POLITICAL, ECONOMIC AND CULTURAL ANALYSIS OF CHINA
China's regulatory system remains obtuse to outsiders, and foreign companies are advised to use Chinese advisers to assist them in navigating the often-ambiguous regulations that might apply to their situation. Because of China's commitment to the WTO, regulations affecting foreign direct investment and foreign trade are due to be published, and China is also committed to helping WTO members understand the regulatory environment. The central government is also committed to eliminating local rules that sometimes appeared to take precedent over the federal government's laws in order to avoid international trade disputes (Country Commercial Guide, 2004).
China has unofficially but effectively pegged the exchange rate for the renminbi to the American dollar since 1997. In general, the country's balance of payments situation remains strong. Recently, the government has adopted a tighter monetary policy to control investment (Country Commercial Guide, 2004).
China's GNP growth is healthy and steady. The GNP increased 8.5 percent from 2003 to 2004, and 9.1 percent from 2002 to 2003. The previous two periods were also strong, with a growth rate of 8 percent from 2001 to 2002 and 7.3 percent from 2000 to 2001. In addition, the nation has almost no inflation, with a rate of 1 percent for the 2003 รป 2004 period, and deflation from 2002 to 2003 (Country Commercial Guide, 2004).
Industrial output growth is strong in China, increasing 15.7 percent in October 2004 compared with October 2003. Total industrial output for October 2004 was $58.9 billion ("China's Output," 2004). Official government statistics place the unemployment rate at 4.5 percent for 2004; these statistics indicate that unemployment is increasing by approximately one-quarter percent per year from 2001 to 2004. However, nongovernment analysts put the unemployment figure between 8 and 15
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