FINANCIAL MANAGEMENT

International Financial Management

International Financial Management

Introduction

China and India has been one of the most rapidly growing economies in the recent past. They offer great opportunities for businesses, willing to expand their business. The growing population of the countries itself also present opportunities to make use of excess demands of goods and services. However, these countries also offer several challenges and risks to investors, that investors may have to face. In this paper, we will separately analyze the risks and potential problems of the country that an investor could face.

China

Economic Performance and Business Opportunities

Chinese Economy has been performing very well since 1978 reforms. It is important to note that Export is not only factor that had helped significant development of Chinese Economy, but investment has also significantly affected the growth and development of China. China's fixed capital formation jumped from 30% in 1980 to around 47.5% in 2010. In the last few years, vast infrastructural development has taken place. It includes development of roads, housing and factories. The development in Chinese Economy is also evident from the fact that China has been able to achieve high national savings and has sustained for a very high level .

China presents great opportunities for investors and entrepreneurs. It has been achieving a continuous growth of double figures in the recent past. This significant development in recent times has lifted many citizens from the problem of poverty. The main factor leading to significant development in the country is attributed to the fact that the growth in the country is followed by an appropriate demand of goods and services that is aiding the development in the country.

China has a nominal GDP of $5.93 trillion, and it is the second largest economy of the world after America. The major exports of China include Machinery and Equipment, Garments and accessories, and High Tech Products (Alan, 2009, Pp. 112-216).

Chinese economy is now considered one of the best around the world. Since the revolution, the economy has been witnessing an economic growth of double figures consistently. This growth is attributed mostly to the privatization of the state owned companies as those companies were able to generate good results and earn huge revenues for the country. In the 1990s, it also integrated with Japan, South Korea and other countries which assisted China to become a super economic power. China has always opted for an expanding approach. It is heavily involved in foreign direct investment, which has contributed significantly in the growth of the economy. Even United States of America and donor agencies like IMF and World Bank has accepted that Economic Practices in China are fair and according to international standards.

China is the fourth- most-visited country in the world. It had a total of 50.9 million visitor's inbound international visitors in 2009. It is the second largest trading power after US, with a total trade of US$ 2.21 trillion. It has highest foreign reserves in the world. At the end of 2010, the foreign reserves of China have increased ...