??? How does investment climate influence decision-making within a company?
Hello Everyone, we are the students from Erasmus University Rotterdam. Now we are working on our business research about investment climate for development. The sub-topic is "How does investment climate influence decision-making within a company?"
Here is our final draft. Our research paper will be based on this draft. Comments are warmly welcomed!
There are six factors that help firms to investigate the investment climate of a country: the economic potential characteristics, general levels of management, maturity of market environment, political situation and social factors. They can also help firms to predict situations and to set strategies of investment in particular countries.
In the final thesis, we will provide different decision-making solutions which are the results of different investment climates in different parts of world (Asia, EU, North America, South America and Africa). In addition to scientific theoretical research, we will provide some particular cases as well. These cases will strongly support our conclusion. China, being one of the hottest markets in the world, is one of the good stages that show us how a decision is formed by companies using the 6-factor way.
There are still certainly many things to improve the business environment in China, as pointed out at the meeting of US-China business council. Also should the criteria of Qualified Foreign Institutional Investor (QFII) be considered, as they have influence on foreign investment in the domestic market? After analysing the six factors, we have come to the conclusion that although investing in China won’t be risk-free, the investment climate of China will be even better for investors than ever before.
If we look at the economic aspect, China has still got potential to obtain a large economic growth. According to the report provided by China’s State Information Centre (SIC), the GDP growth rate of China is between 8.2 percent and 8.5 percent, which is an excellent number. Foreign Direct Investment is 5 billion dollars in China. Besides, the country’s trade surplus, though shrinking compared with that of year 2003, is still considerable. Providing that China is entering a stage of steady growth, we would say that China’s economy will still grow well in future.
Low-cost labour is an attractive part of China. According to the report by Accenture, 44 percent of the respondent firms consider this factor as the main factor they will do investment in China. Although increasing wages of labours has caused the increasing costs of production in China, China will keep the role of “world factory”.
The country’s rapidly-expanding domestic consumer market remains the country’s chief investment draw, 66 percent of 100 international firms want to invest in China due to this reason (by the Economist Intelligence Unit, June 2003).
Whether China’s government will provide investors a stable political environment is still questionable. The new president of China, Hu Jin Tao, has proved himself to be more tiger than horse, taking on Mr Jiang and pushing him aside, then showing his true political colours by cracking down on dissent and squaring up fiercely to Taiwan. We think investor will bare the risk of losses caused by conflicts between mainland China and Taiwan.
”China will continue to maintain the stable situation of its foreign exchange rate” said the spokesman of the Foreign Ministry of China, “The stable exchange rate of the RMB[Yuan] is conducive to the economic stability and development of China, Asia and the world”, he said at a news conference. Although lots of economists argue that China should allow the Yuan to float freely on international market, or at least should rethink the value of its dollar peg, we predict that the exchange rate will not be vibrated in short time.
The index, representing the ratio of expenditure on food against the whole expenditure reflects the changes of people’s consumption patterns. Experts here predict the urban and rural Engel index will continue to drop respectively to 40 percent and 50 percent by the end of year 2005. Meanwhile, living conditions and the consumption of durable goods has increased as well. For example, owning a car was still a dream to many families’ years ago, but not today.
The Chinese investment landscape is both fluid and increasingly varied. We confirm that successful investment in China is an increasingly context-dependent proposition; driven by industry, target market segment and timing.
Hello Everyone, we are the students from Erasmus University Rotterdam. Now we are working on our business research about investment climate for development. The sub-topic is "How does investment climate influence decision-making within a company?"
Here is our final draft. Our research paper will be based on this draft. Comments are warmly welcomed!
How does investment climate influence decision-making within a company?
There are six factors that help firms to investigate the investment climate of a country: the economic potential characteristics, general levels of management, maturity of market environment, political situation and social factors. They can also help firms to predict situations and to set strategies of investment in particular countries.
In the final thesis, we will provide different decision-making solutions which are the results of different investment climates in different parts of world (Asia, EU, North America, South America and Africa). In addition to scientific theoretical research, we will provide some particular cases as well. These cases will strongly support our conclusion. China, being one of the hottest markets in the world, is one of the good stages that show us how a decision is formed by companies using the 6-factor way.
There are still certainly many things to improve the business environment in China, as pointed out at the meeting of US-China business council. Also should the criteria of Qualified Foreign Institutional Investor (QFII) be considered, as they have influence on foreign investment in the domestic market? After analysing the six factors, we have come to the conclusion that although investing in China won’t be risk-free, the investment climate of China will be even better for investors than ever before.
If we look at the economic aspect, China has still got potential to obtain a large economic growth. According to the report provided by China’s State Information Centre (SIC), the GDP growth rate of China is between 8.2 percent and 8.5 percent, which is an excellent number. Foreign Direct Investment is 5 billion dollars in China. Besides, the country’s trade surplus, though shrinking compared with that of year 2003, is still considerable. Providing that China is entering a stage of steady growth, we would say that China’s economy will still grow well in future.
Low-cost labour is an attractive part of China. According to the report by Accenture, 44 percent of the respondent firms consider this factor as the main factor they will do investment in China. Although increasing wages of labours has caused the increasing costs of production in China, China will keep the role of “world factory”.
The country’s rapidly-expanding domestic consumer market remains the country’s chief investment draw, 66 percent of 100 international firms want to invest in China due to this reason (by the Economist Intelligence Unit, June 2003).
Whether China’s government will provide investors a stable political environment is still questionable. The new president of China, Hu Jin Tao, has proved himself to be more tiger than horse, taking on Mr Jiang and pushing him aside, then showing his true political colours by cracking down on dissent and squaring up fiercely to Taiwan. We think investor will bare the risk of losses caused by conflicts between mainland China and Taiwan.
”China will continue to maintain the stable situation of its foreign exchange rate” said the spokesman of the Foreign Ministry of China, “The stable exchange rate of the RMB[Yuan] is conducive to the economic stability and development of China, Asia and the world”, he said at a news conference. Although lots of economists argue that China should allow the Yuan to float freely on international market, or at least should rethink the value of its dollar peg, we predict that the exchange rate will not be vibrated in short time.
The index, representing the ratio of expenditure on food against the whole expenditure reflects the changes of people’s consumption patterns. Experts here predict the urban and rural Engel index will continue to drop respectively to 40 percent and 50 percent by the end of year 2005. Meanwhile, living conditions and the consumption of durable goods has increased as well. For example, owning a car was still a dream to many families’ years ago, but not today.
The Chinese investment landscape is both fluid and increasingly varied. We confirm that successful investment in China is an increasingly context-dependent proposition; driven by industry, target market segment and timing.
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