National Situation in China and its Implications to China Business

Abstract

Based on an analysis of the Chinese WGIs, we found that the Chinese government has improved its government effectiveness, regulatory quality, and rule of law after entering the WTO in 2001 whilst trading-off its double-digit economic growth with a tolerance of rent-seeking activities to compensate for a unique political environment characterized by a single opinion up to 2010. Nevertheless, the changing course of a double-digit to a single-digit economic growth starting from 2010 may imply that the Chinese government may now look for a quality rather than a quantity economic growth within a tighter control of corruption which calls for a well balance between establishment of guanxi with government officials and practices of dominated cultural ritual such as gift-giving.