Pestel Analysis on China

1486 words 6 pages
Political factor:
If Nike wants to open international market such as China, the company would get disadvantages because every country will protect and priority for its domestic products. So, the company must find out exactly these requirements that the country require in Nike to overcome these barriers.
International trade regulations The trade regulations in China are formulated in accordance with the "Foreign Trade Law of the People's Republic of China" in order to maintain foreign trade order and fair competition and to protect domestic industry. In 2011, Nike has difficulties to highlight the deep problems businesses face in manufacturing in China, particularly at a time of sharply rising costs and a stiffening legal environment.
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It can be seen that Nike might face some difficulties in China market because the GPD tends to decrease. From that, it really affects the purchase of customers as well as the profit of the companies. Therefore, Nike needs to consider carefully the economic crisis in China market, so the companies to continue running in the economic and maintain the customers.
Inflation rate
Due to the inflation pressures and tightening of monetary policy the rate of expansion is set to decelerate a little. China's inflation rate averaged 3.3% in 2010 and will pick up to 4.6% in 2011, lifted by abundant liquidity and higher food and commodities prices, but will ease back to 4.2% in 2012.
An official of the People’s Bank of China told traders that liquidity in the country's financial market remained excessive, suggesting more monetary policy tightening lies ahead .
The high inflation rate can influence strongly on the production costs of Nike in China. When the inflation rate increases, the value of domestic currency will decrease. It leads the material cost, labor costs and expense will increase so Nike will spend more cost for manufacturing process.

Society factor
China may be a major power now, but it was the world’s most developed country in the middle ages, and stagnated, or even went backwards, for centuries. Part of this was cultural, a pride and sense of self-sufficiency that led to a closing of


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