International Economics: China - Term Paper Example

of affiliation: International Economics: China For the economy to develop in any given country there must beseveral connections, converging to bring out a perfect network in the field of marketing. Here, the economical connections involve a well-staged education, 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 tome manner. General development of the economy can as well be monitored factually from a China government (Atsmon and Magni17). China is one of the countries that constantly enjoy a well-developed economy, the above is a statement made by several scholars among them Silvia, who is a student in one of the universities in Mexico. 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 invests but also run business in the country. It is also encouraging to realize that most of the products made in China is excepted worldwide, due to both high quality or low prices that they are branded with. Generally, China has participated actively in the rescuing the falling economic stability in the country and now they are one of the world’s stable economy. China being one of the thrilling nations in terms of the economy, it has an excellent standing in the world. In the standings, according to observers sand researchers they affirm that china is second, behind 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, has facilitated Chinas’ development. It is clear from the ground, 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 eight to ten percent annually. It is worth to note that the current inflation rate has been in record so that the country could maintain and monitor the required trend. For instance, in 2013 January there was a record of two percent (YU 110). According to China’s inflation rate, from 1986 to 1013, the inflation rate in China has been an average of almost 5.89 percent. The highest inflation rate was in 1989 February, where the country recorded a 28.40 percent inflation as the lowest was in 1999 April where the nation did record -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 to know that China’s basic foreign exchange is composed of the US dollar. As per the expert’s analysis, it is evident that institutional and governmental bonds excluding the Hong Kong reserves, it is clear that, by the end of March 2011, the reserves 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 the direct 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 was a 3.7 pc. Overhanging debt is one of the worse situations that a nation can witness in its struggle to evade the fall in economy (Wheelan 186). Directing the 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 institutes that exist. 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 682). Notably, it is wise to note the principal trading collaborates of the Angolan nation, where some of these main trading partners are India, USA, china, European and France just to sample but a few. Major exports of the Angolan country are as follows, petroleum, manganese, gold, uranium, and lastly 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 Cabinda. However, the Major countries that are doing business with Angola as MNC’s are the USA, Indians and US. General system of business in Angola is the provision of senior consultations of every management also 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 the above works as a unit to enforce the business growth in Angola. Apart from several systems and the MNC’s that aid in the development and strategies of the economy, it is noteworthy that for the above to be successful, a country should be well equipped with general technology. Communications here involves the transmissions of information; transportation entails the movement of goods and services, while 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 89). Pertaining Angola, it is evident that there are cultures that affect the country’s economy. For instance, it well knows that the majority of the citizens are Christians, Protestants, and a few of Islamic consecutively. Corruption index, in Angola as any other African countries they do witness corruption. Corruption is an issue that has been in the headline for quite some time now. It is an alarming issue that needs to be rectified if not addressed with immediate effect so that economic status of the affected to incline. Budding from almost three decades of instability and conflict Angola still experiences the alterations of not only widespread of corruption but also weak governance. Corruption in this nation is practiced in all levels of public. Corruption in Angola is encouraged by the various forms of issues for instance bureaucratic, grand corruption, politics just to mention but a few. Extractive industries are the major places where scale of mismanagement and corruption is in rampant. Hofstede culture provides insights of 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 contrary, trompenaars cultural has indeed classified with not only mix of cultures but also the value of patterns. There are several values orientations of the trompaars, as follow: some of the values are nearly the same as the hofstedes. Specifically, the values identified are the particulars verse the universalism, individualism versus the communitarians and lastly the human nature. It is vital to identify that there are several lessons that MNCs can get from values like particularize and universalism and that cultures can negotiate universally with a certain potential venture (Chen 126). However, the potential jointer can be a venture so that the targeted goal is achieved. Culture is different according to its originality and that 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 so needs someone who is critical and understands the nature of the market systems. Work Cited Atsmon, Yuval and Magni, Max. Get ready for Chinas mainstream consumers. McKinsey Quarterly. 3: (2012), p15-18. 4p. Chen, Bao. Joint venture, risk sharing and international transfer of technology: a principal-agent approach with a case study on China. New York: Chen, 1988. Print. Mirowski, Philip. Machine dreams: economics becomes a cyborg science. 1. Publ. Ed. Cambridge [u.a.: Cambridge Univ. Press, 2002. Print. Wei, Liang. Chinas Soft Power in Africa: Is Economic Power Sufficient? Asian Perspective, 36.4: (2012), p667-692, 26p Wheelan, Charles J. Naked economics: undressing the dismal science. New York: Norton, 2002. Print. YU, Hong. Developing Chinas Hainan into an International Tourism Destination: How Far Can This Go?. East Asia: An International Quarterly. 28.2 : (2011),p85-113. 29p. Read More