Hershey In China | EssayIvy.com

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Hershey in China

China has been initiating reforms since 1978. China’s economy changed to market-based

economy from its initial centrally planned market. Since then, the economy experienced rapid

growth and also developments in social aspects . China is one of the leading economies with

fastest expansion and sustainability, having liberated More than 800 million people from

poverty. It contributed to the achievement of millennium development goals globally by reaching

their targets in the year 2015. It remains developing country because its per capita income is a

fraction of the developing country. It has an average of 1453.86 USD GDP per capita. Poverty

indicates China has more than 70.17 million poor people in the rural areas. (Bookstore). The

country’s GDP growth rate averaged 1.85 percent between 1996 and 2016. It reached 2.4 percent

in the first quarter of 2011 and dropped to 1.20 percent low in the first quarter of 2016. (2. T.

ECONOMICS). Rapid economic growth of China has brought rapid urbanization, external

imbalances, and high rate of migration to urban areas, and high population growth. Hence

Hershey should enter the China broad market, and its presence be increased tremendously to

serve the massive population growth in the area.

For china’s growth to be sustainable, there is need for meaningful adjustments. It has a

population of 1.3 billion making it the second largest economy in the world. The large economy

also makes it important and influential in the global economy. It is also increasingly facing

unemployment due to high population growth rate. Recent trends of economic growth of the

country are conspicuous and happen to have a wide market due to its population. It is important

for Hershey to enter the market and scale its self accordingly.

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Foreign exchange in China has averaged to be 875780.58 USD million. In 2006 China

global account surplus scored up to $250 billion, it was about 9 percent of its GDP. It became the

largest surplus country in the worldwide. Exchange rates have been changing time to time; the

significant change noticed from the year 2011 to 2016; 2011 went down to 3180 USD million,

but it gradually rose up to 35514.12USD billion in the year 2016. Its reserves have dropped more

than $760 billion since the increase in 2014. Recently China exchange rate has been declining at

an alarming speed of roughly $100 billion a month. (T. ECONOMICS). It was as result of

awkward exchange regime which was adopted by China.

China has an emerging economy that offers opportunities for foreign investments. It has

tremendous potential for economic growth due to its large market however it is facing socio-

political and economic drawbacks to its rates of exchange. High population growth has led to

rural to urban migration hence high unemployment. The political system of China is communism

which affects the economic stability of the country. Political instability has contributed to

underscoring of foreign business activities. (Balfour).

Since 2006 China is struggling to pay balances and sustaining its growth. It has been outweighed

due to external imbalances, rapid urbanization, internal migration of labour, and challenges to

environmental sustainability. Due to such challenges its condition of the balance payment, it is

not sustainable.

Hershey should be in various agreements like china’s bilateral and regional trade

agreements. They include a bilateral agreement between china and India, Trilateral China-Japan-

Korea agreement, and china-USA FTA. (John Whalley). All agreements are primarily for export

growth. Disputes like anti-dumping in China should be relevant for Hershey. Dumping is the

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continued problem which China is facing due to a high number of industries and population.

Other disputes include Domestic support and tax measures.

In conclusion, Hershey should enter the China market and increase its presence because it

still has the largest market. It is the growing economy which has enough labour force needed for

economic growth. China is an important role player in the global economy which makes it

suitable for the Hershey presence and establishment.

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Works Cited

Balfour, F. "Chinese reform picks up speed." BUsiness-Environment-China. 25, October 2016

https://www.usi.edu/media/3654697/Business-Environment-China.pdf.

Bookstore, The World Bank's Development. The World Bank. 25, October,2016.

http://www.worldbank.org/en/about/contacts#general-infformation.

ECONOMICS, 2016 TRADING. China GDP Growth Rate . 25, October, 2016.

http://www.tradingeconomics.com/china/gdp-growth.

ECONOMICS, TRADING. China Foreign Exchange Reserves. 25, October, 2016.

http://www.tradingeconomics.com/china/foreign-exchange-reserves.

John Whalley, Chunding Li. China’s regional and bilateral trade agreements. 25, October,2016.

http://voxeu.org/article/china-s-regional-and-bilateral-trade-agreements.

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