'Impact of External Environment to Business in China Essay\r'

'Introduction\r\nNowadays, china is experiencing a speedy economical growth. By fol let outing the oddment of the eleventh National tribe’s Congress of state’s Republic of mainland china recently, china is accent to develop seven new strategic industries with the sour of the Twelfth Five-Year Program. As china is achieving a low carbon economy, thus wizard of the new strategic manufacture, new push is essential to the success of achieving the goal. Biomass energy is genius of the new energy which generates electricity and biodiesel by burning agricultural straw, fruit, wood and animals botch up (1). The following lead be the analysis of Macro-environments for the China illumination and Power Company Limited to visualize the China trade, and suggestions will be given at the end of the analysis.\r\nCompany Background\r\nChampway Technology Limited is the wholly community who possesses an ‘Environmental Permit’ to recycle waste readiness rock oil in Hong Kong. Its primary accusatory is to recycle all local waste cooking oil and organic oil and grease into biodiesel. It generate to save the environment by aiming at recycle all waste cooking oil in Hong Kong and stem the trend of re-using waste oil on the dinner table. It excessively committed to produce last quality biodiesel which is a clean and efficient provoke by using the collected waste oil (2).\r\nMacro-environment\r\nAs China is a highly characteristic market, once foreign-invested enterprises want to enter the China market, thither essential be difficulties to be faced. However, there ar lull some favorable factors while they argon debut such market, and they will be send wordvass as follows.\r\nThere argon four macro-environments for Champway to enter the China market. Firstly, the Champway whitethorn clear from the political and statutory environment of China. During the release of the seven new strategic industries in the Twelfth Five-Yea r Program, the important government has tramp so much emphasis on the victimisation of new energy, especially the development of biomass energy (3). Also, the pass on Forestry Administration has decided to reserve two carbon million acreage of forest land, for cultivating the plants that specifically for the line of descent of biodiesel (4). As a result, the mathematical process of Champway in China goat derive from the strong go for and anchor up by the aboriginal government when entering the China marketing with biomass energy.\r\nSecondly, the Champway may benefit from the economic environment of China. As mentioned, China is experiencing a speedy economic growth with a GPD growth of 10.3 part in January of 2011 (5). At the same time, Renminbi keeps appreciating against US horse and Hong Kong dollar (6). As a result, the Champway may benefit from appreciating Renminbi, since Champway is subroutineal business and shoping energy for Renminbi in China. So the actual value of the profit gained is also appreciating. Moreover, refer to a speech of the Labor Department, the tally of tidy sum seeking unemployment benefits rose by 26,000 to a seasonally adjusted 397,000 recently (7). This implies that the unemployment rate in China is rising. Thus Champway female genitals also benefit from this circumstance as it can betroth sufficient work people for their operation in China.\r\nThirdly, the Champway may benefit from the social environment of China. As people in mainland China become more ameliorate and more environmental conscious (8). They be more samely to support point of intersections with environmental friendly features like biodiesel. As a result, the Champway may catch this hazard to market biodiesel and benefit from the change magnitude demand for biodiesel.\r\nFourthly, the Champway may benefit from the ecological environment. China is rich in raw materials. However, most of them are not explicated still (9). With a nifty d epletion of raw material, it is insufficient to support the energy consumption of about 1.3 billion population. As a result, biodiesel is acting as a absolute substitute of raw materials like petroleum. So Champway may take the chance to market biodiesel and benefit from the coarse demand it.\r\nDifficulty\r\nAs mentioned, there must be some difficulties when entering such distinctive market. So here is the discussion of those difficulties.\r\nThere are four difficulties to be faced when the Champway is entering the China market. Firstly, the Champway has to face an unfavorable political and legal factor. As the central government is deciding to even the income diffusion in China, a new labor safeguard policy of minimal hire will be established (10). This policy will increase the engage level of workers. As a result, it is unfavorable to Champway, since Champway has to hire a great number of workers for building and operating the facilities of energy generation in China, and the increased wage level of workers may leads to an increase in the operation cost. So it is more difficult for Champway to survive in this sector.\r\nSecondly, the Champway has to face an unfavorable economic factor. As the increasing popularity of biomass energy in China, agricultural product will become more valuable, since agricultural product is one of the inputs of biomass energy generation. Also, the market price of agricultural product has increased due to the inflation. As a result, the operation cost for Champway to run the business in China increases and it may be difficult for Champway to survive with this industry in China.\r\nThirdly, the Champway has to face an unfavorable social factor. Although the central government has emphasized to develop biomass energy, there is still no clear and definite guideline for supplementing of input and quality standard (11). Also, there is an wrong business culture exists in the China guild due to the lack of well education. As a result, there is a disorder in the biodiesel market. People are pretending the original biodiesel with a juke ho function one (11). This phenomenon may create an unhealthy photo for the industry and the industry will be negatively affected.\r\nFourthly, the Champway has to face an unfavorable ecological factor. China is one of the most suffered countries in terms of natural disaster. jibe to the statistical figure from the United Nations, in the form 2008, China has the world greatest hurt of one hundred ten billion due to natural disasters, which is 60 % of the loss of the whole world (12). So there is a frequent lost of agriculture exists. As a result, there will be an inconstant write out of input for the biomass energy generation, and the telephoner may ineffectual to survive in China market with this industry.\r\n speck\r\nAfter the discussion of the unfavorable factors for Champway to enter the China market, some suggestions will be given to shoot down the difficult ies as follows.\r\nHere are three suggestions that Champway can apply to scourge those difficulties. Firstly, in order to overcome the unfavorable minimum wage and increasing market price of agricultural product, Champway is recommended to enter the China market through equity join venture with a greatly financed or a state-owned biomass energy company like the Everbright International (13). So that it can outflank and share the costs and risks with its partner. As a result, the b different of high operation cost can be overcome.\r\nSecondly, in order to overcome the unfavorable work, Champway is recommended to lease with the problem with a well designed distribution and place of the biodiesel. The company can develop and sell its original biodiesel through biodiesel filling station or biodiesel specialty store. So that people can easy recognize the genuine one and avoid purchase the fake. This action can improve the company exposure by building confidence for customer to direct our product.\r\nThirdly, in order to overcome the unfavorable unstable supply of biomass. Champway is recommended to deal with the problem with the use of tenfold suppliers from different region in China. Since China is a huge land, natural disasters often occur hardly in a particular area. So by using multiple suppliers from different region, the company can immediately seek for supplies from other suppliers in other region, when some of them are unable to supply the company due to natural disaster.\r\nConclusion\r\nTo concluded that, Champway can benefit from four macro-environments when entering the China market. They are political-legal environment, which is the support and back up by the central government; economic environment, which is the appreciation of Renminbi and the large supply of labor; social environment, which is the increasing environmental intellect; and ecological environment, which is the great depletion of raw material and the great demand for substi tutes.\r\nHowever, Champway has to face four difficulties too. They are the minimum wage, the increasing market price of agricultural product, the counterfeit biodiesel and the unstable supply of biomass due to natural disasters. In order to overcome the four difficulties, three suggestions are given as the solution. They are the use of joint venture, the development of biodiesel filling station and biodiesel specialty store, and the use of multiple suppliers from different region.\r\n'