Case study 2 China’s managed float Summary During the year 1994‚ China pegged its currency‚ Yuan to US dollar at an exchange rate of $1=8.28 Yuan. The exchange rate policy was implemented to prevent balance of payment crisis and US is considered as one of the most influential currency in the global market. By this method‚ China gain rapid economic growth and foreign capital inflows. The stable and lesser risk have attracted many foreign company to invest in china as they can plan and make decision
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were the benefits of doing this for China? What were the costs? I believe that the Chinese government originally pegged the value of the Yuan against the US dollar as an attempt to compete with the U.S. and the rest of the world. The US dollar was the strongest in the global market. The benefits for China were that their yuan would stay weak‚ and their exports would remain cheap while their economy thrived on production for the U.S. economy. The costs for China were that they had to exchange for
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CHINA: TO FLOAT OR NOT TO FLOAT Question 1: What are the implications of China’s exchange rate policy on doing business with and “against” China? Figure 1. China’s exchange rate in government manipulation and expectation 2004-2009 The fact that China made two renminbi (RMB‚ also called yuan) revaluation in 2005 and 2010‚ but in the limit of case study‚ we may just focus on the first one as shown in Fig. 1. On July 21‚ 2005‚ China announced a 2.1 percent appreciation of the RMB against the
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Question 1 I believe that China pegged the value of its currency‚ the yuan‚ to the U.S. dollar in 1994 because at that time the United States was the world ’s number economy and its currency is considered a highly reliable financial instrument. The benefits of pegging the value of the yuan against the dollar include more control in regulating money supply‚ and managing exchange rate. Costs include that higher chance of the economy blowing up in a costly currency collapse (Goldstein‚ 2002‚ p. 3)
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How is China’s exchange rate policy linked to its development strategy? How would changes in exchange rate policy impact growth in China as well as the rest of the world? Is the current exchange rate policy sustainable in the long run? China’s Policy is to attain a sustainable growth‚ by integrating more and more with world economy or in other words to become a rich economy‚ while generating employment to cater the growing workforce surplus in the country. It the current economic scenario exports
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business with and “against” China? Since July 21‚ 2005‚ China has adopted a managed floating rate regime based on market supply and demand with reference to a basket of undisclosed currency. The daily trading price of the U.S. dollar against RMB in the foreign exchange market will be allowed to float within a band of +/->0.3% around the central parity published by People’s Bank of China. The signal was initially interpreted by the international market as an indication that China would embark on a gradual
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China: To Float or Not To Float? International Finance Executive Summary On July 21‚ 2005‚ China revalued its decade-long quasi-fixed exchange rate of approximately 8.28 yuan per U.S. dollar by 2.1% to 8.11. Simultaneously‚ the People’s Bank of China announced that the daily trading band of 0.3% against the dollar would be maintained. Many analysts and economists believed that the real trade-weighted value of the renminbi was undervalued by up to 30% to 35%. Companies that produce in
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undergoing significant reform in order to rein in the high cost of delivering health care services. Managed care has become a cornerstone of this process (Strickland‚ 1995). The case management industry (with its focus on cost containment‚ managed competition‚ and quality care) is playing an increasingly important role in the managed care environment (Owens‚ 1996). According to Mullahy (1995a)‚ the number of case managers has risen astronomically in recent years. These individuals come from diverse professional
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The song ”Float On” by Modest Mouse has changed how I feel about my surroundings. It made me realize that I am just one small part in a bigger world. The piece begins with the line‚ “I backed my car into a cop car the other day. Well he just drove off sometimes life’s okay”. This line uses the listener’s previous knowledge of how cops react to accidents to show how sometimes people can surprise you. When people do the unexpected they can change your life for the better. It’s actually my favorite
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China Case Study 1 trading with china in 2007 container ship Emma Maersk brought 11‚000 containers to the UK for the Christmas market this delivered 45000tons of consumer goods from china & is the latest stage in switching manufacturing from Europe to USA and china in 2006 Felixstone port in Suffolk reported an increase of 16% in Chinese imports‚ since 1980 30% increase‚ importing £22.8billion worth of goods in 2009 China’s growth in manufacturing means Europe consumers can purchase cheaper goods
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