hollybuckingham9
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Can anybody tell me about the relative advantages and disadvantages of the ways in which businesses might operate in the Chinese market (e.g. exporting, joint ventures, mergers or setting up production or sales outlets)?
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El Salvador
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Do you mean mainland China or others like Hong Kong or Taiwan?
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Double Agent
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Thats a little vague OP
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cambio wechsel
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(Original post by Double Agent)
Thats a little vague OP
In fairness, she can only work with the essay title she's set.
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El Salvador
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(Original post by cambio wechsel)
In fairness, she can only work with the essay title she's set.
Could've been a better title.
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Rakas21
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Corruption, fraud and false accounting are major disadvantages as may rising wages be eventually as manufacturing begins to be outsourced.

High consumption growth is a major advantage.
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El Salvador
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(Original post by Rakas21)
Corruption, fraud and false accounting are major disadvantages as may rising wages be eventually as manufacturing begins to be outsourced.

High consumption growth is a major advantage.
Could actually be an advantage as you don't need to pay tax nor do you need to follow regulations or laws.
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gr8wizard10
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China artificially devaluing their currency.. like a boss!
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El Salvador
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(Original post by Abdul-Karim)
China artificially devaluing their currency.. like a boss!
Currencies are all artificial, even more so with their rates.
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gr8wizard10
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(Original post by clh_hilary)
Currencies are all artificial, even more so with their rates.
But they have value, be it fiduciary. The global economic system currently stands due to the value at which people believe said currencies have. It can be argued that most transactions in the financial markets have no intrinsic worth, regardless. People still trade currencies because it's part of the developments in the modern world. So a devaluation of China's currency has huge economic impacts and is very much real, despite exchange rates being an interpretation of value.
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El Salvador
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(Original post by Abdul-Karim)
But they have value, be it fiduciary. The global economic system currently stands due to the value at which people believe said currencies have. It can be argued that most transactions in the financial markets have no intrinsic worth, regardless. People still trade currencies because it's part of the developments in the modern world. So a devaluation of China's currency has huge economic impacts and is very much real, despite exchange rates being an interpretation of value.
Actually in reality the 'holder' of those currencies sell them according to whatever price they want. The rates are only determined by the people who are willing to buy those currencies at a certain rate. So if for example, I have some YMB, I can set the rate at £1 or £1000; and in actuality that's also how anyone gets their currency exchanged, only on a larger scale.
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gr8wizard10
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(Original post by clh_hilary)
Actually in reality the 'holder' of those currencies sell them according to whatever price they want. The rates are only determined by the people who are willing to buy those currencies at a certain rate. So if for example, I have some YMB, I can set the rate at £1 or £1000; and in actuality that's also how anyone gets their currency exchanged, only on a larger scale.
You go try and sell GBP/USD at £0.10 per $1 and see how far that gets you. They don't sell them at whatever price they want, prices are determined by the free-market. A floating exchange rate will determine a currencies value depending on how many people are supplying that currency in contrast to demand.
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El Salvador
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(Original post by Abdul-Karim)
You go try and sell GBP/USD at £0.10 per $1 and see how far that gets you. They don't sell them at whatever price they want, prices are determined by the free-market. A floating exchange rate will determine a currencies value depending on how many people are supplying that currency in contrast to demand.
It's only because in this case the currency has been determined by the Chinese government. The 'free market' is artificial, and the exchange of currencies is only about the individuals really. You never actually get your currency exchange at whatever 'real' price it is.
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gr8wizard10
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(Original post by clh_hilary)
It's only because in this case the currency has been determined by the Chinese government. The 'free market' is artificial, and the exchange of currencies is only about the individuals really. You never actually get your currency exchange at whatever 'real' price it is.
Not sure if serious. The Chinese currency's value is still determined by the free-market because currencies are based on a floating exchange rate. They simply sell their reserves and increase the supply of their domestic currency against the US to push down its value. The free-market is the real price. It's the price that a currency is worth according to the laws of supply & demand. It cannot get any 'realer' than that. That price at which a currency is exchanged reflects the collective perception people in the market put on particular currency pairs.
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El Salvador
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(Original post by Abdul-Karim)
Not sure if serious. The Chinese currency's value is still determined by the free-market because currencies are based on a floating exchange rate. They simply sell their reserves and increase the supply of their domestic currency against the US to push down its value. The free-market is the real price. It's the price that a currency is worth according to the laws of supply & demand. It cannot get any 'realer' than that. That price at which a currency is exchanged reflects the collective perception people in the market put on particular currency pairs.
Then first of all, what they do is no different from a bank trying to cash in with currencies. And secondly, there isn't one free market 'price'. It's always prices, because you are actually trading with a specific seller/buyer, not just a machine.
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natninja
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Inverted labour pyramid due to one child policy - will potentially cause future problems due to an ageing population and declining workforce.
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gr8wizard10
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(Original post by clh_hilary)
Then first of all, what they do is no different from a bank trying to cash in with currencies. And secondly, there isn't one free market 'price'. It's always prices, because you are actually trading with a specific seller/buyer, not just a machine.
Otherwise known as the currency spread which in itself is very minimal.

Such like the market price of a canned soft-drink in greater London is ~£0.60 so it's sometimes sold for £0.50 - £0.55 - £0.80 etc... You'd never find it successfully being sold at the level the market demands it for £1,000/ea.
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GnomeMage
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(Original post by Abdul-Karim)
But they have value, be it fiduciary. The global economic system currently stands due to the value at which people believe said currencies have. It can be argued that most transactions in the financial markets have no intrinsic worth, regardless. People still trade currencies because it's part of the developments in the modern world. So a devaluation of China's currency has huge economic impacts and is very much real, despite exchange rates being an interpretation of value.
so..? who doesnt? the USA prints money like nobody's business and causes inflation just to pay off debt with currency with lower value. talk about responsibility. talk about currency manipulation.

oh and dont forget they outsourced the financial crisis back then.
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El Salvador
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(Original post by Abdul-Karim)
Otherwise known as the currency spread which in itself is very minimal.

Such like the market price of a canned soft-drink in greater London is ~£0.60 so it's sometimes sold for £0.50 - £0.55 - £0.80 etc... You'd never find it successfully being sold at the level the market demands it for £1,000/ea.
And where did those prices come from? That's right, the soft drinks companies.
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gr8wizard10
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(Original post by clh_hilary)
And where did those prices come from? That's right, the soft drinks companies.
The free-market still decided the average price at which the drinks can be realistically sold for derived from the signalling function, where firms would initially research which price range the drinks can be sold for and still demanded. Also due to soft-drinks being in a competitive market they are price-takers and would sell close to the free-market equilibrium in threat of competition.
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