China - World Power Of The 21st Century?

Projektarbeit von Christian Lutz, Benjamin Pflüger, Thorsten Iwanowski, Oliver Riek

Introduction:

The approach of this research paper is to give an overview about the Chinese automotive industry. An analysis of the People’s Republic of China (PRC) shows the investment possibilities for foreign automotive manufactures. This research introduces the major opportunities and threats of political, social, economical, environmental, technological and legal dimensions within China.

In the first part the „Political System” will be analysed by Christian Lutz. The historical and cultural roots are important to understand the political developments. The theoretical and actual politcal system and their problems will be shown. He also reflects the „Social System” with its different specifications. The current fall-back system with community health, retirement pension and unemployment will be analysed. Furthermore the potential opportunities and risks for automotive investors will be addressed.

In the third part „Economy” Benjamin Pflüger point out that China is potentially the largest and one of the fatest-growing automotive markets in the world and therefore significant for all foreign automobile manufactures. There are both great opportunities and possible threats existing in China. The huge population, economic growth, increasing income and improved environment for consumers as well as China`s membership of the World Trade Organisation (WTO) are important for the future development of the global economy. This also leads to unavoidable consequences for the environment. The current situation and the environmental impact of China`s motorization, such as infrastructure shortage and air pollution, will be presented in sup-topic „Environment”.

In the fifth chapter „Technology” Thorsten Iwanowski will introduce aspects of technology and technology management in China. As nowadays the main form of investment is the joint venture, this will be focused. The accelerating technological development within the last decades does not only generate advantages for the Chinese people. After having created several constitutions within the last 50 years, a modern and future oriented one has been passed. This constitution basing the new legal system will require fast and further legal rules and laws to meet the challenges of the Chinese future. These circumstances and their influence on the automobile industry will be pointed out in the part „Legal System”.

The last years show an increasing volume of Foreign Invested Enterprises (FIE) within PRC. Thus German companies have only low share in FIEs. A description of different forms of „Dircet Investments” will be presented by Oliver Riek in chapter 7.

The authors intend to provide essential information for potential investors, so that this work serves as a good support for an investment decision in China.

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