Should Tim Hortons Expand into the Chinese Market?

Running Head: SHOULD TIM HORTONS EXPAND INTO THE CHINESE MARKET? 1
SHOULD TIM HORTONS EXPAND INTO THE CHINESE MARKET?
Student Name
Institutional Affiliation
Facilitator
Course
Date

SHOULD TIM HORTONS EXPAND INTO THE CHINESE MARKET? 2
Introduction
China is among the nations which are developing at a fast pace. It has the second largest
world economy with a population of 1.39 billion. China embraces a free economy with a score of
58.4 in terms of economic freedom as indicated by the 2019 Index. In the region of Asia-Pacific
the ranking of China is position 20 out of the 43 nations in terms of economic performance
having a current gross domestic product growth rate of 6.9 percent. The Chinese economic
performance is below the expected averages both at its region and the world at large
(Shambaugh, 2013).
In this essay, we analyze the viability of Tim Hortons to expand in the nation of China.
The analysis has been done considering various macroeconomic indicators of China such as the
gross domestic product growth rate, inflation, interest and unemployment rates, the Chinese size
of the market, exchange rates and other crucial macroeconomic indicators.
Discussion
The Chinese size of the market
China is among the nations with the highest population in the world with a population of
1.39 billion. This means that the size of the market of the Chinese economy is large enough for
investment. The number of Chinese people who work is approximately more than 805 million.
This means that the consumption rate of the Chinese market is high (Kohli, 2014). As a result, it
would be a nice decision for a business organization to invest in China based on the size of the
market.

SHOULD TIM HORTONS EXPAND INTO THE CHINESE MARKET? 3
Considering the size of the market, it would be okay for Tim Hortons to expand its
operations to China since there is a large market which has a higher consumption rate.
Chinese gross domestic product
Chinese gross domestic product has been analyzed under various stages which include
the gross domestic product rate of growth, the nominal and real gross domestic product rates of
growth, real gross domestic product per capita and gross domestic product per capita purchasing
power parity.
China has been performing well economically as measured by the gross domestic
product. Currently, the gross domestic product growth rate of China stands at 6.9 percent. The
annual gross domestic product growth rate for China has been averaging 9.5 percent with the
lowest growth rate of 3.8 percent having been recorded during the year 1990 and the highest
growth rate value of 15.4 percent having been recorded during the year 1993 (Rawski, 2018). At
the current growth rate of 6.9 percent, China is doing great among the developing nations and
better results are anticipated in the future.
The nominal gross domestic product measures a nation’s economic growth without
considering current market conditions such as inflation. It is actually the gross domestic product
which is not adjusted for inflation. It is mostly used in analyzing a nation’s quarterly economic
performance (McCallum, 2011). The Chinese nominal gross domestic product growth rate
currently stands at 9.8 percent which is a high rate as compared to many developing nations. The
Chinese nominal gross domestic product growth rate has been averaging 12.1 percent since the
year 1993. The lowest growth rate of 5.86 percent was recorded during the year 1999 September
while the highest growth rate value of 12.07 percent was recorded during the year 1994.