Market Structure In China

2) What is the dominant type/s of market structure that exists in this economy giving examples of the type of market structure?

The dominant types of market structure that exists in China are Monopolistic Competition, Perfect Competition, Monopoly and Oligopoly.

Monopolistic Competition - Freedom of entry and exit, but firms have differentiated products. Likelihood of normal profits in the long term (economicshelp.org). China's Monopolistic Competition is the Foreign Fast Food Firms. Although China is well-known for their large labour force in the agricultural sector, foreign investors from the Western region become very successful. Introducing foods such as pizzas, fried chicken, burgers etc. at reasonable prices contributed to the success

The auto industry is an example of an oligopoly, with leading auto manufacturers in China, such as BYD automobiles, Chery, Beijing Automotive Group, Automobile works and much more.

3) What is the dominant type/s of firms that exist in this economy?

There are three main types of businesses that exist in China. Firstly, there are Limited Liability companies. Here the owners of the company are not held accountable for any debts incurred in the course of the business. Next there are companies Limited by Shares. This means that people can buy shares into the company. Finally, China allows investment from foreigners in the form of business referred to as Foreign Investment Entities. There are several types. The main ones are ● Cooperative Joint venture (CJV) -- Foreigners can run the business as a limited liability or choose not to incorporate. Foreigners would use this option in the short term.

● Equity Joint Venture (EJV) -- This form is the most common form of foreign business in China. It is a form of Limited Liability Company and all parties are responsible for the losses

● Build-Operate-Transfer project (BOT) -- Foreign enterprises that provide construction services such as building bridges, roads or airports. These businesses fund and build the project, then will hand it over to a national company for an agreed return on the investment made. The other types of foreign companies allowed to operate in China are holding companies and Companies limited by Shares with Foreign Investment.

4) Collect 10 years of data on inflation, unemployment and national income for this country and analyze the data with respect to trends and the implications to the economy.

China's economy is known to be the second largest in the world. In analyzing China's economy, it is needful to look at the economy's three main areas: inflation, unemployment and national income. By studying these three main areas over the last ten years, can give an indication of the strength of the economy and predictions for the future. Inflation is the rate at which the price of goods and services rise in relation to the quantity that can be bought with the average dollar. This means that the higher the price for an item, the less that can be