International Economics: China - Term Paper Example

? International Economics: China of affiliation: International Economics: China For the economy to develop in any given country, there must be several connections, converging to bring out a perfect network in the field of marketing. Here, the economical connections involve a well-staged education and technology incorporated by steady economic plans. It is pertinent to note that many individuals do take the economy as a particularly dismal and dry subject that primarily deals with statistics in a dusty and monotone manner. General development of the economy can as well be monitored factually from a China government (Atsmon & Magni, 2012, p.17). China is one of the countries that constantly enjoy a well-developed economy; the above is a statement made by several scholars. According to the experts, it is true that China economy has been growing steadily with a growth rate of two digits for some time now. Frankly, the above statement is true, it amazes all the other nations in the world, and it is regarded as a miraculous economic growth. Evidently, China’s development is a foster to the commercial opportunity in the country. It follows that its development has in one way or another facilitated the attraction of the overseas investors who do not only invest but also run business in the country. It is also encouraging to realize that most of the products made in China are exported worldwide, due to both high quality and low prices that they are branded with. Generally, China has gone through the rescuing of the falling economic stability in the country, and now they are one of the world’s stable economies. China, being one of the thrilling nations in terms of the economy, has an excellent standing in the world. In the standings, according to observers and researchers, China is second after USA in terms of economy. However, it is only 10% in dollar terms of the US economy. Fortunately, the low cost of production and cheap labor in the market have facilitated China’s development. It is clear that the GPD of China shows that China has been maintaining a high rate of growth. It is noted that the GPD growth oscillates from 8 to 10 percent annually. It is worth noting that the current inflation rate has been record low as the country could maintain and monitor the required trend. For instance, in 2013 January there was a record of 2 percent (Yu, 2011, p.110). According to China’s inflation rate, from 1986 to 2013, the inflation rate in China has been an average of almost 5.89 percent. The highest inflation rate was in 1989 February, when the country recorded a 28.40 percent inflation, the lowest being in April 1999, when the nation achieved a record of -2.20 percent. The following is a chart showing inflation rates in China. Information on foreign exchange in China is as follows: first, it is worth knowing that China’s basic foreign exchange is composed of the US dollar. As per the experts’ analysis, it is evident that institutional and governmental bonds, excluding the Hong Kong reserves, by the end of March 2011, were holding almost $3.0447 trillion. Additionally, in foreign exchange, it is informative that China manages $ 200 to 400 billion; this is additional to the foreign exchange. The following analyses examine foreign investments during the past five years. After a thorough survey, it is revealed that the country’s FDI was $111.7bn, by last year, but this equaled to 3.7 percent. Overhanging debt is one of the worst situations that a nation can witness in its struggle to evade the fall in economy (Wheelan, 2002, p. 186). Conducting research in Angola, it is evident as per the experts that the overhang has widely influenced and trapped several companies in downward spirals. Precisely, majority of revenues and cash flow is directed to servicing of the existing institutes. Gradually, this creates operational field that illustrates the correct phenomenon that can lead to a crammed debt that is incremental. This is how overhanging came about in Angola. It follows that the above is brought about by the relationship between the GDP growth rate and the external debt (Wei, 2002, p. 682). Further, it is wise to note the principal trading collaborates of the Angolan nation, where some of the main trading partners are India, USA, China, the European Union, just to name a few. Major exports of the Angolan country are as follows: petroleum, manganese, gold, uranium, and petroleum. Similarly, where there is export, one cannot fail to notice importations; this phenomenon also applies to Angola, and some of imports in Angola are textiles, foods, and consumer goods. It is worth noting that there are several MNC’s countries that transact with Angola. For good and profitable transactions to take place, it is vital for members to have headquarters in Angola. Therefore, one of the head quarters is in Cabinda. However, the major countries that are doing business with Angola as MNC’s are the USA and India. General system of business in Angola is the provision of senior consultations of every management as well as the implementations of the operating systems that deal with property management. The property management systems are capable of gearing the competitiveness of the business strength. Elementary, as well as secondary, are other systems that facilitate the growth of business in Angola. All of the above mentioned work as a unit to enforce the business growth in Angola. Apart from several systems and the MNC’s that aid in the development and support strategies of the economy, it is important that for the above to be successful, a country should be well equipped with general technology. Communication here involves the transmissions of information; transportation entails the movement of goods and services while the Internet helps a fast transmission of the signals to the destinations. Country’s culture is one factor that affects the economic status of any country (Mirowski, 2002, p. 89). Talking about Angola, it is evident that there are cultures that affect the country’s economy. For instance, it is well known that the majority of the citizens are Christians, Protestants, with a few being followers of Islam. Corruption index in Angola, as in any other African country, is rather high. Corruption is an issue that has been in the headline for quite some time now. It is an alarming issue that needs to be addressed and rectified with immediate effect so that to incline the economic status of the affected. After almost three decades of instability and conflict, Angola still experiences the alterations caused by not only widespread corruption but also weak governance. Corruption in this nation is practiced at all levels of society. Corruption in Angola is encouraged by the various forms of issues, for instance bureaucratic, grand corruption, politics, just to mention a couple. Extractive industries are the major places where scale of mismanagement and corruption is rampant. Hofstede’s cultural dimensions theory provides insights into the organizational as well as national culture. Angola’s attitudinal dimensions are under the influence of the human rights activist; this empowers individuals or groups by fostering acquaintance. On the contrary, Trompenaars’ cultural theory offers a classification based on not only a mix of cultures but also the value of patterns. There are several values orientations in the Trompaars’ theory: some of the values are nearly the same as in Hofstede’s theory. Specifically, the values identified are the particulars versus the universalism, individualism versus the communitarians, and, lastly, the human nature. It is vital to identify that there are several lessons that MNC’s can get from values like particularization and universalism and that cultures can negotiate universally with a certain potential venture (Chen, 2008, p.126). However, the potential jointer can be a venture so that the targeted goal is achieved. Culture is different according to its originality, and a global culture can enhance the development of the economy via good business relations in one way. Doing business in Angola is easy, although the business set-up should be strategic and in line with the market potential in the country. Further, since there is the presence of overhanging debt in the country, it can be hard, and it needs someone who is critical and understands the nature of the market systems. References Atsmon, Y. & Magni, M. (2012). Get ready for China's mainstream consumers. McKinsey Quarterly, Vol 3 (1), pp. 15-18. Print. Chen, B. (2008). Joint venture, risk sharing and international transfer of technology: a principal-agent approach with a case study on China. New York: Chen. Print. Mirowski, P. (2002). Machine dreams: economics becomes a cyborg science. Cambridge: Cambridge Univ. Press. Wei, L. (2002). China's Soft Power in Africa: Is Economic Power Sufficient? Asian Perspective, Vol. 36 (4), p. 667-692. Wheelan, C. J. (2002). Naked economics: undressing the dismal science. New York: Norton. Yu, H. (2011). Developing China's Hainan into an International Tourism Destination: How Far Can This Go? East Asia: An International Quarterly. Vol. 28 (2), p. 85-113. Print. Read More