source: http://www.ftchinese.com/story/001000855 http://china.toocle.com/cbna/item/2008-11-12/4102373.html http://finance.ifeng.com/news/hgjj/20090421/561833.shtml
29.Management of Foreign Currency Budget: 4.5
In 2011, the total export in China was $3642.06 billion with the trade surplus of $155.14 billion, decreasing by 14.5% comparing to 2010. The foreign currency surplus percentage in GDP also dropped from 3.1% to 2.3% in 2011. This indicates that China has a more balanced foreign currency as well as foreign trade.
Source: http://www.askci.com/news/201201/11/113553_13.shtml
http://www.cinic.org.cn/site951/cjkx/2012-01-13/529032.shtml
30. Layers of collective action 3.0
Because the main stream of administration culture in China is still based on the central control from the Communist Party, in practice people find it hard to participate in policy making or voice out their opinions to influence the government when facing their community issues.
However, collective actions through Internet develop rapidly in China in recent years, and it affects government¡¯s action, serving as its critical reference of the popular will within the community. This new form of cyber-democracy is gaining more influence now.
Source : http://wuguoguang.com/wp-content/uploads/2011/03/2005a-INFORMATION-
TECHNOLOGY-PUBLIC-SPACE-AND-COLLECTIVE-ACTION-IN-CHINA.pdf
Personal experience
31. Pro-business climate 4.0

With the open-door policy and the reformation goes on, businessmen have received a much better reputation than ever before. In particular areas like Guangdong Province, people regard entrepreneur as an honorable career, and most of them dare to take that risks and share the same eager to open their own business.
Source: personal experience, http://news.163.com/09/0706/07/5DH9150U000120GR.html
32. Government enterprises 2.0
Because of the financial crisis in 2008, Chinese government spent 4 trillion RMB to stimulate the economy in order to fight against the deteriorating economic condition. However, most of the money flowed into the government enterprises, allowing them to monopolize particular fields and expand to other areas. The monopoly enacted by these enterprises greatly damaged private companies¡¯ opportunity to thrive in the market.
Source: http://news.hexun.com/2010-11-10/125557391_1.html http://finance.qq.com/a/20100323/003237_2.htm
33. International Security Agreements: 5.0
Because China has one of the most powerful military forces in Asia, the strong home armies could protect China from foreign facts. Chinese military power is now catching up with United
States, the most advanced western country in military. Hence China scores high in national security.
Source: http://junshi.xilu.com/2011/0312/news_343_145884.html http://www.hsw.cn/news/2008-12/23/content_10490640.htm
34. Protection of domestic enterprises from government mandated costs 4.0
Since China is a developing country, its market norms and regulations are still far from perfect comparing to the western countries. In addition, Chinese government¡¯s poor law enforcement on regulating enterprises had greatly reduced government mandated costs for business. So it is easy for those intended enterprises to take advantage of bypassing these laws in different areas.
For example, reporters have exposed the wide range usage of illegal cooking oil in restaurants around the country in recent years. It shows business will ignore regulations when a country does not have strong government law enforcement and thorough laws.
Source : http://cdcd.scol.com.cn/html/2012/01/007001003_951635.shtml
http://news.enorth.com.cn/system/2011/05/15/006552112.shtml
Personal experience

CHINA - POLICY ANALYSIS – MICHAEL H.
Comparison of China's economic policies to MIEPA criteria as prepared by a native student of
China Michael H., studying in the US in May 2012.
RATING SUMMARY - CHINA POLICY ANALYSIS – MICHAEL H.
POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE
1 4.0 12.0 15.0 80 %
2 2.0 6.0 15.0 40
3 2.0 6.0 15.0 40
4 3.8 11.4 15.0 76
5 4.0 12.0 15.0 80
6 4.5 13.5 15.0 90
7 4.0 12.0 15.0 80
8 3.8 11.4 15.0 76
9 4.0 12.0 15.0 80
10 4.5 13.5 15.0 90
11 4.8 14.4 15.0 96
12 5.0 10.0 10.0 100
13 4.5 9.0 10.0 90
14 5.0 10.0 10.0 100
15 4.0 8.0 10.0 80
16 3.5 7.0 10.0 70
17 4.0 8.0 10.0 80
18 1.2 2.4 10.0 24
19 1.5 3.0 10.0 30
20 2.0 4.0 10.0 40
21 3.5 7.0 10.0 70
22 4.0 8.0 10.0 80
23 3.2 6.4 10.0 64

24 2.0 4.0 10.0 40
25 1.5 3.0 10.0 30
26 2.0 4.0 10.0 40
27 4.5 9.0 10.0 90
28 2.0 4.0 10.0 40
29 4.0 4.0 5.0 80
30 2.0 2.0 5.0 40
31 4.5 4.5 5.0 90
32 2.0 2.0 5.0 40
33 4.5 4.5 5.0 90
34 3.5 3.5 5.0 70
TOTAL 115.3 251.5 365.0 68.9%
===== ====== ===== =====
Return to MIEPA's Home Page
POLICY ANALYSIS - MICHAEL H.
INDIVIDUAL POLICIES
1. Freedom from internal control: 4.0
People in China can move freely inside the country. The most active period of domestic population flow in China was 1990s. The number of floating population increased from 1993 in
70 million to 2000 in 140 million. Citizens of China can move to anywhere they want to and are welcome to start their business, but they still need to apply for local citizenship of the destination state.
Source:1)Personal 2)http://www.china.com.cn/chinese/zhuanti/253189.htm
2. Freedom of speech 2.0
China does not have freedom of speech, actually is about attacking national leader's . Because attacking leader in a normal country is people's right, but in China it breaks laws.
Chinese government takes actions and restricts some aggressive speech that harms the reputation of the nation. That is the reason why Google was forced to leave China.
Source:1) Personal 2) www.pandia.com/sew/2625-why-google-will-have-to-leave-china.html
3)http://www.aboluowang.com/comment/2012/0223/%E8%B0%88%E4%B8%AD%E5%9B%B

D%E7%9A%84%E8%A8%80%E8%AE%BA%E8%87%AA%E7%94%B1%E9%97%AE%E9
%A2%98%EF%BC%88%E5%8F%B2%E4%B8%9C%EF%BC%89-22265.html
3. Effective, fair police force 2.0
Chinese police does not have enough effective force because China's large amount of population.
The ratio of police force and population is 1.3¡ë in China, but it is 3.25¡ë in the U.S. In 2003, the national criminal case 4.39 million cases were made, 1.84 million cases were solved, detection rate was only 41.9%, with more than half of the criminal case couldn't be cracked.
Source:1)Personal 2)http://bbs.tiexue.net/post_3562800_1.html
3)http://www.tianya.cn/techforum/content/158/531086.shtml
4. Private property : 3.8
In China, urban land is owned by the state, and rural and suburban land, which is stipulated otherwise by law to be state land, is owned by the state too. But for other things, Citizens in
China are free to keep, use, exchange the ownership or sell their properties as long as it legal.
Source:1)Personal 2)http://wiki.answers.com/Q/What_is_land_ownership_in_China
3)http://forum.book.sina.com.cn/viewthread.php?tid=3749672&page=1#pid29911278
5. Commercial banks : 4.0
China has over a hundred different banks. Over 20 banks are domestic while the rest are international banks. By the end of 2011, total assets of financial institutions in the banking sector was 113.3 trillion yuan , 18 trillion yuan more than the early of the year, an increasing 18.9%.By the end of 2011, commercial bank loan loss reserves balance was 1.19 trillion yuan, 246.1 billion yuan more than at the beginning, a provision coverage rate 278.1%, increasing 60.4%, and further improve the ability to offset the risk. According to preliminary statistics of the people's bank, the end of March 2012 all financial institutions all balance of loans RMB 57.25 trillion yuan, a year-on-year increase of 15.7%.
Source:1)Personal
2)http://finance.ce.cn/rolling/201204/25/t20120425_16865084.shtml
3)http://bank.hexun.com/2012-04-28/140905075.html
6. Communication systems 4.5
Statistics showed that in 2009, the Chinese telecommunication industry added value increased
7%, with production of mobile phone 620 million, an increase of 9.8%, our country has become the first mobile phone giant in production and consumption power; In 2009, communication income increased by 5%, and phone users to 1.06 billion, and the mobile phone 740 million households, the mobile phone has more than 50% per capita. In the same year,3G second and third phase construction has been completed. The coverage of 3G network in China has extended to 328 cities and the coverage rate is over 70%.2009, phone users number close to 1.06 billion,

and the mobile phone 740 million households, the mobile phone has more than 50% per capita, close to the level of developed countries.
Source:1)Personal 2)http://www.cnii.com.cn/index/content/2010-08/19/content_787702.htm
3)http://pda.c114.net/32/c2806.html
7. Transportation: 4.0
By the end of 2006, the national highway a total length of 3.457 million km, increased 111800 kilometers than last year. China has 14 different metro lines available for travel within cities.
Underground railways of total 602.3 kilometers are located in 12 major cities. China will have
60% coverage of freeway throughout the whole nation. For example, people can take trains from
Beijing to Tibet, it only spend 44 hours and 4064 kilometers.
Source:1)Personal
2)http://www.moc.gov.cn/zhuzhan/jiaotonggaikuang/fazhanzongshu/jiaotongfazhan_GK/
3)http://www.baiinfo.com/article/benfenbintong/1077/5773993.html
8. Education : 3.8
In China, the education is divided into three categories: basic education, higher education, and adult education. The Compulsory Education Law of stipulates that each child have nine years of formal education. In 2004 the total number of graduates from colleges and universities was 2.8 million, which is 25% of the total high school graduate. Number of Students in Colleges and
Universities was 4.13 million, which was about 33% of the total young adult population.
Source:1)http://www.edu.cn/20041203/3123354.shtml 2)http://www.gov.cn/jrzg/2009-
07/08/content_1360365.htm
9. Social Mobility: 4.0
Formal education provided the best and most respected avenue of upward mobility, and by the nineteenth century literacy rates in China were high for a traditional peasant society. China's literacy rate today is 91.6% of the total population,95.7%for male and 87.7% for female.
Expenditures on education is up to 1.9% of GDP. Education expenditures up to 1.9% of GDP.
This creates a very good environment for businesses to grow and less people drop out of schools as their family finical condition becomes better.
Source:1)Personal 2)http://www.china-mike.com/facts-about-china/facts-chinese-education/
3)www.photius.com/countries/china/geography/china_geography_social_mobility.html
10. Freedom from outside control : 4.5
China is an independent country and Chinese people do not threatened by any of other countries.
China is to increase its defense budget in 2011, amid fears in the region that its military might is

growing. Spending will increase by 12.7% to 601.1bn yuan ($91.5bn; ¡ê56.2bn) up from 532.1bn yuan last year, officials said.
Source:1)Personal 2)http://www.bbc.co.uk/news/business-12631357
3)http://news.sina.com.cn/c/2009-12-25/025319333079.shtml
11. Protection of Domestic Enterprises : 4.8
Chinese did a good job that protect their domestic companies from foreign competition with tariffs.2011-1 July, the national import and export value is 2.02255 trillion us dollars, up 25.1%, among them: export $1.04938 trillion, up 23.4%; Imported us $973.17 billion, an increase of
26.9%. In July, the national import and export value is 318.77 billion us dollars, up 21.5%, among them: export $175.13 billion, up 20.4%; Imported us $143.64 billion, an increase of
22.9%
Source:1)Personal 2) protect their domestic companies from foreign competition with tariffs
12. Foreign currency transactions : 5.0
Chinese government requires that only the Chinese yuan is used as money in China. Only certain worldwide currencies can be exchanged in China, other than that they use the RMB.
Source:1)Personal 2)http://www.asia-planet.net/china/currency.htm
13. Border control : 4.5
China has a strict border control. China implements the opening-up policy, has opened 115 port
(including international airport, port, transit railway station and the way), distributed in the world, all of the opening set port have frontier inspection. Border check-posts is in the port of entry and exit inspection state management authority, it is the national portal. Its task is to keep the sovereignty, security and social with rank sequence, the development of international association, to all the staff by the passports, travel documents and pay the transport inspection and management implementation.
Source:1)Personal 2)http://www.bjkab.gov.cn/docc/news.asp?sortid=64&listid=68&newsid=249
14. Currency : 5.0
In China, people are only allowed to use RMB(China yuan)which is The official currency. Other currencies must be changed to RMB in banks before it was used.
Source: Personal
15. Cultural, language homogeneity : 4.0

China is a nation that contains 56 ethical groups. The Ethnic Make-up of China consists of Han
Chinese 91.9%, Zhuang, Uygur, Hui, Yi, Tibetan, Miao, Manchu, Mongol, Buyi, Korean, and other nationalities 8.1%.The religions have Daoist (Taoist), Buddhist, Muslim 1%-2%, Christian
3%-4%.Even though we have many different ethical groups, under the lead of the Chinese government, people have the same future difficulty and people work on the same goal. China is growing stronger and stronger.
Source:1)Personal
2)http://www.kwintessential.co.uk/resources/global-etiquette/china-country-profile.html
3)http://www.qstheory.cn/tbzt/mztjjytxdb/mztjdb/200909/t20090910_11247.htm
16. Political effectiveness : 3.5
Chinese government did good job on natural disasters. For example, in the year of 2008, a huge disastrous earthquake hit Wen Chuan, Sichuan province. In three years, the Chinese government successful solved the building housing problem for more than
5,400,000 households and 1,200,000 people ;Built 2989 schools, 1362 medical health centres and 1359 rehabilitation facility and so on. The recovery of the earthquake is decent.
Source:1)Pesonal 2)http://news.sina.com.cn/c/2012-01-10/124123776236.shtml
17. Institutional stability : 4.0
After new China was founded in 1949,in the correct lead of the communist party of China, through the unremitting efforts, Chinese economic system and political system, cultural system, social system has been basically established. And China has stable government, courts, schools, law enforcement for a long time.
Source:1)Personal 2)http://theory.people.com.cn/GB/82288/143843/143844/15640934.html
18. Honest government : 1.2
The Chinese government transparency lower than western countries.
So corrupted individuals and government officials are growing quickly. China's anti-corruption watchdog has said that 106,000 officials were found guilty of corruption in 2009, an increase of
2.5% on the year before. The number of government officials caught embezzling more than one million yuan ($146,000; ¡ê91,000) jumped by 19% over the year.
Source:1)Personal 2)http://news.bbc.co.uk/2/hi/8448059.stm
3)http://www.zjzfcg.gov.cn/new/llsw/250167.html
19. Common laws : 1.5
There are more and more corrupted government officials in China, so it's impossible that governments have the same set of non-conflicting laws, justice and dispute resolution throughout the population. Someone says that the law is one of weapons the few people used to restrict most

people. Obviously, the few people mean people who are rich and powerful and most people are ordinary people. Even though two people did the same thing and broke the law, if one person has enough money and he can buy the judge, he will get lighter punishment or free.
Source: Personal ; http://en.wikipedia.org/wiki/Common_law
20. Central bank : 2.0
The central bank in China belong to the government, with the Treasury together, smaller independence. Compared to other countries. For example: the U.S. central bank model, directly respond to the congress, strong independence, Britain, nominally subordinate the finance ministry, relative independence, Japan, belonging to the finance ministry, independence is small.
Source:1)http://www.chinaqking.com/%D4%AD%B4%B4%D7%F7%C6%B7/2009/25643.html
21. Domestic budget management : 3.5
In 2010 the national financial expenditure was 8.9 trillion, exceed the expected number 8.453 trillion nearly 500 billion. In the same year ,China tax income was 7.739 trillion. Governments spent more than tax revenues by 12% .
In 2011, the national financial expenditure was expected to be 9.791 trillion (including 900 billion deficit), spending is close to 10 trillion, the number is more than 2010 budget spending
13000.The national tax revenues finished 8.972031 trillion yuan. Governments spent more than tax revenues by 10% .
Source:1)http://www.chinaacc.com/new/253_268_201101/02xi1288154140.shtml
2)http://www.chinanews.com/cj/2011/01-09/2775119.shtml
22. Government debt : 4.0
By the end of March 2010 ,China had foreign debt balance about 443.2 billion us dollars, accounting for 10% of GDP. .By the end of June 2011,China's outstanding foreign debt amounted to US$642.5 billion, at 17% to GDP. The total sum of external debts in China accounts for about 50% of GDP, and the major developed countries and developing countries average 60% or more.
Source:1)http://cqhkf.blog.163.com/blog/static/4454975620106492510318/
23. Economic statistics : 3.2
In China, the income level of resident enhances unceasingly. In 1957, urban per capita disposable income was 235 yuan, and rural per capita net income was 73 yuan. In 2000, urban per capita disposable income was 6280 yuan, more than 1957 years increased 25.7 times; Rural per capita net income was 2253 yuan, more than 1957 years increased 29.8 times.1952, per person per year consumption level was 76 yuan, in 2000 was 3415 yuan.Most recent census

shows that China has 1.37 billion people. China has over 900 million mobile phone users, phone users reach 1.17 billion ,Facebook users in China doubled to 700000 within a month ,China¡¯s media activity has rocketed in recent years. It now has 2,000 Newspapers;9,000 Magazines;287
TV channels;700m Mobile phone users;338m Internet users;180m Bloggers. China's Internet
Users is 338 million, which is outnumber U.S. Population .It seems China's economy is going very well.
Source:1)http://www.stats.gov.cn/tjfx/ztfx/cszkhh/t20020530_20805.htm
2)http://www.chinatoday.com/data/data.htm
24. Protection of public health and safety : 2.0
In this respect, China has improved a lot, but still not good enough.60 yeas ago, the infant mortality rate of China was about 200 ¡ë; In 2000,it was 28.38 ¡ë; 2008 was 14.9 per thousand. In
2004, the infant mortality rates of the U.S. was 7 ¡ë; In 2000 Japan the infant mortality rate was
3.2 per thousand. China has the world's second largest tuberculosis epidemic, with more than 1.3 million new cases of tuberculosis every year.
Those mortality rate in China is much higher as compared developed countries like the Unites
States, Japan, and Western Europe.
Source:1)Personal 2)http://baike.baidu.com/view/1348187.htm
3)http://en.wikipedia.org/wiki/Tuberculosis_in_China
25. High Wage Policies: 1.5
China's national income is NO.2 in the world. But the average income is very low because the population is too much. For example, in 2010, the average per capita income of the USA is about
$45000, China's per capita income is 4000 to 4500 dollars, the number of United States' is more than ten times of China's. As the same time, the average house price of every square metre for
Beijing is 8000 yuan , and Beijing is about 16807.8 square kilometers, that means the total land price of Beijing is 130 trillion RMB. Converted into $20 trillion, equivalent to a year and a half of the total economy in the United States. If a Beijing people wants to buy a 100 square meters house,I t costs 2.38 million yuan, which means a person need to work 100 years to buy a house.
Source:1)http://xinyang.bbs.house.sina.com.cn/thread-9634871-1.html 2) Personal
26. Environmental Protection: 2.0
Due to Chinese government focus on economic development, they don't pay much attention to the protection of the environment. In China's environmental pollution, air pollution and water pollution is the biggest problem. There are some most important reasons.1)A lot of enterprises of the developed countries moving to developing coutries.2)Many enterprises don't pay attention to the protection of the environment.3)Government departments only pursue the economic indicators, regardless of the lives of ordinary people.4)Poor treatment for the pollution caused by the enterprise. Therefore I give a low score .

Source:1)http://zhidao.baidu.com/question/311225192.html 2)Personal
27. Strong Army: 4.5
China has a stronger military power and can preserve itself. People can establish their business without warry. China's military power is NO,3 in the world. China has 450 nuclear warheads,
19000 tanks, 30000 armored vehicles ,1750 fighters, 1250 helicopters. The stable and safe situation in China creates a good environment that enables businesses to grow healthier and faster.
Source:1)http://tui.qihoo.com/20553287/article_3170009.html 2)Personal
28. Foreign Trade Impact: 2.0
Enter the new century, the international trade development is very fast and foreign trade is around 60% of China's total GDP. For example,2008, our foreign trade import and export value was 2.56163 trillion dollars, the total GDP was 4.521827 trillion us dollars, China's foreign trade was 56.65% of total GDP.
The trade is too high that China is too depending on trade and is subject to external shocks to its economy
Source:1)http://finance.eastday.com/m/ljzlt/u1a3580076.html 2)Personal
29. Management of Foreign Currency Budget: 4.0
In 2010,China, Annual GDP is 39.7983 trillion yuan, according to the comparable price, 10.3% increase from the previous year, growth speed up 1.1% more than the previous year. Divide a quarter to see, quarter grew 11.9%, 10.3% growth in the second quarter, 9.6% growth in the third quarter, the fourth quarter growth of 9.8%.And foreign trade export was $1.57793 trillion, import was $1.39483 trillion. The trade surplus was 183.1 billion dollars.
Source:1)http://money.163.com/11/0120/10/6QR6PU0I00254L6F.html
2)http://news.xinhuanet.com/fortune/2011-01/21/c_121010431.htm
30. Layers of Collective Action: 2.0
Due to China has a big number of population, it is very hard to speak collective actions. China can not direct election universally because of the current social condition that people
still don't have a lot of experience of elections. It causes government officers maybe are not the right ones who people like and also create Government offices do not take criticism very well.
Sometime people will give up to open their business because those reason.
Source: Personal http://kbs.cnki.net/forums/13126/ShowThread.aspx

31. Pro-business Climate: 4.5
China private enterprise individual business create average employment scale are 13.31 and 2.03, this means the one person have a person's entrepreneurial create 13 employment opportunities, and one person establish business create 2.Therefore government encourage people to create their business. In other hand, there are more and more people realize that being entrepreneurs can bring fortune, higher social status and better life.
Source:http://www.sunbus.cn/static/a15159ff2fd3.html
Personal
32. Government Enterprises: 2.0
After China entered WTO, people get more chances to open and run their own business. The increasing role of the NON-STATE sector of the economy is helpful for resolving many problems on China's road to a market economy. Chinese private enterprise has become an important part of the national economy, the GDP has created accounted for 50% of the national and social employment rate is up to above 70% .It will not only relieve the pressure of unemployment and boost the urbanization process, but also promote overall economic growth.
Source:http://www.cctv.com/lm/124/31/70782.html http://lianghui2009.people.com.cn/GB/145749/8920623.html
33. International Security Agreements: 4.5
China become more and more strong that it need not to worry about obvious threats from any other country. It created a good environment for people to run their business.
Source: Personal
34. Protection of Domestic Enterprises from Government Mandated Costs: 3.5
Now, China's preferential tax policies are promoting the rapid development of high and new technology industry. However, "Production" value added tax increases the tax burden of the high and new technology enterprise. For example, Dalian high-tech industrial parks value added tax average tax burden is close to 20%, higher a lot than normal enterprise average tax burden. It reduced the enthusiasm of the enterprise technical renovation and influenced high-tech investment, also obstruct the enterprise technology and equipment to update, the enterprise technology development and expansion of production can't development and continue normally.
Source:Phttp://www.chinaacc.com/new/287%2F292%2F332%2F2006%2F3%2Fma9415102629
01360026440-0.htm http://www.chinabaike.com/z/ws/lw/cw/659920.html

CHINA - POLICY ANALYSIS – AMANDA Z.
Comparison of China's economic policies to MIEPA criteria as prepared by a native student of
China Amanda Z., studying in the US in May 2012.
RATING SUMMARY - CHINA POLICY ANALYSIS – AMANDA Z.
POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE
1 4.0 12.0 15.0 80 %
2 1.5 4.5 15.0 30
3 2.5 7.5 15.0 50
4 4.2 12.6 15.0 84
5 4.5 13.5 15.0 90
6 4.0 12.0 15.0 80
7 3.0 9.0 15.0 60
8 3.3 9.9 15.0 66
9 4.0 12.0 15.0 80
10 4.0 12.0 15.0 80
11 3.5 10.5 15.0 70
12 4.8 9.6 10.0 96
13 3.5 7.0 10.0 70
14 5.0 10.0 10.0 100
15 4.8 9.6 10.0 96
16 2.8 5.6 10.0 56
17 4.0 8.0 10.0 80
18 1.0 2.0 10.0 20
19 1.8 3.6 10.0 36
20 3.3 6.6 10.0 66
21 3.3 6.6 10.0 66
22 2.8 5.6 10.0 56
23 2.5 7.5 10.0 50

24 1.5 3.0 10.0 30
25 1.5 3.0 10.0 30
26 2.5 5.0 10.0 50
27 4.8 9.6 10.0 96
28 4.5 9.0 10.0 90
29 3.3 3.3 5.0 66
30 1.5 1.5 5.0 30
31 4.0 4.0 5.0 80
32 1.8 1.8 5.0 36
33 4.0 4.0 5.0 80
34 4.0 4.0 5.0 80
TOTAL 111.5 240.3 365.0 65.9%
===== ====== ===== =====
Return to MIEPA's Home Page
POLICY ANALYSIS - AMANDA Z.
INDIVIDUAL POLICIES
1.
Freedom from internal control 4.0
In China, there is no any forced to control citizens move from one place to another either within one state or cross states. China is also welcome for foreigners move into China to open business. The only rule is any citizens and foreigners have to apply temporary identity card once move into China or others province. This rule creates good environment for business people for their business because they can any where inside the country in anytime.
Source: 1)Personal
2)http://www.kj2000.com/kjasp/newinfo/content/2007_7/20077485918.htm
2. Freedom of speech 1.5
In China, society freedom speech system is very serious problem. This is reason why
Google, Facebook, YouTube etc were forced to leave China. Chinese people also naturally formed a habit that not talk about or announcement any politics in any public place. Even in

private space, Chinese people are used to talk about politics as less as possible. Overall, the freedom of speech system still has a long way to go in China.
Source: 1)Personal
2)http://www.boxun.com/news/gb/pubvp/2012/02/201202232316.shtml
3)http://boxun.com/news/gb/pubvp/2011/03/201103261009.shtml
4) http://www.epochtimes.com/b5/10/3/15/n2845555.htm?p=all
3. Effective, Fair Police Force 2.5
For most of Chinese people, the police work efficiency depends on certain nepotism and money relations. If your case just a tiny fraction, the police department may not management it or may not pay attention, unless you have a very good connection inside of police department.; If your case is big, police department may have attention on your case, but it may not as quick as your thoughts. China has a lot of cases that happened inside of political level. They are reciprocal protection to each of political officials, especially high in the high political class. Such as the big political case which was “Bo Xilai” case that just happened a month ago in China. It was the biggest political scandal in China. Overall, the Chinese police department is hard to do it quickly and fair.
Sources:
1)http://www.bbc.co.uk/zhongwen/simp/chinese_news2012/03/120315_boxilai_profile.shtml
2)http://www.bbc.co.uk/zhongwen/simp/chinese_news/2012/04/120420_from_wanglijun_to_bo xilai_.shtml
3)http://info.51.ca/news/china/2012/04/21/253495.shtml
4)http://www.iask.ca/news/china/2012/0422/130982.html
4. Private Property 4.2
After the 70s‘, Chinese government was looking forward the equality of the private property and public property. With the continuous improvement of the political and legal, China also gradually realize the private property and public property equality of consistent. As long as the situation is legal, private property can be bought and sold private property, such as houses, cars, etc. As long as it is legal, any foreigners' private property is protected, and foreigners can also be bought and sold private property in China. Therefore, the private property is protected by country and at all levels of the court in government.
Source: 1) http://www.studa.net/sifazhidu/100626/17030461.html
2)http://news.xinhuanet.com/legal/2006-08/22/content_4993901.htm
5. Commercial Banks: 4.5
There are five big state-owned commercial Banks and over a hundred different banks in China. The five big state-owned basic is comprehensive commercial Banks, business

covers a range widely, multiple, they represent the Chinese finance most abundant capital and strength. All banks in China are loan huge amount of money to entrepreneurs to start their business. This is going to help create more jobs in market. As a business man in self-owned medium company, my dad said it has been easy to loan money from banks. Therefore, the commercial banks are being good supporter to enterprises.
Source: 1) Personal
2)http://blog.ifeng.com/article/17451950.html
3)http://baike.baidu.com/view/1953574.htm
6. Communication System 4.0
Report shows that by the end of 2008, China's Internet penetration rate was 22.6%, it was the first time the proportion above the global average at 21.9%. At the same time, the number of internet users reached 298 million, broadband Internet users reached to 270 million and the number of national CN domain reached to 13.572 million, this three indexes are continue being 1st in the world. According to the forecast, the scale of China's ‘netizens’ still maintained a rapid growth of power. Mobile phones instant communication is the highest permeability mobile phone applications, but in 2011 the utilization rate still had large increased, it was up to
15.4%. It was higher than Internet usage (by the end of December in 2011, whole users of instant communication utilization rate is 80.9%)
Source: 1) Personal
2)http://pda.c114.net/37/a172870.html
3)http://www.askci.com/news/201204/06/114047_51.shtml
4)http://www.gmw.cn/01gmrb/2009-01/14/content_878286.htm
7. Transportation: 3.0
According to data, from 2001 to the end of 2011, China' road construction consumed 1 trillion funds and build 85000 kilometers. And it made the debt ratio as high as 70% of the total funds. In addition, roads couldn't keep up with the development of the city. Overall, the road congestion has become a big major problem in any big cities and small towns like Beijing,
Shanghai, and Guangzhou.
Source: 1) Personal
2)http://auto.hexun.com/2012-04-20/140626901.html
8. Education. 3.3
According to a report that from UNESCO, China is the 8th country which is in the highest illiteracy rates around the world ten countries. China has the world's largest education system, and is also the largest population of the developing countries, although China has been committed to the national literacy work, but adult illiteracy still the world number. In 2011 the national university entrance exam register a number 9.33 million the acceptance rate 72.3%.
2011 China's university graduates more than 660 million. However, compared with 1.3 billion

population as a large base, the number of college students in our country is too little. According to some data show that number of college students in our country is only 3% of the total population, the university enrollment rate only listed the world 78th. And the quality of some famous universities in China are going down now.
Source: 1)Personal
2)http://www.chinadaily.com.cn/language_tips/2011cpc/2011-
03/02/content_12104433.htm
3)http://www.ce.cn/macro/more/201106/04/t20110604_22462101.shtml
4)http://edu.sina.com.cn/gaokao/2011-06-03/1636298559.shtml
9. Social Mobility 4.0
In the past 50 decades, social mobility in China has changed wildly. It does not develop as stable as other countries. However, the social mobility mode tend to be as sample as easy since the reforming and opening in the mid of 60s' in China. After the reforming and opening, the ruling party gave up the political reform movement and cleaned up the past "leftist" thought.
Chinese government focused on how turn to go up economic construction and came out with the
"let part of people to become rich first up" policy. In my hometown, most of the enterprise was established in 80s' and 90s'. This created a very good environment for business to grow. My father is one of these, although his enterprise is not big, but his success also showed the Chinese in the early stage of the economic policies of the wise.
Sources: 1)Personal
2)http://www.sociology.cass.cn/shxw/shld/P020050602404622652452.pdf
10. Freedom from outside control 4.0
China is an independent country. Chinese citizens are under China' jurisdictions even they live out of country. For example, Lai Changxin, who was the one of China's most wanted smuggler, the chairman of the biggest smuggling case – “Xiamen Yuanhua” in 1999 in
China. In the past 12-year, Chinese government has been doing any possible to arrest he even though he immigrated to Canada in 1999. Therefore, no matter where you are, you are still under the jurisdictions if you are Chinese citizen.
Sources:1)http://en.wikipedia.org/wiki/Lai_Changxing
2)http://www.montrealgazette.com/life/deported+Canada+goes+trial+China/6423699/story.html
11. Protection of Domestic Enterprise: 3.5
According to China Customs statistics Department, the nation amount of imports and exports were USD 533.03 billion from January to February in 2012. The export was USD 264.4 billion; import was USD 268.64 billion. In February 2012, the nation amount of imports and exports were USD 260.43 billion. The export was USD 114.47; the import was USD 145.95.

Although it shows the export and import below the balance, Chinese government still make law and have high tariffs for foreign businesses to protecting domestic enterprise.
Sources:
1)http://www.chinacustomsstat.com/aspx/1/NewData/Stat_Class.aspx?state=3&t=2&guid=4752
2)http://zhs.mofcom.gov.cn/aarticle/aa/201203/20120308037392.html
12. Foreign Currency Transactions 4.8
National currency which is USD are acceptable in China. This is only foreign currency works in business market for international business. Otherwise, there is only one currency which is RMB allow to transact in business market.
1.
2.
3.
Sources:
1)Personal experience
2)http://www.journalofaccountancy.com/Issues/2011/May/20113840.htm
13. Border Control 3.5
While China's economic developing, China make greater efforts in border control.
Chinese government is very strict to process smuggling case to order to protect domestic profits.
Although there are laws to force people brings goods from outside country, there are still lot of ways that smuggler import and export goods by using grafts and corruptions.
Sources:
1)Personal
2)http://www.montrealgazette.com/life/deported+Canada+goes+trial+China/6423699/sto ry.html
3)ht tp://www.strategypage.com/on_point/20100817231128.aspx
4) http://finance.ifeng.com/news/20100913/2616216.shtml
14. Currency: 5.0
There is only one currency acceptable in China which is CNY( Chinese Yuan, RMB).
This is official currency in China.(Not including Hong Kong and Macau) Any foreign currency has to exchange to CNY in order to start businesses, investments, or any actions in Chinese market.
Source:
1)Personal
2)http://www.gov.cn/test/2005-06/16/content_18254.htm

15. Cultural, Language Homogeneity 4.8
China is a multicultural country. It contains 56 ethical groups. Some of ethical groups are distribute in Taiwan. Most of Chinese are Han ethnic, but each ethnic does not contradict to each other. Mandarin is the official language in China. It is the language to connect to 56 ethical group. Mandarin became official language since Hong Kong and Macau return to China and it became the requirement class to students who study in Hong Kong and Macau in school.
Source:
1)Personal
2)http://121.8.98.71/yw/gzpth/Article03/ShowArticle.asp?ArticleID=52
3)http://en.wikipedia.org/wiki/Chinese_language
16. Political Effectiveness. 2.8
On July 23th 2011, the world was shocked by the train rear-end collision happened in
Wenzhou, Zhejiang province, China. Although the government responded very quickly, there were still a lot of complains why the government stopped search for survivor and why reopened the train track just in four days without any explanation. The official report was responded to the public after five months. Chinese are still wildly questioned the political effectiveness.
Source:
1)Personal experience
2)http://chinese.carnegieendowment.org/publications/?fa=45388
3)http://www.aisixiang.com/data/48803.html
4)http://info.zh28.com/zhuanti/49005/
17. Institutional stability: 4.0
Due to the political system and election system, China has never changed the political system since 1949. With the development of society, the construction of Chinese military, the improvement of laws and education makes China's social system going to stabilized trend.
Sources:
1)http://military.people.com.cn/GB/8221/72028/76059/78907/6319446.html
2)http://www.cltv.cn/zixun_xiangxi.php?id=45921
3)http://news.xinhuanet.com/newscenter/2008-11/20/content_10388506_1.htm
18. Honest government : 1.0
In 2010, Chinese felt they were unhappy with the quality of life in China due to the credibility of the government. There are 600,000 government vehicles in whole country, all of vehicles cost is 38% of expenditure. In order to support government employee, there are almost half of finance comes from national income.
Sources: 1)http://www.chinainperspective.com/ArtShow.aspx?AID=1511

2)http://www.voanews.com/chinese/news/20110104-Chinas-New-Low-Satisfaction-
112861649.html
3) Personal experiences
19. Common Laws: 1.8
Due to historical, institutional inertia, the role of social practices, the rule of management and many other factors, China has formed a highly centralized political and legal system in China. In other words, you will get better benefits if you have good connection with major level of social class.
Sources:
1) Personal experiences
2)http://theory.people.com.cn/GB/68294/120979/124345/7481139.html
20. Central bank: 3.3
Due to have come under pressure by all sectors of the community of the world, the Central bank made the YUAN's exchange rate has been increased in recent years. Although the YUAN's exchange rate has been increased, but Central bank still has good managed to keep the exchange rate at good expectations in in recent years.
Sources:
1)http://money.forex.com.cn/html/c214/ZhiShi/2010-01/1147636.htm
2)http://money.forex.com.cn/html/c214/ZhiShi/2010-01/1147636p2.htm
3)http://money.forex.com.cn/html/c214/ZhiShi/2010-01/1147636p3.htm
4)http://wiki.mbalib.com/wiki/?????
5)http://baike.baidu.com/view/529049.htm
6)http://money.cnstock.com/institution/jrywnew/201201/1777834.htm
7)http://www.ce.cn/macro/more/201201/05/t20120105_22976874.shtml
21. Domestic budget management: 3.3
In 2009, 2010 and 2011, the annual national tax revenue were \5,9515 trillion, \7,3202 trillion and \8,9720 trillion. The annual expenditure were \7,5874 trillion, \8,9575 trillion,
\10,8930 trillion. And the GDP were \340507, \374557.7, and \ 458217.58. According those number, the deficit was 4.8% of GDP in 2009; the deficit was 4.4% of GDP in 2010; the deficit was 4.1% of GDP in 2011.
Sources:
1)http://www.360doc.com/content/12/0129/19/8231902_182571191.shtml#
2)http://www.caijing.com.cn/2011-01-21/110624654.html
3)http://www.mof.gov.cn/zhuantihuigu/czjbqk/czsr/201011/t20101101_345416.html
4)http://www.china.com.cn/economic/txt/2010-02/05/content_19376642.htm
5)http://zhoucaiqi.com/blog/ratio-of-state-revenue-to-gdp-in-china-2330.htm
6)ht

22. Government debt: 2.8
In 2011, due to the global financial problems, the total Chinese government of debt has been increased to 43.69% of GDP in the same year. In the end of 2010, the local government debt had reached $10.7 trillion. It was nearly 27% of GDP in 2010. As the result, it shows that
China is facing significant risks.
Sources:
1)http://money.163.com/11/1011/16/7G3M4PL20025335L.html
2)http://www.360doc.com/content/11/0418/06/535749_110418333.shtml
3)http://www.rsczj.gov.cn/show.asp?id=2254
23. Economic statistics: 2.5
Since China open the door to the world, different part of statistics data has opened to the any site of the world. As the economy globalization, any information will be published by the government though Internet, media etc. Such as the ownership of the car was 3.7%, the average of income in 2011was 23979 RMB. Although people can find the information by any site of ways, but Chinese are still considering about the reliable and trustable of the statistics by the government.
Sources:
1)http://news.stcn.com/content/2012-01/17/content_4489778.htm
2)http://news.sina.com.cn/c/sd/2012-02-21/115023967143.shtml
24. Protection of public health and safety: 1.5
Compared with 2000, the incidence rate of TB was reduced by 61% in 2011, but tuberculosis still is the major problem in China. In 2011, the number of tuberculosis patients about 1.3 million, it was about 14.3% of the world, and ranked in 2nd world. In 2010, the deaths number of infant and children who under-5 are 209,000 and 261,000. In other words, the average deaths number of infant by daily were 573 and the average deaths number of children who under-5 were 715. On the other hand, the problem of “Sanlu Milk Powder” has made many
Chinese people to pay more attention and doubt some departments of China.
Sources:
1)http://business.sohu.com/20110322/n279930677.shtml
2)http://zh.wikipedia.org/wiki/2008??????????
3)http://www.gxcity.com/2011/0922/22257.html
25: High Wage Policies: 1.5
Due to the population of China, there is a difficult to have high wage. According to some date, in 2007 the gap of the highest 10% income between the lowest 10% income had been increased 23 times from 7.3 times in 1988. In 2007, the population of China was 1,321,290,000.

The personal asset over $1 million was only 415,000. It was only 0.03% percent of the total population. So the average of income has been into a very serious problem in China. Overall, the average of middle class of workers still have difficulty to own apartment and car etc by their income.
Sources:
1) http://wenwen.soso.com/z/q221439701.htm
2)http://blog.cnfol.com/lml660660/article/1298728190-35320990.html
3)http://www.globalview.cn/ReadNews.asp?NewsID=21587
4)Personal
26. Environmental Protection: 2.5
The environmental is the major problem in China even though Chinese government has been working on it for last few decades. The quality of air and water pollution are the two biggest problems in China. According to research, there are 23.3% can't be used for irrigation because of the water quality pollution and 85% does not match the human drinking water standards etc. Those environmental problems will decrease businesses opportunities in China.
Sources:
1) http://zhidao.baidu.com/question/24149102
1. 2) http://news.sohu.com/20060525/n243414208.shtml
3)http://it.sohu.com/20071108/n253136868.shtml
27. Strong Army: 4.8
Undeniably, China is getting stronger at military now. This situation creates a good and safe environment for businesses to grow healthier and fast without consider for other unstable elements.
Sources:
1) http://military.people.com.cn/GB/42969/58520/5185634.html
2)http://www.tpyjs.com/html/jsls/2011/0307/210.html
28. Foreign trade impact: 4.5
Since joined in WTO, the economy is developing rapidly in China. In 2010, the GDP is
$60483.74 million in China, and the trade is $29727.6 billion. The trade worth nearly 50% of
GDP. The same as 2010, the trade worth nearly 50% of GDP in 2011.
Sources:
1) http://finance.chinanews.com/cj/2012/01-18/3613767.shtml
2)http://finance.people.com.cn/GB/13775080.html
3)http://zhidao.baidu.com/question/361045420

29. Management of Foreign Currency Budget: 3.3
In 2011, China's import and export surpluses significantly reduced. In 2010, the trade surplus year minus 7.2%. In 2011, the trade surplus recession
14.5%. In 2010, China's trade surplus is $183.1 billion. But in 2011, it is about $160 billion.
Sources:
1) http://cn.reuters.com/article/macroeconomicsNews/idCNSB140054020120220
2)http://www.chinese.rfi.fr/??/20120110-??2011??????????
3)http://www.gov.cn/gzdt/2012-01/10/content_2041005.htm
30. Layers of Collective Action: 1.5
Due to the Chinese Government voting system, Chinese does not have any power to vote. Even though Chinese really want to know the progress during the election, but it only public to the mayor's level and it is only decided by the mayor level. Due to this system, the media of China not allow to public anything that against to political. The corruption are always exist in the different level of government and never stop.
Sources:
1)Personal
2)http://www.jstor.org/pss/209621
31. Pro-Business Climate: 4.0
More and more Chinese students realized it is good time to back to China after study on abroad. Chinese government encourages students or people who have returned to China to start business. Your social status will be charged as well as you success on your business.
Sources:
1) Personal
2)http://www.kesum.com/zjzx/mjzl/beijin/ljh/200901/102945.html
3)http://www.qikan.com.cn/Article/sysd/sysd201122/sysd20112206.html
32. Government Enterprises: 1.8
Despite the fact that the quantity number of State-owned enterprises is low, it is the most serious problem in China. Currently, there are 128 State-owned enterprises in China. But there are only 20% of companies making a profit, such as China Petrochemical Corp, China
Sinopec Corp. The vast majority of State-owned enterprises face economic difficulties, or the excess, either because the policy factor in each face in each face of large areas of policy. The
State-owned possession of social resources more than 60% of State-owned enterprises, contribution to GDP growth of less than 30% per year, not to absorb labour force 20%.
Sources:
1) Personal

2)http://www.zaobao.com/special/forum/pages8/forum_zp110531.shtml
3)http://news.hexun.com/2010-03-13/122969265.html
4)http://www.zjkcz.gov.cn/tabid/70/InfoID/461588/Default.aspx
33. International Security Agreements: 4.0
China has become a strong country at military. While some countries are struggling to cut spending or planning to save billions of dollars on construction of costs at military, China dose not intend to reduce the cost at military. China still actively improving the military power and naval strength. It create a good and safe environment for entrepreneurs running businesses.
Sources:
1)http://www.bulletin.cas.cn/gkml/2011D3Q/xxaq/201105/t20110520_3138042.html
2)http://military.cnnb.com.cn/content/channel/jstd/c209/2012/0220/3010001837.shtml
3)http://mil.huanqiu.com/Observation/2012-02/2450306.html
34. Protection of Domestic Enterprises from Government Mandated Costs: 4.0
Despite the fact that Chinese government decrease tariffs over the past 10 years, most of special items still keep at high tariffs. For example, in 2001, the import tariffs for formula was
25%. After a decade, the tariffs for formula are still over 22%. For some ordinary countries, such as America, tariffs are over 57%, this means Chinese companies have advantage.
Sources:
1) http://ccnews.people.com.cn/h/2011/1209/c227936-984869969.html?prolongation=1
2)http://finance.people.com.cn/GB/15001262.html 2.
DISCLAIMER
All the information and conclusions in each country analysis are solely the responsibility of the individual student and have not been verified, corrected, checked for copyright infringement or evaluated in any way by MIEPA or Mike P. McKeever. You are solely responsible for the results of any use you make of the information and conclusions in these studies. Use them at your own risk as interesting supplemental information only instead of seasoned judgments about the policy factors contained herein. Each student has granted permission for his or her work to be displayed here under his or her own name or wishes to remain anonymous and have either created a pen name or used no name at all; if you wish to contact them for any reason, forward your request to
MIEPA and the student will be notified of your interest.
To learn more about other countries, click to other files here:
Return to MIEPA's Home Page
Return to MIEPA 's Home Page list of country studies
Winning Essays: There Are Alternatives Project (TAA)
Essay: Balanced Trade: Toward the Future of Economics

Moral Economics
Web address: http://www.mkeever.com
CONTACT MIEPA:
To contact MIEPA, please send an email to this email address: mckeever.mp@gmail.com
Please place the acronym MIEPA in the subject line.