CULTURE

YANG WENQI
Summary
There is an Australian company named Australian Laboratory Services Pty Ltd (ALS) doing oil shale and mineral exploration business.ALS try to expand their business to China which is new for them. This report is aimed at to be a consultant to give some assistance about the feasibility of this new venture by analyze political, economic, socio-cultural, technological and legal environment of China.
The data is collected by combine with other’s opinions on website as well as in proquest belongs to Curtin and also compare Australia and China’s environment and culture by use Hofstedes Cultural Dimensions.

Introduction
Australian laboratory services ltd(ALS) is an Australian company exploring the business in China . This report furnishes an analysis and evaluation of the external environment of China .

The purpose of this report is describe findings and informations of China external environment.This analysis will be conferred in the report for promote ALS’s deciding to expand their operations in China. The analysis include political, economic, socio-culture, technological and legal environment of China.

The findings of China’s external environment are related to ALS company. The opportunities and threats of China’s external environment will be most focus on and be accompanied by strengths and weakness of ALS company. SWOT analysis is the basic of the feasibility of this expansion

This report will present relevant the information on the political economic, socio-cultural,technological and legal environments that affect ALS company. An analysis of the findings will presented in each sections and followed by a SWOT analysis. A recommendation section will be included in final of report.

BODY
Political
2.1 government stability
The China’s government has been stable for a decade. Although, in this few years, riots happened in China which has resulted in unstable condition for foreign companies’ investment. China government adopted very strict measures to stop and prevent this conditions in order to creates a safe situation for foreign investors
2.2Government relations
The China’s government has friendly and open relations with neighbouring countries .China is a member of ASEAN, maintains trading relationships globally and has a positive political relationship with home country
2.3 Analysis
This demonstrates that the government is stable and therefore presents a safe place for foreign trade. In addition, friendly political relationship presents are positive for foreign business companies.Both of them create opportunity for ALS Company to do business in China.

Legal Environment
3.1 Business laws
There are three basic business laws in China: The Company Law of the People‘s Republic of China; The Income Tax Law of the People‘s Republic of China for Enterprises with Foreign Investment and Foreign Enterprises; Interim Provisions for Guiding Foreign Investment; Industrial Catalogue for Foreign Investment; Interim Provisions Concerning the Investment within China of Foreign-invested Enterprises, Provisions Regarding the Merger and Separation of Foreign-invested Enterprises, and Liquidation Measures for Enterprises with Foreign Investment
Currently, the China’s government is considering its existing laws and statutes in accordance with the model of the WTO. It has abolished certain obsolete laws and regulations, and will gradually revise the laws and regulations that are incompatible with the rules of the WTO
3.2 Labour laws

Analysis
In order to encourage foreign companies to invest in China, China Government has gradually set up a relative complete law system
A positive and completed business laws and labour laws are provide an opportunity for ALS company’s business expanding in China.

Economic Environment.
4.1 Currency exchange rate ($)
China has had the highest average yearly economic growth rate between 1980 and 2004 of 9.8%().During the global recession of 2008 and 2009, China recorded GDP growth of 9.6% and 9.2% respectively. It is difficult for overseas company do business in China.
4.2 Economic trends/forecasts
Due to the strong confidence in China’s long term economic prospects, foreign direct investment in retailing continues to increase in China. By the end of August 2009, the total number of foreign investment companies reached 2,400, and the total investment capital in China surpassed US$4.8 billion
4.3 Analysis
China become the second biggest economy entity in the world just behind America. Develop business in China become a common, popular and necessary step for a international company include ALS. In addition, high economic growth rate provide positive opportunity for ALS’s expanding in China.

Socio-cultural Environment
5.1 Hofstede’s Cultural Dimensions

According to Hofestede’s diagram, as we can see , Australian and Chinese have huge differences in many factors. Australian are more individualism, Chinese are more rely on group no matter family or company. There is a big difference in power distance, in China, power distance reach 80, it means Chinese are always limited by position gap. Another huge difference is indulgency, people in Australia are great more free than people in China which is reflected in diagram, it has a gap about 50. Due to the strong confidence in China’s long term economic prospects, foreign direct investment in retailing continues to increase in China.
5.2 analysis
The minimum wages increased by China government provides more trades around company and people in China. It is a opportunity for ALS to expand business in China to get more profits. But the differences between to countries in socio-culture become a big problem in management and development in ALS’s business in China.

Technological Environment
6.1 Technological infrastructure
Chinese science strategists realize China's greatest opportunities in technology fields such as computers and biotechnology, where creates a chance for China to make innovation in these areas.
Based on the data supplied by the State Development Planning Commission, during the Ninth Five-year Plan period from1996 to 2000, China has significant technological development. 50,000 projects have been set up under the "Spark Plan". Started in 1986, these projects were actually a technological program in order to enhance the IT level in rural areas.
6.2 Communication networks
Sina Micro-blogging site is widely considered as one of the biggest online marketing platforms in China and is reportedly a bigger phenomenon than Twitter in the US.
China has the highest number of internet users globally at 454 million
6.3 analysis

SWOT analysis
Strengths
China has open-door policy and the Chinese economy opened to foreign trade. Today China integrated into the global market, also the compant in China integrated into global economy easily. At same time, wages and labor payment is low, company can get better labor in China with a lower prices. As we can easily see, there are plenty of natural resources in China ,it is useful to the company which need natural resources to complete production. In addition, China has the largest population compared to any other countries around the world which is 1.4 billion, this factor created incredible opportunity and future potential buying power for business company.

Weakness
1 disorder financial sector
2 slowly increasing of energy, transportation and important raw materials
3 it is inequality increasing in rural&urban, coastal&western provinces, production in cities has displaced rural workers, surplus labor lead to rising unemployment and inequalities in income distribution.
4 growth of average inflation but wage growth has not kept pace with inflation
5 Lots cities are jammed and China should invest enormous money in infrastructure.
6 The education level just reach the middle stage than other developing countries--180 million illiterates of semi-illiterates over the age of 15

Opportunities
With the success of economic development, China has the great opportunity to fully leverage its strengths to significantly enhance.China has open-door policy and the Chinese economy opened to foreign trade. Today China integrated into the global market, also the compant in China integrated into global economy easily. At same time, wages and labor payment is low, company can get better labor in China with a lower prices. As we can easily see, there are plenty of natural resources in China ,it is useful to the company which need natural resources to complete production. In addition, China has the largest population compared to any other countries around the world which is 1.4 billion, this factor created incredible opportunity and future potential buying power for business company.

Threats
Although the government in power is very stable, there still some riots happened in China, it will be challenges for ALS company. In addition, the present presidents Xi Jinping reinforce the power to prevent corruption appeared in government, it cannot avoid all corruption around whole China. And also another serious question for ALS is due to environmental issues include: water stress and pollution; air pollution and acid rain and desertification, the Chinese Government will be the most strict for environment problem.
According to compare socio-culture between China and Australia, it is easy to find there existed many differences. It resulted in a problem for management of ALS. It also a challenges for ALS to develop business in China.

Conclusion
Although there are such challenges in China which is a new country for ALS, in general, the strengths and opportunities are great more than weakness and challenges for ALS’s expanding in China.
China becomes the second biggest country just followed America around the world, to do the business in China become a trend for a global company, the largest population help ALS to create highest incomes and China created a open policy for foreign trades. The suggestions given are that ALS could expand the business in China now.