Financial for business financing, increase financing to the infrastructure,

Financial

Implemented in early 2016 the Government of China
has reformed its Fiscal and Monetary purposes to focus on 5 Key issues.

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1) Create solutions to the overcapacity issue.                  
2) Cut costs to businesses and business formation.
3) Stabilize the chaotic housing market.
4) Improve the Infrastructure decreasing traffic congestion.
5) Prevent financial risks and reduce total property inventory

The fiscal policy changes include more tax cuts and
an increase to the amount of Foreign investment. The monetary policy changes
will be more accommodating, it will cut the cost for business financing,
increase financing to the infrastructure, and change the exchange rate regime
improving upon policies made to devaluate Chinese currency. The currency used
in China is called the Chinese Yuan (CNY) or Renminbi (RMB) translated to
English it means the Peoples Currency. The current exchange rate between
Canadas Dollar (CAD) and the Chinese Renminbi(RMB) is 1 CAD is equal to 5.10
RMB.

Economic

            The
estimated GDP of china is 9.24 trillion USD and the GDP per capita is 14,388
USD. The GNP of China is 16.08 trillion USD quickly approaching the United
States who is projected at 16.99 trillion USD. China has an Inflation rate of
0.9% down from 2.5% in January with a low unemployment rate of 4.02% which has
been maintained since 2015.  The tax
environment in China is classified between Individual and Corporate. Individual
income is taxed progressively starting at 3% increasing all the way up to 45%
based on the amount of income earned. The taxation for foreign and domestic Corporations is a standard rate of 25%. The Labour force of China consists of
over 641 million people.

            China
features a unique Socialist Market economy which is a blend of its previous
communist roots, socialism, and with US capitalism. China is a World market
supplier trading with all members of the G20. Its major trading partners
include the United States (18% of total sales), Japan (6%), and South Korea
(4.4%). China has many trade agreements including: ASEAN–China Free Trade Area
(2010) Peru, China–Peru Free Trade Agreement (2010) Economic Cooperation
Framework Agreement (2010), and the former Trans-Pacific Partnership.

            The Economic
Policy of China is changing its focus towards promoting structural reforms and
maintaining stability. The Monetary policy will place more efforts on preventing
financial risks and keeping the RMB exchange rate stable while keeping a watchful
eye on non-performing FDIs, defaults on bonds, internet finance and shadow
banking. The Fiscal policy will focus additionally on increased taxes on high-polluting
companies as well as reforms in electricity, oil, and gas.

Infrastructure and Logistics

Chinas
physical infrastructure plays a key role in their economy. In 2016 720 billion
dollars was invested over 3 years, contributing to 303 on going transportation
infrastructure projects.  The country is
attempting to improve its high-speed transportation networks in inner city’s
due to its enormous population. Most of this investment will be spent on
highway and railway expansions. As of 2014 Chinas high-speed railway totaled
16,000 km and is currently growing.

Chinas
highway system is the world’s largest expressway system by length, having
surpassed the overall length of the American Interstate Highway System in 2011.
Expressways in China are a recent addition to the transportation infrastructure
in the country and are up to date in result of recent construction. China’s
government, specifically the Ministry of Health of the State Council oversees
the health services system and over 21,000 general hospitals are currently
operational.                                    

Beijing
is home to second busiest airport in the world, where 90 million passengers fly
out of annually. Furthermore, shipping ports in China are of the busiest in the
world, the 8 busiest Mainland China shipping ports are each located over a long
section of China’s east coast stretching from Shenzhen in the South to Dalian
in the North. Of these, 7 ports are in coastal cities, while the Port of
Guangzhou is further inland at the confluence of 3 major rivers and Shanghai
being the busiest port. In conclusion, most of Chinas infrastructure is
currently up to date and is of no concern when conducting business operations
here.

            Telecommunications in China is a
system that links all parts of the country and world by Internet, telephone,
telegraph, radio, and television. This extensive system of automatic telephone
exchanges is connected by modern networks of fiber-optic cable, coaxial cable,
microwave radio relay, and a domestic satellite system. Cellular telephone
service is widely available and reliable, which is all monitored and regulated
by the Ministry of Industry and Information Technology. Overall, telecommunication
system in China is satisfactory, reliable and up to date when compared to
western countries.

 

 

Political:

 

 

 

 

Currently
in China, the government consists of four branches; the legislative branch, the
executive branch, the judicial branch and the military branch. The Chinese
Communist Party (CCP) is the leading political party in China and unlike
parties in Western democracies, CCP is a tightly organized political force that
controls and leads society at all levels. Their leader is Xi Jinping who is
President of the People’s Republic of China. Independence Day in China is
celebrated on October 1; it marks the foundation of the People’s Republic of
China. The Central People’s Government passed the Resolution on the National
Day of the People’s Republic of China on December 2, 1949 and declared October
1 as the National Day or Independence Day of China.

Tensions
between North Korea and the U.S have become a growing concern for Chinese
officials. Testing of missiles and nuclear development in North Korea have
concerned China because it is a traditional ally with both countries U.S. and
North Korea.  China is unswerving in its
commitment to realising the denuclearisation of the Korean peninsula,
maintaining the peace and stability of the Korean peninsula, and continue to
solve matters through dialogue and negotiations.

Imports and Exports

China
is one of Canada’s largest trading partners with trading in both imports and
exports as the second highest in Canada after the United States. In October
2014, China had $1,706 million dollars in exports in Canada, which from October
2013 to October 2014 increased by 12.6% according to Statistics Canada. China
provides much more in imports than exports when trading and in October 2014, it
was $3,165 million dollars, which from October 2013 to October 2014 increased
by 13.9%. China’s trade balance with Canada increase from -874 to -1,458
October 2013 to October 2014.

In
recent years, both Canada and china have been steadily increasing trade with
each other with China becoming our #2 Trade partner behind the USA. Canada’s
imports in recent years seem to be much more than exports as from 2014 to 2015
seem to be more than double than from imports, and from 2016 to 2017, both
imports and exports were decreasing. However, despite decreases from both imports
and exports, Canada’s trade balance with merchandise trade has
increased.

Canada
mostly trades woods, machinery, appliances, and most recently began trading
more meat to China. China exports up to $27 billion with Canada, with most of
the exports being in electronics and machinery, and then being furniture and
equipment. Since Canada is a member of the G7, China is hoping to gain more
access to these other markets within the group such as Japan, the United
Kingdom, etc.

Canada
trades up to 20% in beans and other produce, with the rest in other products
such as meat and wood, recent talks with China and Canada say that there will
be more trade in these exports. China’s total imports with Canada in 2016 are
18.3 billion, with almost 25% of those import’s electronic appliances such as
computers, broadcasting equipment, and telephones. China and Canada also trade
with each other vehicle and car parts; however, they are less than 3% of
imports and 6% of exports.

Canada’s
totals imports from China for 2016 are a total of $48.6 billion. China’s
exports with Canada in 2015 were almost double at $49.5 billion with more
exports in appliances, computers, and telephones. Canada’s trade in services
with China is in travel, commercial services, and transportation and government
services, with travel being the largest service sector in exports, and
transportation as well as government services being the largest in imports.

 

 

Conclusion

We
believe a trade agreement with Canada and China is good for both since China
has one of the largest economies in the world and having a relationship with
Canada will give Canada easier access within the Asian market and region, as
well as China’s own market since the are so huge. Canada is a member of the G7,
which is a good thing for China because that means that they might have access
to the other countries of the G7 as well such as Japan and Italy.

China
can benefit from the rest of the western region since Canada is a major trading
country within the western hemisphere. And Canada can also benefit from China
since they have major influence within the Asian-pacific region and they can
provide major services in both labor and natural resources, as well as
manufactured goods to both import and export.