a) Economic Risk Economic risk referring to the chance that macroeconomic conditions like exchange rates, government regulation, or political stability will affect an investment, usually in a foreign country. As an example, let assume Aroma Nyonya wanted to build their own branches anywhere in China to expand their production. Aside from the business risk associated with making their production profitable, Aroma Nyonya is exposed to economic risk. Where political environment might shift quickly that may lead into the significant change laws from the government of China that affect Aroma Nyonya’s ability to continue to expand branches while maximizing their products in China.
In 2014 the People’s Bank of China (PBOC) doubled the daily trading band within which the RMB is permitted to fluctuate. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. The Chinese government faces numerous major economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic consumption; (b) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and increasing numbers of college graduates; (c) reducing corruption and other economic crimes that in recent years has been a prevalent
Samuel Huntington (1993) believed that economic modernization might increase the growth of urbanization and the rising of middle class, which could unleash a constellation of social forces to pine for democratic governance. In addition, the middle class tended to be revolutionary in its early development and they became conservative over time. However, the landscape of middle class in China was not the same as the Chinese middle class remained conservative all the time, as they did not ask for the autonomy and independent from the
Globalization may become the potential threaten for traditional regional cultures and economics, in particular, the Chinese economy is in transition. (Zhang, p.740) On the other hand, globalization not only promotes the cooperation between countries, enforced the communication between the human beings and the world, (Zhang, p. 739) but also create the opportunities for the development of modernization. Therefore, local culture has absorbed the global culture and to achieve the goal of development itself. In other words, the global culture would not harm the local
Reconstruction of China’s economic has been expanding progessively for the past decades, while the purchasing power of people has strengthened annd reinforced significantly, it enegized the market througoutly. Eventhough China is still having a relatively low GDP per capita, its accelerated economic growth and steadily increasing purchasing power has risen attraction of market oriented FDI, for example fields of basic chemicals, drinks and household electrical
On the other hand, the fiscal policy is uses to affect the economy attempt to improve unemployment rates, influence inflation as well as control interest rates. This is through with lower tax rates and then attempt to fuel economic growth. However,
Second, examining the incentives and preferences of the key interest groups, I shed light on the China’s power distribution. Developed in the 1980s and 1990s, Lieberthal's model of "Fragmented Authoritarianism" provides a framework to study the distribution of power and decision-making authority within China's vertically segmented political system. (Lieberthal and Oksenberg, 1988; Lieberthal and Lampton, 1992).13 The model considers the "fragmented and disjointed" authority below the very peak of China's regime as a main feature of the political system after the reforms in the 1980s (Lieberthal and Lampton, 1992). Is this still applicable today? I refer to Saich (2010) and Lawrence and Martin (2013) for outlining China’s political institutions14 and further I include Mertha’s review (2009) on FA and Xu’s analysis of the “Regionally Decentralised Authoritarian” regime (2011) in order to take into account recent developments.
Overview of the Chinese Economy Out of all 195 economies in the world, china is ranked 2nd in Gross Domestic Product (GDP). China has a total population of over 1.3 billion people. The average annual income in china is around sixty-four-thousand yuan, which is around ten-thousand Australian dollars. China has an annual increase in GDP of 10%, which makes the world’s fastest growing economy. In 1981, 88% of China’s population suffered from poverty, in 2012, it dropped to 6.5%.
In recent years, Vietnam’s export markets have experienced large shifts from Europe to Asia and the United States. According to WTO, (2007), the share of exports to Asian countries rose from 22.6% in 1986 to 50 per cent in 2005, whereas that to European countries shrank from 55.6 per cent to only 18.6 per cent during the same period. In particular, after the normalization of US-Vietnam relations in 1995, and the Vietnam-US bilateral trade agreement came into effect in 2001, Vietnam’s exports to the United States relative to its total trade increased dramatically, from 3.65 per cent in 1995 to 7.01 per cent in 2001, and 21.63 per cent in 2006 (Kien and Heo,
The research has defined two factors to examine whether these drivers are directly affecting the bond issuing of enterprises. The first factor is firm-specific factors such as firm growth, profitability, leverage and so on. The second element is market-specific factors, for instance, larger markets with greater liquidity will encourage firms to issue bonds in order to raise fund. Before starting to do the data collection, the researcher notice two important adjustments to make policy design to be useful in comparing Asian and Latin American debt markets. The first one is to separate the effect of firm-specific on firms’ decision to issue bonds from effect of market growth and liquidity.