...command to the president. The United States is second on the list countries with the most active military personnel with 1,429,000. China’s military is called the People’s Liberation Army and are the world’s largest military force with 2,285,000 active personnel. The People’s Liberation Army makes up 18% of China’s population. The PLA has five main branches, the PLA ground Force, PLA Navy, PLA Air Force, PLA Secondary Artillery Corps, and the PLA Reserve Force. The PLA is under the command of the Central Military Commission. The CMC is made up of an eleven-man commission that is responsible for all maters regarding the PLA. All members of the CMC are high-ranking generals or senior members of China’s Armed Forces. The Russian military is called the Armed Forces of the Russian Federation. The number of active troops that Russia’s Armed Forces has is 1,040,000 ranking them fifth on the list of most active personnel. The Commander-in-Chief of the Armed Forces of the Russian Federation is the President of Russia. Under the President the Ministry of Defense over see’s the day-to-day operations of the Russian Armed Forces. The United States, China, and Russia are very different from one another culturally and politically, but they all share a common goal of striving to become the world’s powerhouse, this is reflected in the expenditures of their defense budgets. The United States is not the largest military force in the world but they top the...
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...closely. And India's calculations reflected this. India has over 13.25 lakh active military personnel compared with China's 22.55 lakh troops. China's Air Force has 9,000 aircrafts with 2000 fighter planes. The Indian Air Force has 3,000 airplanes with 790 fighter planes. China's combat power is guaranteed through its fleet of Russian Sukohi-30 MKK and indigenously built J-10 fighters. The Indian Air Force, on the other hand, has French built-Dassault Mirage 2000s and Russian Sukohi-30 MKI as the best aircrafts in its combat fleet. No indigenous fighters or aircrafts have been deployed by India so far. The Indian Navy is the world's eighth largest navy with a with a fleet of 145 vessels consisting of missile-capable warships, advanced submarines, the latest naval aircrafts, and an aircraft carrier in its inventory. It is experienced both in combat and rescue operations during wartime and peace, as seen from its wars with Pakistan in 1971, and the Tsunami that struck in December 2004. In comparison, China's Navy with its fleet of 284 vessels is quantitatively larger but lacking in actual war experience, which could undermine its strategic capability. China currently has no aircraft carriers in its naval fleet but is slated to build and induct an aircraft carrier by 2010. In strategic nuclear defence and delivery systems, China's army is miles ahead of India's nuclear forces with 200-400 active nuclear warheads. In comparison, India's strategic nuclear...
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...------------------------------------------------- The US Fiscal Outlook & China’s Role in the US Treasury Market ------------------------------------------------- -Fixed income project key words FISCAL, DEBT CEILING, TREASURY, THE FED, CHINA Written by Gong Li 1155019071 Jiang Peng 1155038183 Yang Mengdi 1155020855 Zhang Yiwen 1155010794 Zheng Qianfei 1155038175 Written by Gong Li 1155019071 Jiang Peng 1155038183 Yang Mengdi 1155020855 Zhang Yiwen 1155010794 Zheng Qianfei 1155038175 CONTENT Executive Summary 1 1, The US Fiscal Outlook 3 -Recent and historical fiscal outlook 3 -The US debt ceiling and recent crises 4 -Financial cliff (2013) and its impacts to the US economy 5 -The US fiscal future 6 2, Fiscal Situation and Treasury Market 9 -The role of US department of the treasury 9 -The role of the Federal Reserve 9 -The US treasury market 10 -The Fed, the interest rates, the QE and the taper 12 -The prediction of the future interest rate 13 -Summary 14 3, China’s involvement in the US Treasury market 15 -China’s Ownership of US Treasury Securities 15 -Reasons of China’s preference for the US Treasuries 16 -The Symbiosis between China and the US in Terms of US Public Debt Holdings 18 -Our Suggestion on China’s Future Position in the US Treasury Market 20 References 22 Executive Summary The state and local governments continue to face fiscal challenges in the short- to medium-term term. According to the Government Accountability...
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...Understanding China’s Political System The Chinese Communist Party (CCP or Party) has been in power in China for more than six decades, a record of longevity that rivals and could one day surpass that of the Communist Party of the Soviet Union.2 The CCP assumed power in 1949 by means of a civil war victory over the forces of Chiang Kai-shek’s Nationalists, who moved the seat of their Republic of China government to the island of Taiwan. The Communists named their new regime the People’s Republic of China (PRC). Although the CCP has been continually in power since, China’s political institutions and political culture have evolved significantly over those decades, with the CCP’s willingness to adapt helping to explain why it has, so far at least, avoided the fate of its sister parties in the Soviet Union and Eastern Europe. Today, although the Party is committed to maintaining a permanent monopoly on power and is intolerant of those who question its right to rule, analysts consider the political system to be neither monolithic nor rigidly hierarchical. Jockeying among leaders and institutions representing different sets of interests is common at every level of the system. Sometimes fierce competition exists among the members of the Communist Party’s nine-man Politburo Standing Committee and 25-member Politburo, China’s highest decision-making bodies. It also exists among ministries; between ministries and provincial governments, which are equals in bureaucratic...
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...overseas by Chinese companies in non-financial sectors totaled $59 billion. The country's per capita GDP is $7,518 in 2010. The provinces in the coastal regions of China tend to be more industrialized, while regions in the hinterland are less developed. As China's economic importance has grown, so has attention to the structure and health of that economy. In the modern era, China's influence in the world economy was minimal until the late 1980s. At that time, economic reforms initiated after 1978 began to generate significant and steady growth in investment, consumption and standards of living. China now participates extensively in the world market and private sector companies play a major role in the economy. Since 1978 hundreds of millions have been lifted out of poverty: According to China's official statistics, the poverty rate fell from 53% in 1981 to 2.5% in 2005. However, in 2006, 10.8% of people still lived on less than $1 a day (purchasing power parity-adjusted). The infant mortality rate fell by 39.5% between 1990 and 2005, and maternal mortality by 41.1%. Access to telephones during the period rose more than 94-fold, to 57.1%. In the 1949 revolution, China's economic system was officially made into a communist system. Since the wide-ranging reforms of the 1980s and afterwards, many scholars assert that China can be defined as one of the leading...
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...Foreign Subsidiary Investment Plan Case: Multinational Capital Budgeting China & Australia Hypothetical Incorporated MBA AF 626 Fall 2011 International Financial Management Professor XX XX XX XX XX Table of Contents PART I – Analysis: Australia vs. China A. Country Analysis 1. Economic Environment 3 2. Social Environment 10 3. Political Environment 12 B. Industry Analysis 1. Aluminum Industry in Australia 17 2. Airline Industry in China 18 PART II-Capital Budget Analysis 1. Weighted Average Cost of Capital 19 2. Net Present Value 20 3. Scenario Analysis 21 PART III – Conclusion: Investment Decision 23 References 24 Appendixes 26 PART I – Analysis: Australia vs. China A. Country Analysis I. Economic Environment Australia Australia is a market oriented financial system which includes the world’s 13th largest economy and the 9th highest per capita Gross Domestic Product (GDP), with almost two consecutive decades of growth and the unemployment rate falling to a generational low. As a result of nearly three decades of structural and policy reforms, Australian’s economy has proven to be a competitive player in the increasingly integrated global markets. In terms of country risk, Australia’s favorable attitude towards private enterprise and its well-protected property rights...
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...datWorld Bank Office, Beijing www.worldbank.org.cn www.worldbank.org/china CHINA QUARTERLY UPDATE SUSTAINING GROWTH April 2012 The China Quarterly Update reviews recent economic developments in China, updates the economic outlook and lays out key policy challenges. This issue was produced by Philip Schellekens (task team leader) and Xiaoli Wan, in collaboration with Xiaofan Liu, Philip O’Keefe, Dewen Wang and Min Zhao, and under the overall guidance of Klaus Rohland, Sudhir Shetty, Bert Hofman and Ardo Hansson. Comments are gratefully acknowledged from country economists in the East Asia and Pacific Poverty Reduction and Economic Management Unit. The team would also like to thank Jianqing Chen, Tianshu Chen, Li Li, Li Ouyang and Yan Wang for support in the production and dissemination of this report. The findings, interpretations, and conclusions expressed in this report do not necessarily reflect the views of the Executive Directors of the World Bank or governments they represent. This report takes into account information available up to end of March 2012. Questions and feedback can be addressed to Philip Schellekens (pschellekens@worldbank.org). EXECUTIVE SUMMARY RECENT ECONOMIC DEVELOPMENTS The Chinese economy is in the midst of a gradual slowdown. A weaker global economic environment and tighter domestic policies combined to slow GDP growth from 10.4 percent in 2010 to 9.2 percent in 2011. Slow growth in the Euro area and sluggish recovery in the US limited...
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...relinquish their position as hegemon. The perceived threat of a rising China; especially when there are several publications of books, articles and anti-China bashing blogs that helps to exacerbate these fears. China’s increase in soft power and hard power does not mean it is a threat to the global security; China’s development and their economic growth relies on peaceful relations with the West because China needs access to their domestic markets. The main reason why China is considered to be a threat to the West is because they cannot maintain their domination on the world stage, and has to make room for developing nations like the BRICS countries (Brazil, Russia, India, China and South Africa). Yet China simply wants to develop and increase the living standards of its people, and no desire of aggressive military actions. Thus, the foundation of why China is still been seen as a threat will be explored but the conception will be dismissed because as a growing superpower these steps are logical and any country that is in the same situation as China now will simply follow the same road. The following paper will examine different viewpoints regarding if the China threat theory is feasible or not; in order to come to the above conclusion. The United States perspective on China’s military progress Based on the information stated in the United States Department of Defense report (2011) it represent as though China is a possible threat especially if it...
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...IMPACT OF CHINA’S EXPANSION IN EVERY SPHERE ON UNITED STATES OF AMERCA Introduction The concept of striving for hegemonic state is not a new concept or term to us; rather this notion has kept repeating itself throughout the record. In today’s practical world, great powers are searching extensively and aggressively for opportunities to attain power over others, with hegemony being their ultimate goal. In present realistic and anarchic world system, power is all that matters to selfish and domination oriented states. In a very similar way, China, which has been making success by leaps and bounds, is in time aiming to gain the position of super power, the position which in the present day is being enjoyed and exercised by the United States of America. With around 1.3billion population; estimating for one-fifth of the world’s entire population, with world’s largest armed forces, China, while contributing about 13percent to the world economy, is at present the fastest developing country across the sphere, with raw potentials to becoming a super power down the line. (China: The 21st Century Super Power, September, 2005) China, for past few decades, has been observed making substantial progress in almost every sphere, not only with an aim to improve its international front, but also to maximize its share of international power and gain a position that is desired by a few of the known competing great powers. China has been implementing and devising a mix of very optimal agendas...
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...economic growth. Behind this scenario were couple essential factors: JETRO- japans external trade organization, MITI- ministry of international trade and Industry, after renamed to METI- Ministry of Economy Trade and Industry, Sogo-Shosho independent trading houses, Japan bank for international corporation, Institute of developing economies under METI and Ministry of Finance. MITI: Combining to two different sectors under single ministry already emphasizes how long oriented and strategic meaning it carries. The main engine of Japanese economy was industry that includes- machinery, high-tech, etc… And coming to trade it is also main accumulator of Japans GPD. Japans economy relies on export mostly. Japan in early 80-90 had huge gap of budget surplus. It exported much more than it imported and that imbalance between export and imports directly influenced US economy. Japan had and still has very exclusive channel distribution. Foreign companies cannot directly sell to japan. There are many informal barriers for foreign companies. More than that Japanese companies used predatory pricing strategy wherever they go. They set aggressive pricing strategy against competitors that couldn’t survive in market. In addition to these, Japanese yen until Plaza Accord were playing significant role against US dollar. Until late 80s and early 90s the recessionary effects of the strengthened yen in Japan's export-dependent economy created an incentive for the expansionary monetary policies that...
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...Indian and Chinese policies to tackle inflation Abstract: India and china the two Asian giant, have shown economic growth in last few decades. The expansion of the economy brought high inflation in both countries. Inflation impacts all types of the consumers while rich or poor, it will become a real problem if the countries didn’t adopt policies to decrease the inflation rate. India and china have a very fast economic growth with fast population. The government and the central bank have to work beside to curb the inflation using two main policies are monetary policy and fiscal policy. In the monetary policy the central bank has to manage the many supply in the market and also control and decline the inflation, in terms of fiscal policy the government try to see the tax level to impact in the inflation rate. Monetary policy has more effect than fiscal policy, but also there are challenges implementations of the policies. Argument 1(monetary policy) India has faced a hyperinflation in years 2009 to 2011 to unprecedented level. The inflation in India affects the saving of the Indian household which decreased the value of saving in that nation. The monetary authorities are trying to impact the money supply directly without creating deformation in the economy by changes CRR (cash reserve ratio), repo and reverse repo rate. The main objective is to maintain price stability. The RBI (reserve bank of India) trying to control the money supply by using which called contractionary...
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...Global Economic Perspectives Exam II Objective List BASIC CONCEPTS * Exchange Rate Risk * Selling dollar-denominated bonds but not having dollar-denominated sales * China’s real estate bubble * How to avoid: * Currency swaps * Future markets * Currency pegs * Setting the currency equal to a specified value * What factors determine exchange rates (pegging and managed floats) * High interest rates Appreciation & recession – increased demand & price * Stronger currency favors importers (trade surplus) * Low interest ratesDepreciation & Expansion * Weaker currency favors exporters (trade deficit) * The role of the IMF * Make emergency loans to countries with balance of payment problems * Ensures stability of national monetary system * Fiscal Policy * Government changing taxes and/or government spending in effort to increase or decrease business activity * Expansionary FP leads to increased spending but downside is budget deficits * Contractionary FPleads to budget surpluses or smaller deficits * AKA Austerity (attempt to shrink growing deficits) * Monetary Policy * Central Banks changing the MS to increase or decrease the availability of credit in an effort to increase or decrease business activity * Primary tool is Open Market Operations * Buying and Selling short...
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...China’s Foreign Exchange Management I. The history of China’s foreign exchange management system For a long time China has been implementing relatively strict foreign exchange administration system due to shortage of foreign exchange resources, insufficiency of macro control capability, imperfection of market system. Since China took on the innovative opening-up policy in 1978, China forms a foreign exchange administration profile--“RMB (Chinese Yuan) is convertible for current account items, while partially convertible for capital account ” step by step. China’s foreign exchange reform can be divided into three periods: Exchange regime during the planed economy (1949-1978). A highly centered, planning system was implemented in the planed economy environment. Bank of China was the only specialized bank involving in foreign exchange business. All foreign exchange receipts were obliged to surrender to the state, any purchase of foreign exchange should be included in the state plan. The nation never incurred foreign borrowings or allowed foreign direct investment. Exchange regime during the transitional period (1979-1993). (1) The State Administration of Foreign Exchange, which is authorized for charging foreign exchange control matters under the leadership of the People’s Bank of China, was established. (2) The enterprises were permitted to retain a portion of their foreign exchange earnings. (3) Foreign exchange swap center was set up and developed. (4) The RMB exchange...
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...Research Paper No. 2009/03 Source of Finance, Growth and Firm Size – Evidence from China Jun Du1 and Sourafel Girma2 January 2009 Abstract Using a comprehensive firm-level dataset spanning the period 1998-2005, this paper provides a thorough investigation of the relationship between firm size, total factor productivity growth and financial structure in China, controlling for the endogeneity of the latter. Generally, it finds financing source matters for firms of different size, and the extent to which financing source matters for firm growth is greater for small firms than big firms. Self-raised finance appears to be most effective in promoting small firms to grow, and bank loan seems to be more supportive to big firms. The relationship between size, finance and growth also depends on ownership. In addition, there exist strong complementarities between formal and informal finance, as well as between indigenous and foreign finance. Keywords: China, finance, firm size, growth JEL classification: O5, G2, L11, L25, O1 Copyright © UNU-WIDER 2009 1 Aston University, UK, e-mail: j.du@aston.ac.uk; 2 Nottingham University Business School, UK, e-mail: Sourafel.Girma@nottingham.ac.uk This study has been prepared within the UNU-WIDER project on Southern Engines of Global Growth, co-directed by Amelia U. Santos-Paulino and Guanghua Wan. UNU-WIDER gratefully acknowledges the financial contributions to the research programme by the governments of Denmark (Royal Ministry of Foreign...
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...China’s Global Business Plan Team Memners MGT/448 January 22, 2012 Professor China’s Global Business Plan In week five Team C has to prepare a final global business plan paper for the venture in China. The team first had to summarize the findings from the previous team assignments. After summarizing the team had to integrate the week five assignment with the work that had been turned in previously. The team paper for week five included the rationale the team used for choosing the target country. The team also had to determine the marketing mix that was specific to the selected global product and give an explanation why this mix was chosen. A marketing plan was prepared that addressed product modification, pricing, promotional programs, distribution channels, and e-business in the chosen country. The paper will include market indicators and trends for the product. A financial overview for the global venture will be given, which includes a chart for the general budget and an explanation of how the company will deal with the foreign exchange risk. The company will have to identify potential domestic and international sources for funding the venture, and the team will identify two possible financial institutions within the chosen region. In the paper a description of the degree at which the organization will operate as a centralized versus decentralized organization, and a chain of command chart will illustrate how information is passed from the field to senior management...
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