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In China, food dominates, rules complicate


Each component of the red flag with its large yellow star and four smaller yellow stars has a meaning. The color red symbolizes revolution, while the stars symbolize the four social classes—the working class, the peasantry, the urban petty bourgeoisie, and the national bourgeoisie (capitalists)—united under the Communist Party of China.

Location: The Eastern Asia country borders the East China Sea, Korea Bay, Yellow Sea, and South China Sea, between North Korea and Vietnam. It’s the world’s fourth largest country, after Russia, Canada and the United States.

Language: Standard Chinese or Mandarin

Total Population: 1.37 billion

Capital: Beijing

Government: Communist state

Religion: Buddhist and Christian, though the Communist Party remains officially atheist.

Economy: In 2016 China stood as the largest economy in the world (measured on a purchasing power parity basis that adjusts for price differences), having surpassed the U.S. in 2014 for the first time in modern history. China became the world’s largest exporter in 2010, and the largest trading nation in 2013. Still, China’s per capita income is below the world average. The government’s 13th Five-Year Plan, unveiled in March 2016, emphasized the need to increase innovation and boost domestic consumption. Under President Xi Jinping, however, it’s moved slowly on market-oriented reforms because of potential negative consequences for stability and short-term economic growth.

News note: While China’s economy and its state-owned businesses have long been the priorities as the country became an industrial power, the environmental impacts are now being recognized. Air pollution killed more than 1.1 million people in China in 2015, according to the Health Effects Institute. The government is now promoting clean energy vehicles and fining companies for violating anti-pollution rules. It also signed the Paris climate agreement in 2016.

GDP (official exchange rate): $545.1 billion

Currency: Renminbi, or the yuan (conversion rate at press time: 1 CNY equals $0.15 USD).

Franchising in China: The industry remains dominated by operations in food and beverage, and retail, with U.S. franchisors having a strong foothold in both. While it’s an attractive market for U.S. companies with its growing middle class and increasing domestic consumption, challenges include a relatively weak regulatory system, increasing costs of labor and real estate, and a lack of qualified Chinese franchisees. Recent legislation stipulates that to start franchising in China the franchisor must own and operate two company-owned stores for one year in any part of the world. Franchise firms must file with the local commercial authority for the record within 15 days after the execution of the initial franchise contract.

World Bank ease of doing business rank: 78, unchanged from 2017.

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