For a long time China was considered to be leading civilization in the world arts and sciences. However in the 19th and early 20th centuries China underwent civil unrest, famines, and military defeats. After World War II, China under Mao Zedong underwent an autocratic socialist communist system. In order to assure China’s power and control he forced strict rules and regulations over everyday life of the people that cost the lives of millions of people. In 1978, Deng Xiaoping came into power and he began to change the country by creating and directing a market oriented economic development. This caused the market to quadruple by during the year of the millennium. The Chinese population living standards had been improved and there had been severe improvement in the choice of freedom. But political control still remained very tight. Since 1990 China has increased its participation in international organizations due to globalization and economic factors. (Factbook, 2010) 6

Travel in China ¼ Hotels and Accommodation 7

PESTLE Analysis 9

Political 9

Economic 10

Social 12

Technological 13

Legal 15

Environmental 17

SWOT Analysis 18

STRENGTHS 18

WEAKNESSES 18

OPPORTUNITIES 19

THREATS 20

Starwood Hotels and Resorts 21

Works Cited 29

Executive summary

Current project represents analysis of the macroeconomics environment in China (including SWOT and PESTLE analysis). We have also analyzed already existed hotel chain within the country, from the investors point of view due to invest into the future projects of the hotel chain to support the economy of China. After cooperative search of the hotel chain, we decided to choose Starwood Hotels and Resorts. We believe that the already existed number of the hotels can increase rapidly, also bring advantages and positive impacts on the country’s economy. The demand for hotels is great in especially in the Asia-Pacific region, where the pace of economic recovery is faster. Starwood can capitalize on this trend as its international exposure is wider than most of the other hoteliers. Around 60% of the company’s 85,000-room pipeline is to be built in Asian markets. Moreover, Starwood continues to see a healthy level of development activity in Asia, where 18 out of its 39 new deals have been signed so far in 2010. Revenue per available Room Rate growth was 46% in China in 2010.
Presently, China is driving the recovery in global tourism and, by 2020, it is expected to be the world’s largest tourism market. Since, the company is targeting various Chinese cities where the company is under-penetrated. We expect Starwood to considerably benefit from this strategic expansion. 



Chinas exchange rate policy has been a contentious issue in the global economy, particularly between the China and the West. The West has long criticized China for keeping the Yuan at an exceptionally low value. They claim China enjoys an advantage position due its manipulated lower Yuan value, as it makes China exports cheaper. The US president, Mr. Obama, accused China of being a currency manipulator during his early days in office. The Western world believes that China had pegged the value of the Yuan to the dollar. The Yuan’s value has not fluctuated from its current value of ¥6.83 to the dollar since July, 2008. China denied Obama’s claim and resisted pressure from him to raise the Yuan’s value. When China recorded an 11.9 percent growth rate in the first quarter of 2010, many countries believe it would be fair to share the growth of the economy by appreciating the Yuan. However, China did not find any reasons to do so then.

It is well known that China accumulates vast quantities of foreign exchange reserves as part of its strategy for routing the yuan exchange rate, and that it prevents the US, Japan or the European Central Bank from retaliating by prohibiting foreigners from investing in any significant yuan assets. One solution that would not break any international commitments would be for the US and Japan to declare that they will henceforth only allow the sale of their public debt to countries whose public debt US and Japanese residents are also allowed to buy and hold. Chinese has adopted a free-market strategy unlike the communist form of economic in the Marxism-Leninism Theory. Having lesser state-owned enterprises and encouraged foreign investment has helped to raise living standards in China. However, the political structure of China might not work in European countries, North America and other highly developed countries. This is because the political structure still lacks freedom of the people, which countries that are more advanced would not like. The party control over the state is rather tight when comparing itself to the democratic countries.

Trade policies can hurt or help an economy. Though allowing cheap Chinese exports flood the market permits consumers to purchase services or goods at low prices, some argue this trade relationship depends on the U.S. debt problems with China.