If current trends continue, China may be the world’s largest economy by 2020. Discuss the possible implications of such a development for (a) the world trading system, (b) the world monetary system (c) the business strategy of today’s European and U. S. global corporations, and (d) global commodity prices. A) The implications of such a development for the world trading system is that China will basically will be the root of trading. From my perspective, China’s growth of economic will benefit overall economy of world. In the trading system, China will play a major role on deciding the policy and implications how the trading should be done.
With its sophisticated export increase do to the rapid increase in technology; China is sharply stepping up exports. With China’s dominant imports and exports trading and taking a big part in WTO, trade as a percent of GDP has grown dramatically, rising to a level far greater than for any country of similar size. B) With its high output of economic growth, in world monetary system, I think China’s currency might be powerful than U. S. dollar or equal or more than other world currency. In monetary system, China’s demands for its large economic development, will put pressure on other global countries how its plays a leading role.
The Chinese Yuan will be in the near future a major international currency, benefitting from the strong position and of the Chinese economy and the latest arrangements, and the stability of the Yuan’s value when it is compared to other major currencies. C) The implications in European and U. S. global corporations would be from my perspective that more corporation business will shift to China. With so many corporation works being sent overseas, there is no doubt that China will be leading part in these corporations.
China will generally set polices in what is better interest for corporation and China’s economic growth. I think that business strategy will be more controlled by China do to the resources that it’s going to provide and how it will be distributed throughout the global economy. D) I think this is going to be the most impact throughout the whole world with economic growth of China. Global commodity price changes can affect inflation and the terms of trade at the global level, with possibly large effects on other emerging and developing economies.
In upcoming growth, China will set benchmarks in commodity pricing along with U. S. at side. Chapter 2 question 4 What are the risks facing foreign firms that do business in Indonesia? What is required to reduce these risks? The risks that I personally believe firms that do business in Indonesia would be loss of income to bribes. Moreover, jail time for foreign enterprises on flimsiest of pretext as well and long waits to establish a business are the risks that foreign firms are facing. In order to reduce or say minimize these risks, a radical change is required.
Indonesia has an anticorruption drive, which may or may not work. As stated in the case, Indonesia has launched an anticorruption drive; it just needs to implement better ways of putting that law into affect. A more assertive policy needs to take affect on people in order to make the country better and bring out the resources that it has to offer like Oil production. Moreover, political elites need to get involvement with each other and foreign countries in shaping and assisting to rebuild a better Indonesia.
As for business firm, businesses must take a pro-active approach to security and risk management. Doing so reduces the chances of a company becoming a victim, but also minimizes the likely fallout in the event an incident was to occur. An effective risk prevention and mitigation plan will enable the company to effectively respond, recover and resume normal business operations within the shortest time frame possible so as to minimize the potential business impact either financially or from a reputation standpoint.