Pest Analysis

• China is a communistic country, and it is steadier than some country which always has some war, anarchy and so on, which is adapted to the development of car companies. • Chinese goverment encourage overseas company to operate in China, such as derating, lower lending rate… • Chinese rule is strict for car purchaser and owner. For example Beijing government claim that the amount of new licenses issue will be limited to 240,000 next year.

This may reduce the sales volume of car. Chinese goverment encourage overseas company operate in China, such as derating, lower lending rate… • Chinese employment legislation is pretty integrated. China’s Tenth National People’s Congress Standing Committee of the twenty-eighth meeting passed the PRC Labor Contract Law. The New York Times, the Associated Press and other mainstream media to comment that the law further to emphasize the Chinese labor contracts labor laws.

It gives the state-owned trade unions and other organizations on behalf of workers with employer bargaining power, which is the Chinese labor management system the most significant changes for 20 years. • Chinese export tax is low, which is good for car export. • Chinese has Environmental Protection Law and Consumer Protection Law, but the administration is not good. Economic Factor • Chinese economic is developing very fast nowadays. • |Month |CPI upticking comper with last year | |Jan. |1. 5% | |Feb. |2. 7% | |Mar. |2. 4% | |Apl. |2. 8% | |May |3. 1% | |Jun. |2. 9% | |Jul.

|3. 3% | |Aug. |3. 5% | |Sep. |3. 6% | |Oct. |4. 4% | |Nov. |5. 1% | —from internet Through the data, we know Chinese inflation rates have been rising this year and it trend to rise. • Chinese employment is lower comper with some countries which are depreession. • People’s Bank of China announced that starting from October 20th the benchmark deposit and lending rate of financial institutions raised by 0. 25 percentage points in 2010, so Chinese government began to implement tight fiscal policy. • Oversea company is allowed enjoy the preferencial treatment of taxation.

• With Chinese economic development and improvement of people’s living standards, more and more people want to buy car, so the market demand is large increasingly. Socio-cultural factor • In china people always believe the car’s level stands their social class. • Chinese began to learn how to enjoy life, so many peopele want to buy a car, which can make life more convenient. Technological Fsctor • Chinese new discoveries are less than developed country. • The speed of change and technology transfer is fast because China want to learn the advanced car tecnological.