How much does the government intervene in the private sector
As I look at the task to find the ideal location for optimal expansion of our financial institutions customer bases overseas, I have chosen China. China has a large and stable financial center. As business within the tech community continues to thrive through this time of gadget status based livelihood on the next biggest newest item, I believe China’s role in distribution within exporting to the United States is going to be paramount. The US continues to push out tech worthy skill sets through higher education and will in turn push US companies to go abroad to the likes of lower labor cost and high outputs from the our Chinese partners. With their robust resources and work ethics it only makes sense to move our banking system in this direction, not only to capture the business of our citizens working abroad, but also to generate big business opportunities within the region.
Challenges we will face in the Chinese environment
China’s population includes more than 50 distinct ethnic groups
In terms of education men and women in china on average complete 12 years of school from primary to tertiary education levels. This differs from the States as men reach an average of 16 years and women at 18years. They do offer a high literacy rate of an average of 95.1% and a positive is that the English language is studied in school
III. Political and legal systems
Government’s involvement within the private sector
About 300 procedures subject to government approval, mostly in the areas of real economy, small and micro-businesses and private investment, will be removed, merged or devolved to a lower level of authority to avoid overregulation, according to a statement released after a State Council meeting
Compliance to regulations and local and government laws
Its history consists of its foundation of the Peoples Republic of China being founded in 1949. It was at this point in China that they began their economic development and designed its large scale economic structure
Exports overall they fall at number 2 in the world
Imports they are at number 3
U.S.-China economic ties have expanded substantially over the past three decades. Total U.S. China trade rose from $5 billion in 1981 to $536 billion in 2012. China is currently the United States’ second-largest trading partner, its third-largest export market, and its biggest source of imports
How it helps the progress of globalization within the financial institution
Association of Southeast Asian Nations (ASEAN)
Risks worth taking?
Beneficial to stakeholders?
(2012). Retrieved fromwww.china.org.
Calkins, J. (2013). Banking abroad. Retrieved from http://www.chinabusinessreview.com
Cuts in red tape to help businesses. (2012). Retrieved from www.china.org
Morrison, W. (2013). China-u.s. trade issues . Retrieved from www.fas.org
The world factbook. (2013). Retrieved from www.cia.gov
Wild., & Wild, (2014). International business: The challenges of globalization. (7th ed.). New Jersey: Pearson Education, Inc. DOI: wow.coursesmart.com
This is the task that is due – to follow the Outline above –
1500 – 1800 words total –
A regional bank has decided to open an office overseas for serving those businesses that are expanding internationally. Choose a country with a large financial center that you believe would be helpful to your customer base.
Discuss some of the challenges you may face in this new environment.
What are the cultural, ethnic, social, and educational characteristics?
Describe the political and legal systems.
How much does the government intervene in the private sector?
How will that affect your financial institution?
What type of economic system does it have?
What is the history of that economic system?
How is the country involved in international trade?
How does the government get involved in trade issues?
Will that help or hurt your financial institution?
Will your presence in this country be helpful in your attempts to invest in other developing countries?
Is this country involved in any regional integration efforts? How so?
Why did you choose this location for your bank?
As a manager, what would be your overall assessment about whether you want to pursue opening an office there?
Are the financial risks worth taking?
Will it be beneficial to all of the stakeholders?
If you decide to pursue this, what type of presence do you think would be best suited to your objectives?
Part 2 –
Despite some of the business challenges that you identified about your chosen country, you decided to move ahead and open an office in the financial center of this country. Your first customer is a large MNC that is looking to finance a plant in Latin America. They have asked for your assistance in advising them on this business endeavor.
Using information that you gathered from your Phase 4 IP and other course materials, discuss its options and the foreign exchange aspects that affect the financing for the MNC. Include the following:
Foreign currency risk
Why they need to hedge foreign exchange
What sort of foreign exchange instruments you would recommend
Whether they have to be aware of any government regulations that would affect earnings and cash flow
Include the need to be aware of inflation and interest rates and how it affects exchange rates.
Keep in mind that the country that the plant is in does not necessarily have to be where the financing is done.
Japan is listed as the third country with the largest economy. Therefore, opening a regional bank in Japan will work out well to the bank’s customer base. This establishment is bound to be faced by challenges in the course of its taking a ground. The expected challenges are as a result of cultural differ, social and educational system differences………………………..
Get instant access to the full solution from yourhomeworksolutions by clicking the purchase button below