Serge Makhoul

PESTEL CHINA Political Microenvironment: China is one of the world's most dominant nations. It is a permanent member of the United Nations Security Council. It is also the world's fourth-largest nation in terms of land area. China's capital city is Beijing. The Communist Party of China is the People's Republic of China's founding and ruling political party. About the fact that China's political climate is peaceful, the lack of political independence is a source of concern. Many observers doubt China's political system's lack of transparency. It is worth remembering, however, that China positions itself as a perfect destination for foreign direct investment due to its predictable political climate, low labor costs, and developed infrastructure (FDI). China, unsurprisingly, drew a record high of US$139 billion in FDI in 2016, making it the world's third largest FDI destination. In 2018, it attracted $135 billion in FDI. As previously noted, China is a permanent member of the United Nations Security Council. It is also a member of the World Trade Organization, the Asia-Pacific Economic Cooperation (APEC), the BRICKS, the BCIM, ASEAN Plus, and the G20. It retains cordial diplomatic ties with several major trading and political forces around the world. However, it has had a difficult relationship with the United States for a long time. Similarly, recent demonstrations in Hong Kong have raised concerns. Economic Microenvironment: China's economy has grown at a significant pace over the last five years. According to reports, if China continues to grow at this pace, its GDP would soon exceed that of the United States. Some factors that could be beneficial like sigh rate of savings, abundant and skilled labor, and potential urban growth. Any urban growth has the potential to have a significant effect on SMEs and their behavior. According to China's GDP pace, each person is contributing more and more value to society. As a result, consumers' buying power is growing. China's labor costs are relatively low. Therefore, major corporations such as Apple choose to recruit people from the region. While the pace of growth is impressive, it has the potential to decline. Some of China's alarming trends are high inflation rate and high property prices. Interest rates have been increased by the People's Bank of China. Commercial banks' liquidity requirements have since been increased by nine times. Furthermore, the central bank is advising banks to lend less and place restrictions on home transactions. Socio-cultural macro-environment: Population: 1,444,216,107 (worldometers.info 02/22/2021), equivalent to 18.47% of the total world population. Age: the graph representing the division into 3 age groups in China is presented below (Statista, 2020). The average age is 38.4 years. In terms of population size, the sex ratio of the total population 1.080 (1,080 males per 1,000 females) which is higher than global sex ratio. The population percentages based on defined levels of basic household income are presented below. The average value in China is around 27,540 yuan. The map divided by regions with respect to household income is also presented below: Employment: the number of workers in the China has been in decline over the past five years, however it has been stable over the past year (Statista, 2021). Technological Macroenvironment: With 829 million internet users, China has the world's highest online community (CNNIC, 2019). China has several large tech companies, including Baidu, Alibaba, and Tencent, to name a few. These and other companies are so powerful in China that many large companies from other countries have collapsed. China has a goal of becoming a world leader in science and technology. To do this, the nation initiated a program called "mass entrepreneurship and creativity" in 2015. The aim of this program is to promote entrepreneurship in China. It also aims to assist the nation in transitioning from a labor-intensive to an innovation-driven economy. The internet is the most important technical driver assisting the Chinese industry. China has almost 450 million internet users, which influences their shopping habits. However, there are few reliable online payment methods in China, and credit card penetration is extremely low. Another important trend that has aided the buying power of the Chinese people is e-commerce. Taobao is China's largest e-commerce portal, with a large percentage of the population using it to purchase all of their products. In addition, there is a strong shift in the world toward physical shopping. This is partly due to China's traditional social traditions, which many generations continue to follow, and partly due to the myriad dangers involved with online shopping. Environmental macroenvironment: China's rapid economic growth has had a significant negative effect on the country's natural environment. Water and air pollution, hazardous waste, deforestation, climate change, and biodiversity depletion are only a few of the environmental issues that China is currently dealing with. China is now one of the most polluted countries on the planet. As a result, many companies must spend more money to ensure that their productions meet environmental requirements. As a result, manufacturing costs rise, resulting in lower profit margins. As a result, China's immediate priority should be removing processes that damage the environment and maintaining the viability of its numerous industries. It is worth noting, however, that the Chinese government has taken a range of steps to resolve environmental issues. Decentralization of accountability at state levels and promoting citizen interest in environmental conservation are two examples of interventions. Legislative macro-environment: In China, there are a variety of laws that govern industry and work practices. The PRC Employment Law 1995, the PRC Labour Contract Law 2007, and other administrative laws, for example, regulate labor practices, job remuneration and compensation, labor disputes, and other related matters (Chen, 2019). FDI in the country is regulated by the Catalogue of Industries for Guiding Foreign Investment. The Catalogue categorizes foreign direct investment into four groups: promoted, limited, banned, and allowed. There are 384 businesses in the Encouraged band. This division includes sectors such as agricultural machinery manufacturing and the processing of fruit and vegetable drinks. There are 35 businesses in the Restricted range. This division includes sectors such as power grid construction and service, banks, and financial firms. There are 28 businesses that are prohibited. This division includes sectors such as air traffic control, postal services, and international mail letter delivery. Industries that do not fall under any of the above-mentioned categories are included in the permitted category (Chen, 2019). The formulation of e-commerce legislations and their numerous peripherals, such as intellectual property rights, consumer rights, tax policies, and so on, is a hot legal issue in the Chinese economy. E-commerce is still a relatively young field in China, and its legal growth would primarily benefit the economy's existing development model. Trade-related legalities are another such concern. This is something that is still changing and is commonly geared towards the development of a bourgeois economy. However, if the economy achieves its maximum potential, it is estimated that the import tax will be cut.