HND大综合 GU2 第2部分Developing部分范文

Chapter 1 Introduction

1.1 A Brief of what I am writing

Since the Chinese opening policy actualized in China in 1978, China keeps a high speed of growth rate. Brining in and utilizing foreign investment would be one of the most important strategies of basic national policies. Putting in practice of this strategy, China had resolved the fund lacking and low level of technology and management problems in economy construction. Under the leadership of Chinese leader Deng Xiaoping, China was testified of the most amazing economic transformations over 20 years, and it is likely to grow in importance both politically and economically.

On the other hand, the Chinese entering of WTO in 2001 also play a vital role in attracting foreign investment. Since the early 1990s, the amount of foreign investment that entering into China had increased sharply. In the continuous 6 years from 1996 to 2001, China utilized foreign investment actually exceed $ 40 billion per year and the aggregate had exceeded $ 400 billion. In 2001, this number reached $ 46.8 billion and achieved better levels in following years.

This chapter analyzes the particular process and results of my investigation including the data analysis and economic phenomena and their effects which the businesses I choose for the investigation. Methodology is a tool to collect and analyze both the primary data and secondary data. And the detailed methods I use are the questionnaire and survey and also telephone-interview to obtain direct information. In order to present the better understanding to readers on what I found, the following subheading would exhibit the information clearly:

? The general policy background on the multinationals’ economic and invest

environment in China.

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? The reasons that overseas investment come into Chinese market. ? What kind of impacts the multinationals transferred to China. ? The great transformation on China

The probable results of my investigation exhibit the impacts (good effects mostly) in Chinese multi-aspects, which consist of national economy, personal livelihood and firms’ development, etc. Under the prefect Chinese economic development, the more than 20 years correct policies and appropriate investment environment played a significant role. Through the principal researches of Coca-Cola system in China, the readers could easy figure out the changes in China by a representative firm.

1.2 Literature Review

The Ninth Chinese International Investment and Trade Conference, which had invited the deputy director of Commerce Secretary Yuanyuan Gao (2005, accessed at http://news.eeff.com.cn/zc/2006/11/061123052546913.html), who argues that China adapt to the new situation of world economic development, exploit foreign investment logically, effectively and positively. Now, China had a greater power in attracting foreign investment year by year, and the current policies used in fetching foreign investment include three most important aspects, which are improving the legal environment for FDI, maintaining the consummate market environment and guiding more foreign companies into China. From this conference of Chinese government, I can realize the Chinese economic situation is suit for foreign investment very much and it actually has gained many investments in past several decades. The current policies applied in foreign investment bring more benefits to China, such as the upswing of employment rate, living standard and Chinese GDP.

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There are many elements could influence the flow direction of FDI. According to the “Investment Analysis” which provided by “Market Modernization” (Zhao and Mou, 2007), the market environments play a very important role in whether the foreign companies invest in China. First, China had experiences of fast and stable economic growth over past 20 years and China has a great increase in purchase power in this period. China now became a huge and perfectly ergastic consumer market in the world. And China plays a very vital part in multinational’s global strategy. In addition, they also submit the second point; the investment environment is a mixture of multiple elements. The natural and long term elements called hardware environment, but the man-made elements called software environment. The man-made environments mainly indicate the policy environment, legislation environment and market environment. This element mostly includes entering of FDI, actualizing of national treatment, examine and approve for FDI from government, foreign exchange policies, financing environment, taxation policies, finance policies and imports and exports policies, etc. Good investment environment in China have acted an example to the world, currently China is the country that attracting the most FDI in recent years. My study will figure out the detailed information that supports the hardware and software economic environment in Chinese investment market, and how they benefit to China and foreign investors.

1.3 Investigation Structure

My investigation is organized as follows. Chapter 1 shows the readers a detailed brief which includes investigation title, contents and methodology, etc. Chapter 2 explains the total timescale in my investigation. Chapter 3 discusses the introduction, literature review and methodology what I used in my study. Chapter 4 presents a detailed analysis which content of case about Coca-Cola. At last, Chapter 5 considers the

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evaluation of this whole investigation.

1.4 Methodology

This part outlines the analysis of the adopted methodology for my current investigation. “Methodology refers to the overall approach to the research process, from the theoretical underpinning to the collection and analysis of the data”. (Collis and Hussey, 2005:55) Collecting both the primary data and secondary data I use different tools to lay out the researches to readers. The secondary data may have a lot of sources such as journals, magazines, newspaper, business reviews, reference books and the Internet. Most of my literature search was from the college library based in Centre South University of Forest and Technology, some little others from the library of Changsha City and some book stores. Magazine and journal also give me some information to support my investigation. Mostly, I consult plenty of information from the internet, then choose the favorable data and used in my study.

The collection of primary data may use by different tools; they consist of interview and questionnaire. Quantitative research and qualitative research have been presented to the ascendant strategy for managing business research. (Bryman and Bell, 2003) The use of interview is a typical data collection tool to qualitative research approach, was help me to receive my direct materials from my adopted investigate firms. However, this method has its own drawbacks include the expensive expenses and time-consuming. Especially if there are a large amount of data is needed to receive from the managers. By myself, I choose the telephone-interview to offset the drawbacks of direct interview to firm’s manager. Through telephone-interview to a manager of Coca-Cola marketing department, I have got the related multi-aspects of

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Coca-Cola’s investment impacts in China. This telephone-interview from Coca-Cola talk about how the Chinese investment policies influence Coca-Cola’s investment in China, how the Chinese current investment environment helps Coca-Cola’s developing in China and mostly what kind of detailed impacts the Coca-Cola bottling system created to China. And the most parts of the interrelated detailed data about these topics I talk about with Coca-Cola’s manager above are come from the company’s interior, besides, the minor part of the data are from some secondary data source such as the newspaper “China information” and some speech by Chen Weiqi, the president of Coca-Cola Chinese limited company.

Due to the new policies provided by leader Deng Xiaopin, the Coca-Cola system re-entering into Chinese market in 1979 and this system consist of the Coca-Cola Company and its allied bottlers. The Coca-Cola system had invested $1.1 billion in the local economy and built 28 new bottling plants. Because of the differences between Chinese investment and others’, the Coca-Cola took a fancy to Chinese potential investment environment and invests substantial fund. These funds include 37 relative issues investments, which the total amount was 8.16 billion RMB. Since the Chinese entering of WTO, the global business systems like Coca-Cola may help stimulate economic growth, employment and tax revenue, even more the technology transfer. The number of people directly and indirectly employed by Coca-Cola system is estimated to have been 414,000. To the Chinese government tax revenue, Coca-Cola contributed almost 387 million RMB in 1998.

“Questionnaire surveys allow the collection of a large amount of data from a sizeable population in a highly economical way”. (Saunders et. al., 2003:92) Researchers use questionnaire to gain the information that they need, it is a tool that could under the control in the process. Considering the transnational enterprises entered into China,

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the normal people have the largest right to speak the changes of people’s living standards. My prepared questionnaire was used in a group of people that in the busiest street, which named HuangXin South Road working street. And my examine content mainly aim at the populace living standards in resent years. In details, they were asked in this questionnaire including populace’s incomes and expenses, purchasing powers and deposits. Through this analysis results and the information of GDP and employment rate in China, I could figure out the Chinese transformation.

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Chapter 2 Analysis

2.1 The general policy background on the multinationals’ economic

and investment environment in China.

Chinese government has made great achievements in attracting foreign investments and developing an export-oriented economy. By the end of 1996, 230, 000 FIEs had been established with a total of US$177.1 billion foreign direct investment. Nowadays, almost one third of the economic growth in China and nearly one forth of the revenue all come from the foreign investment. The actual use of foreign investment in the fixed assets investment of total community has achieved 10%. The industrial output value of foreign- funded enterprises accounted for the proportion of the country's industrial output value is almost one-third. The export of foreign investment enterprises accounted for the national export more than 57%. Whatsmore, China's international trade continued to increase dramatically, and two thirds of which from foreign direct investment (FDI). In addition, both the market competition effects that brought from entering of foreign-funded companies and the related effects that produced by the foreign investment enterprises’ localization strategy, they all play an active role in Chinese economic development. (Ge Shunqi, 2004)

The government have promulgated various favorable policies for foreign investment and assigned several special regions, such as Shenzhen, Zhuhai, Shantou and Xiamen etc. And the favorable policies mainly cover the Hi-tech industry, agriculture, forestry, telecommunication, energy, export-oriented sectors.

(http://www.china-window.com/china_market/investment_in_china/china-investment-environm.shtml)

The general policies on multinational’s investments in China had been presented by government and there are some changes in each year, but the general trend in these policies are not change in recent years. Some primary policies decide some directly

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investments in China, and those policies including legislation environment policy, market environment policy and taxation policy. According to the promises of entering into the WTO and the needs of Open-door to the outside world, China will perfect the legislation system of attracting foreign investment more, remain the stability, continuity, foreseeability and operability in foreign investment policy legislation. And even more simplifying the process of examines and approve in foreign investment, actualizing the normative and standard examine and approve system. China will establish a unitive, open and fair competition market environment. In some regions in China, governments actualize the privilege policies in business income taxes of foreign investment company.

Due to the good policies that benefited to foreign investment, over the past 20 years, China has rocketed the largest economic transformation all over the world. From 1978 through 1998, China realized an astonishing 9.7 percent average annual growth in gross domestic product. Per capita income increased fourfold. (Lin, 1999) The international investment in China plays a significant role in contributing a global economic competence. China now is a cardinal country that receives foreign investment all over the world, and the FDI brings long-term benefits to host countries. Over the past 10 years, China has attracted much of the world’s international direct investment flows. China emerged the direct investment as the second-largest recipient in 1996, but in 1990, China had not been in the top ten. China makes use of foreign investment actually of the twentieth century could be seen in Appendix 1. This table indicated the changes of amount among the actual utilization of foreign investment, foreign loan and FDI. Form 1979 to 2000, the FDI in China had an obvious increase which from 2685960 thousand dollar to 40772370 thousand dollar, the foreign loan from foreign countries had a great decrease until 1993 but also had a little graveled from 1994 to 1998. Generally speaking, the actual utilization of foreign investment in China in these years had a clear rising.

These 20 years, the foreign direct investment in China remains a high speed

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increasing level. By the end of 2000, China was the recipient of more than 20 per cent of the total FDI in developing countries and more than 9.8 per cent of the total FDI in the world. China is fast becoming the favorite market for Western firms. (http://www.paper.edu.cn/downloadpaper.php?serial_number=200512-814&type=1)

After the good investment policies presented in China, the Coca-Cola system entered into China again. In many areas of China, Coca-Cola appeared in everywhere, such as retail pushcarts seen along busy commercial streets and on the small shops that on the outlying villages. The legislation policy environment brought the guarantee to global business company like Coca-Cola. The legislation system that attracting foreign investment makes sure the FDI running steadily and continuously. Coca-Cola system could simplify examine and approve process if it need invest more bottling system in China. Chinese government devote itself to preserve and perfect a fair and open market environment, it makes effort in cresting a unified and fair competitive environment. Coca-Cola has a fair business environment to avoid wrongness competition. Some local governments give taxation privilege to foreign investment firms and create an appropriate environment to companies. Some bottling plants of Coca-Cola system also enjoy the benefit from these special regions.

2.2 The reasons that overseas investment come into Chinese market.

Since the “opening policy” actualized 24 years in China, the speed in attracting foreign investment was supernormal to the world. Until the end of 2002, China totally approved the number of foreign investment firms was 424,196, the amount of money in contract foreign investment was $ 828,060 million, and made use of foreign investment $ 447,966 million effectively. Since the 1993, China became the most attracting foreign investment in developing countries continuously, and also in the front of absorbs foreign investment internationally. Just as the Nicolas says, who is chief economist in World Bank, “if we make a single province as a single region, the

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20 fastest developing regions in the world all belongs to China since 1978”. (http://www.studa.net/jingji/060817/10452276-2.html) Due to the befitting investment, manufactory and management environments that created for investors which from all over the world. China has obtained a grate achievement in attracting foreign investment.

2.2.1 The optimized Chinese macroscopic economic environment.

Since Chinese opening policy actualized 20 years, the national economy remains a high speed increasing. The economic growth rate kept around 7.5% from 1998 to 2002, which was the highest internationally. In addition, the macroscopic economic environment in China is stable relatively. In order to improve the economic development in recent years, government takes an active finance policy, which including stabilizing exchange rate and decreasing interest rate. From the producing element, China has some strong global competitive powers in producing cost, which may include labor force, raw materials and services. The wages cost is lower than not only developed countries but also some developing counties. And the total amount of export and import foreign trade was $ 620,800 million in 2002, which occupy over 40% in gross domestic product. The foreign business investment inventory achieved at over $ 430 billions, which occupy almost one third of annual gross domestic product. China was attracting foreign investment nearly $ 50 billion every year, which occupy about 4% in gross domestic product. And all these above information says that Chinese great macroeconomic environment, and also offer the actual condition for foreign business investment.

(http://www.gsei.com.cn/bbs/showtopic.asp?TOPIC_ID=843&Forum_ID=3)

With the huge increase and development in national economy, each foreign firm will invest in China include Coca-Cola. With the stable exchange rate and the good developing trend in China, Coca-Cola will have more expansion plans in the near future without too many risks in Chinese investment environment.

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2.2.2 The obvious improvement in hardware environment for foreign

investment.

China has affluent resources, roomy regions and comfortable environment. Affluent resources offer raw materials supply to international corporations, and suit for many kinds of industries investing in China. Not only the agriculture resources but also the several mineral resources are in the front of the whole world. These resources could offer supports to manufactory even services foreign investors. In the recent years, Chinese infrastructure has a great improvement, such as traffic, communication and water, electricity and gas supply have been built nearly perfectly. These infrastructure works for foreign business investment’s external producing and managing conditions. Without the good infrastructure in some countries or regions, firms need pay more efforts and costs on obtaining the raw material and information to markets their new products. With this position, it would increase the companies’ managing and operating cost, or lost some potential companies even more terrible.

Coca-Cola bottling system has a rigorous network from upstream to downstream, many needed supply from upstream’s suppliers transport into Coca-Cola production department. The affluent resources in China bring up the multifarious suppliers include agriculture, industry and mining industry, etc. Many multinationals obtain resources and materials directly and avoid import issues, which saving lots of costs. Many upstream relative industries such as coal, water, sugar, paper, gas, carbon dioxide and glass all offered perfect support to Coca-Cola system. On the another hand, the infrastructure in China has a great improve in recent years, the downstream industries also benefit to Coca-Cola system. It presented in the communication and transportation aspects. Retails and wholesalers have more conveniences in taking delivery of goods and selling goods to customers.

2.2.3 The obvious improvement in software environment for foreign

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investment.

At first, China has a stable political situation and people live and work in peace and contentment, which are particular community condition. Secondly, the markets economic system has been built preliminarily. Legislation was going perfect gradually in order to create good legislation environment for foreign investment. Then, with the advancement of education level and expansion of open up degree, people have a higher level quality. They have a great transformation in their conception, language, culture and customs, and they could accept some issues from different area. These points offered an appropriate social environment to foreign investment. The most important the labor force, which has enough amount and high level quality. The Chinese affluent sixpenny labor force offered huge opportunity to investment of labor intensive model. Actually, more than one half of foreign investments focus on the labor intensive model industries. On the other hand, China has a great deal of skilled work forces that has been well trained and educated. They could satisfy the demand of high and new technology industries foreign investment.

(http://www.zhaoshang-sh.com/2005/11-18/15-49-5313867.html)

The steady political situation, gradually completed legislation and laborious labors created a stable society environment for foreign investors. Many foreign investors come from different regions with different culture, custom and language, but Chinese people tried to reduce the distances with the enhancement of education level and the expansion degree of “open door” policy. Coca-Cola set so many bottling systems in China just because of the Chinese huge potential economic power, such as political and economic system, stable society and plenty of labor force with skilled and unskilled. Coca-Cola realized the cost advantages by employ so many employees, thus created more profits.

2.3 What kind of impacts the multinationals transferred to China

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Multinationals invest good round in international markets in order to create profits, through producing and selling the parent company’s products in overseas markets. Some firms establish their factories in overseas markets just in order to avoid the severe tariffs bulwark and these factories are independent to each other. Like Coca-Cola Company, which has bottling factories in not only United States but also many other countries. Without doing this, multinationals’ products may loss competition advantages in markets. And once they build factories in other countries, many effects may be brought to local markets. These impacts consist of employment, economy, environment taxation and technology aspects. I will investigate these details impacts in China through analyzing the Coca-Cola Company system in China. My analysis focused on the economic multiplier effect caused by Coca-Cola’s capital investment and ongoing operations.

2.3.1 The structure of Coca-Cola system in China

Each day, more than one billion servings of Coca-Cola products are consumed across the world. As the world’s most pervasive brand reaching about 200 countries, Coca-Cola products are sold in highly different markets. Its success in every market is not the result of a huge global strategy or single system. Although the concentrate of Coca-Cola is the most invariant regulation all over the world, the Coca-Cola system itself is highly adaptable. The complex of suppliers, bottling plants, and distribution outlets responsible for making and delivering the product to consumers suit for the local conditions and requirements in each market Coca-Cola services. Today, to produce locally and extend its global competencies, the Coca-Cola Company works with a select group of bottlers, mostly joint ventures with Chinese state-owned enterprises. Making the final products, the company permits the local bottlers to produce under the Coca-Cola brand, and they bottling companies form franchise

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arrangements with the Coca-Cola Company. A local Coca-Cola bottler must have sufficient capital to invest in the necessary land, building, structures, machinery, equipment, trucks, bottles and crates. All these constructions may drive many other economic issues, like employ more employees and advance the flow of fund.

Bottling Alliances: Coca-Cola set up joint-venture bottling plants in which it had local partners. These were generally drawn from 3 different Chinese government agencies: the China National Council of Light Industry (NCOLI), China National Cereals, Oils, and Foodstuffs Import and Export Corporation (COFCO) and China International Trust and Investment Corporation (CITIC).

2.3.2 Upstream and Downstream Networks of Coca-Cola system

Bottling alliance is business networks that expand upstream and downstream. Manufacturing and distributing soft drinks, the bottlers and the Coca-Cola country office perform a process of localization with suppliers and sellers. The clearly Figure 1 shows the Coca-Cola system and the ambient work issues that around the network. This network system can be seen as many different elements in the china from upstream to downstream.

In the upstream network just like the appendix 4 shows to us, the bottling system connects some local production joint ventures as the Chinese suppliers. They directly offer inputs and services to this system. Actually the production process of soft drinks is simple, with highly automated production lines, however, in order to produce the final soft drinks, the lines combine concentrate, syrups, water, sugar, CO2, bottling and packaging material, which needs a great many of local labor forces both skilled and unskilled.

The distribution side of the system, from the bottlers to final consumers, Coca-Cola has built an extensive downstream network. Delivering goods from all bottlers to

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consumers are the main responsibility for downstream. The bottling system could distribute goods to retailers directly, but most of time retailers get products from wholesales channels. Retailers appear in different forms, from large supermarket chains to small points-of-sale like kiosks and street vending. In most Chinese cities, people could find Coca-Cola products everywhere, because of the vast location of small retailers. Coca-Cola’s soft drinks almost are sold in every store.

2.3.3 Direct and indirect effects of Coca-Cola system

When the Coca-Cola bottlers purchase materials or hire employees in China. These used money have created new income to others people or firms, and these new incomes would be used to purchase other products, thus influences the local economy much more. The impacts that Coca-Cola bottling system made to the whole economy could not contingent on the incomes of Coca-Cola, but the income combination between Coca-Cola and the firms which effected by Coca-Cola. For example, the firms that relating to supplying and distributing process in Coca-Cola bottling system.

The total investment of initializing fund in 1998 in Chinese economy was 8.16 billion RMB, which was dispersed in 37 items belong to correlative investments, purchasing, capital expenditure and manage expenditure. The initializing fund involves wages expenditure (855 million RMB) and taxation expenditure (387 million RMB). These were the direct impacts in Chinese economy by Coca-Cola bottling system, and the indirect impacts also huge to Chinese economy. The 8.16 billion RMB total initial injections bring about total 21.7 billion RMB new increase production value.

There are nearly 400 thousand employment opportunities were created by the upstream and downstream network economic activities of Coca-Cola bottling system in China. The bottling system created about 14,000 work position itself, at the same time; the upstream suppliers provide 340,000 job positions due to Coca-Cola’s ordering. These suppliers include concentrate, plastic materials, cans, sugar,

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commercial service and construction are the main sectors that directly benefit from Coca-Cola operations. In order to sell Coca-Cola’s products, the sells department in the downstream network offered other 50,000 work positions opportunities. The total number of providing job opportunities by Coca-Cola bottling system is nearly 400,000, which is the 32 times of its direct employees. On the other way, these information means every 100 thousand RMB be injected in Chinese market, it may create almost 6 job position opportunities.

From 1992 to 1996, over 95% foreign taxation that came from foreign investment firms accumulated to 211998 million RMB, (without customs and land tax) the annual rate of growth achieved to 58%, and the foreign taxation occupied the national industrial and commercial taxation from 4.25% in 1992 to 11.88% in 1996. About 99.3 billion RMB of foreign taxation in 1997 had increased by 29.97% at the same period in 1996, which occupied the 13.16% of national industrial and commercial taxation. In 1998, the foreign taxation had raised to 123 billion RMB, which had a increasing of 25.94% at the same period of last year. It occupied 14.38% of national industrial and commercial taxation. The similar phenomenon happened in 1999, there was a growth in foreign taxation. The net growth of taxation had enhanced to 41633 million RMB, which occupied 23.66% of national net growth quantum. The Coca-Cola bottling system had improved the economic expansion, also increased the government income simultaneously. The Coca-Cola system would generate about 1.6 billion RMB in tax revenue annually for Chinese government. Observe also that the final tax revenue share of national income (1.2 billion RMB) is more than 3 times that of initial tax payment of the bottling system.

2.3.4 Other impacts in China by multinationals

Technology transfer

Multinationals may actuate technology (knowledge and technical ability) transfer to

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other nations, which called technology transfer. Technology just like a kind of infection, the more people contact it, the farther and faster it could transmit. People in China could understand the products from others countries through global business. The FDI have offered a more effective channel to transfer technology. When the multinationals which have technology advantages establish subsidiaries in China, the personnel relationships between subsidiaries and local firms would be more frequent than parent companies, and also more close. When a foreign firm has manufactured an outstanding product that is very popular in customers groups, other enterprises are under threat. In order to survive, the local firms have to innovate their products and improve the quality.

Coca-Cola Company’s soft drink products need good glass bottles which could sustain 32 atmospheric pressure, but the bottles produced from China could only sustain 16 atmospheric pressure in 1980s. Then Coca-Cola requests the exports from abroad offered the request glass bottle technology to Chinese glass bottle manufacturers.

Some other cases show the technology transfer is the airplane manufacturing business in China. Due to the Chinese appropriate and vast economic market, the famous airplane manufacturers from developed countries have settled on the Chinese market to be the sales source. But Chinese government insists if the foreign firms want sells their planes to China, they must separate several plane components contracts to Chinese manufacturers. This technology transfer would help China study the airplane manufacture skills, and producing Chinese own planes itself ultimately. At last, the three largest airplane manufacturers Boeing, Airbus and McDonnellDouglas established their own factories in China and produce the cabin door, empennage and a great deal of other components. (Robert J. Carbaugh, 2002: 290)

2.4 The transformations in China after attracting foreign investment.

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2.4.1 Transformation of GDP in China

The increased GDP year by year was the best evidences that prove the Chinese economic excellent development. The national statistics office issued the changes of GDP in nearly past years. Since 2003, Chinese economic growth rate kept a relative stable level which is almost 10%. The rate in 2003 was 10.0%, 10.1% in 2004 and 10.4% in 2006. The GDP in 2006 was 20940700 million RMB, which reached the 10.7% growth rate. From this good impetus, lots of industries had been influenced since those years the FDI entered into Chinese markets; the first industry had an increase value of 2095600 million RMB in 2004, which occupied 13.1% of GDP. The growth rate in second industry was 7390400 million RMB, which increased 151700 million RMB to last year and occupied 46.2%. At last, the rising value in third industry was 6501800 million RMB, and occupied nearly 40.7%. (see Appendix 5 )

4.5.2 The transformation of employment in China

On the basis of research of global trade and economy research laboratory, there are over 20 million direct employees in almost 150 thousand of foreign investment firms in China, which occupied 11% of national non-agricultural employment population. It is becoming one of the most significant channels to solve the employment problem. If we consider the employment opportunities that foreign investment in processing and trade business, the direct and indirect employment opportunities created by foreign investment may reach 30 million.

Employment in China was the largest and most distinct part that impacted by multinationals in Chinese economic market. First, multinationals came into China, they must have powerful economic strength to exploit Chinese market, so a large number of operating post would be provide to Chinese society by the company itself. However, the physical truth of employment is not this situation. A company’s

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business running actually may drive a lot of other industries’ operating. Sometimes it also could motivate many competitors expand operating and employ more people. For example, Coca-Cola spend $100 to purchase sugar as the raw material expenses, then the sugar manufacturer could use the $100 to purchase automobile as the

transportation, furthermore, the automobile manufacturer purchase other supply with this $100. And every stage this $100 passed by, it will create some employment position in each relative industries. Go round and round, we could not say one company only has contribution to employment to itself, the employment contribution content of the company and the every links of society producing that the company has effected.

4.5.3 The transformation of living standards in China

According to the respondents of questionnaire survey, the general trend of people’s living standards is good, and most of people’s reflections in income, expanses, savings and ability to pay indicate the good tendency in living standards. As indicated in Figure 1, of a total of 100 respondents, there were 71 people had felt the Chinese economy is getting better, and only a small group people felt worse of it, equaling to the percentage of 71%, 16% and 13% respectively. The people who satisfy the current Chinese economic situation are over 2 times than the summation of other two groups.

Figure 1: The level of current economic situation in China of the respondents

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71 16 13 Satisfactory Indifferent Non-satisfactory

Source: Survey Data (Q1 in Appendix 2) n=100

With this flourishing trend of Chinese economic development, Chinese people now have more income and expenses than before, and the situation is getting better day after day. Figure 2 and 3 show the people’s cases whether they have a increase in income and expenses.

Figure 2: People’s income situation

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Appendix 3

Actual situation of using foreign investment in China

Year Actual Utilization of foreign investment $0000 1979–1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Source: “The foreign economy and trade year-book in China”

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Foreign loan $0000 1193816 128567 446211 501457 580495 648673 628570 653452 688756 791071 1118885 926700 1032700 1266900 1202100 1100000 － － Foreign direct investment $0000 268596 141885 195615 187489 231353 319368 339257 348711 436634 1100751 2751495 3376650 3752053 4172552 4525704 4546275 4039843 4077237 1462408 270452 250596 725830 845156 1022639 1005915 1028939 1155417 1920233 3895972 4321284 4813269 5480416 6440834 5855749 Appendix 4

Coca-Cola product and distribute network system

Beverage Ingredient Suppliers Packaging Suppliers Wholesaler Production System Upstream Network Downstream Network

Source: telephone-interview from Coca-Cola Company.

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Further Upstream Linkages Final Consumers Transport & Other Equipment Suppliers Advertising & Other Business Services Construction Coca- Cola Bottlers Retailers Restaurants, street vendors and other points of sale Appendix 5

Comparison between GDP and industries from 1978 to 1992

(Unit: a hundred million RMB)

Year The total GDP 1978 3624.1 1992 26638.1 1995 58478.1 1996 67884.6 1997 74462.6 1998 78345.2 1999 82067.5 2000 89468.1 2001 97314.8 2002 104790.6 2003 116898.4 2004 136515 First industry Second industry Third industry 1018.4 5800 11993 13844.2 14211.2 14552.4 14457.2 14212 15411.8 16117.3 17247 20744 1745.2 11699.5 28537.9 33612.9 37222.7 38619.3 40417.9 45487.8 48750 53540.7 61778 72387 860.5 9138.6 17947.2 20427.5 23028.7 25173.5 27035.8 29703.8 33153 35132.6 37669 43384

Source: “Chinese statistics yearbook 2004” by national statistics office.

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