...Metallurgical company of China is going to produce in the town of Alpha. A small town in Australia that has only 400 residents including one part taxi driver, one fireman, and one policeman. But during the next few years the population of this town can increase up to 2,000 residents, thanks to a $US 7.5 investment by an Australian exploration firm company and a metallurgical corporation of China (“Dependence on China” Para 1”). According to the article it is very difficult to contradict that the Chinese impact in the world economy is tremendous, as it will account for a fifth of world growth this year, as it accounted for 49% of the consumption in 2009, as this year is going to sell more cell phones in its market that the Europe, Americas, and Africa together (“Dependence on China” Para 2”). The impact of the Chinese economy in small and big centers is really big. According to the authors of the article “China will make a sizeable contribution to world growth this year”, but they also set a really interesting question about whether China can make an important contribution to the rest of the world’s growth (“Dependence on China” Para 2”). China is the biggest market for exports for countries such as Japan (18.9%), South Africa (10.3%), Brazil (12.5%), and Australia (21.8%); however, the number that exports to China represent in GDP is small. In the best case, it represents only 3.4% of GDP in Australia (“Dependence on China” Para 7”). As state in the Economist Magazine most of countries...
Words: 1289 - Pages: 6
...respect to foreign operations. B. At the other extreme it encompasses the study of the various functional areas of accounting in all countries of the world, as well as the activities of a number of supranational organizations. C. This book provides an overview of the broadly defined area of international accounting, with a focus on the accounting issues encountered by multinational companies engaged in international trade and invested in foreign operations. II. There are several accounting issues encountered by companies involved in international trade. A. One issue is the accounting for foreign currency-denominated export sales and import purchases. An important issue is how to account for changes in the value of the foreign currency-denominated account receivable (payable) that occur as exchange rates fluctuate. B. A related issue is the accounting for derivative financial instruments, such as forward contracts and foreign currency options, used to hedge the foreign exchange risk associated with foreign currency transactions. III. There is an even greater number of accounting issues encountered by companies that have made a direct investment in a foreign operation. These issues primarily result from the fact that GAAP, tax laws, and other regulations differ across countries. A. Figuring out how to make sense of the financial statements of a foreign acquisition target prepared in accordance with an unfamiliar GAAP when making a foreign direct investment decision...
Words: 3578 - Pages: 15
...respect to foreign operations. B. At the other extreme it encompasses the study of the various functional areas of accounting in all countries of the world, as well as the activities of a number of supranational organizations. C. This book provides an overview of the broadly defined area of international accounting, with a focus on the accounting issues encountered by multinational companies engaged in international trade and invested in foreign operations. II. There are several accounting issues encountered by companies involved in international trade. A. One issue is the accounting for foreign currency-denominated export sales and import purchases. An important issue is how to account for changes in the value of the foreign currency-denominated account receivable (payable) that occur as exchange rates fluctuate. B. A related issue is the accounting for derivative financial instruments, such as forward contracts and foreign currency options, used to hedge the foreign exchange risk associated with foreign currency transactions. III. There is an even greater number of accounting issues encountered by companies that have made a direct investment in a foreign operation. These issues primarily result from the fact that GAAP, tax laws, and other regulations differ across countries. A. Figuring out how to make sense of the financial statements of a foreign acquisition target prepared in accordance with an unfamiliar GAAP when making a foreign direct investment decision...
Words: 3578 - Pages: 15
................................................................................... 7 2.1 Bilateral Trade between Australia and China .............................................................................. 7 2.2 South Australian Trade with China .............................................................................................. 8 2.2.1 Disaggregated Analysis of South Australian Trade with China ........................................... 8 2.2.2 South Australia’s trade and comparative advantage ........................................................... 9 2.2.2.1 South Australia’s Revealed Comparative Advantage in comparison to other States and Territories .......................................................................................................................................... 12 2.2.2.2 2.2.2.3 Disaggregated Analysis of Key Agricultural Products ....................................................... 18 2.2.2.4 Possible Impacts of ChAFTA Commitments on Agriculture for South Australia ............... 20 2.2.2.5 3 Disaggregated Analysis of Key Non-agricultural Goods ................................................... 14 Wine Sector ....................................................................................................................... 22 Trade in Services and Investment .................................................................................................... 23 3.1...
Words: 65041 - Pages: 261
...Australian commentators claim that Australia is at a cross roads, and that it is unprecedented that its largest trading partner is not its closest ally.[1] In fact, its major ally and largest trading partner are engaged in a Cold War power struggle. They go on to say that solving this ‘unprecedented’ situation is Australia’s greatest foreign policy conundrum for at least the next decade.[2] However, Australia’s situation is not unique, neither in the region nor in its own history. By considering the recent positions of the major political parties this essay will examine Australian and Chinese foreign policy in relation to the importance of the Australian-Chinese relationship and whether we need to choose between China and America. Lastly, I shall recommend strategies for the Australian government to implement regarding its China policy. The overarching foreign policy aim for both the ALP and Coalition is serving Australia’s national interest, which can be broadly broken down into four main goals: maintaining the territorial integrity of Australia, including the safety and security of its society and economy; ensuring regional stability and preserving the existing regional balance of power; the sea lanes that make up the arteries of international trade remain open; and responding to new security threats.[3] Included in the last goal are terrorism, international crime, unregulated population movement, and quarantine. The ALP’s foreign policy has a history of multilateral...
Words: 3038 - Pages: 13
...companies involved the deal may not be welcomed by either the parties involved but when they both work towards it the realization of the agreement it becomes easy. It is also beneficial to both the countries because it enables the citizens to move freely for the betterment of the economy (Baykitch and Sladojevic 2015). China – Australia Free Trade Agreement An example of FTA agreement is the recent china-Australian agreement. The FTA agreement is considered to be beneficial to Australia in very many ways. Ball says that given that China has a population of above 13 million it opens the market for the Australian products. China is also the second-largest economy in the world's considering that is also an important manufacturing hub for the world products. It was important for the Australia to form free trade agreement because of various factors. China is the largest trading partner to Australia (Ganz 2015). It is also a fact that the merchandise trade between Australia and China has grown tremendously with a significantly notable 18 percent increase every year for the last decade. The another major factor is the fact that over the years the investment...
Words: 2097 - Pages: 9
...government should ensure appropriate policies are in place to facilitate the management of risk in regards to this volatility. Seeing as how the price of iron ore has fallen by more than what the government expected at the time of the May budget, there is a need to look at the budget again as this may hinder any planned spending due to predicted government investment and income. With the Australian mining industry being held at such a high standard from the rest of the world, there is a need for Australia to retain as much revenue as possible. With the super-sized profits being reeled in by resource companies operating in Australia, it is up to the Australian Government and the implementation of the mining tax, as this would reduce the damage being felt by the exports industries such as manufacturing and tourism which has suffered due to the increased Australian Dollar (Jessica Irvine 2010). Other implications seen by the Government include a potential volatility in the relationship between the Australian Government and the Chinese Government due to a reduction in the imports of iron ore and other natural resources from Australia to China as well as the Government having to strongly stay on top of resource nationalism. Resource nationalism is still ranked no. 1 top strategic business risk in the global mining and metal sector (Ernst & Young 2012), this is due to uncertainty and destruction of value caused by sudden changes in policy by the governments of...
Words: 2054 - Pages: 9
...Trends in Foreign Direct Investment Inflows This article briefly examines recent trends in foreign direct investment in Australia, both in the context of the longer-term perspective and relative to the experience of other countries. It also discusses the role of foreign direct investment within Australia’s overall investment requirements, and outlines characteristics of foreign direct investment in relation to sector and type of asset acquired. Overall Investment Trends Business investment growth has strengthened since the early 1990s recession, with the result that in constant price terms investment as a share of Gross Domestic Product (GDP) reached a record level in 1996-97. Surveyed business intentions and continuing favourable economic fundamentals point to ongoing strong growth in the period ahead. As a result, capital stock growth in recent years has recovered to above average rates, and is forecast to continue to strengthen. Coupled with improvements in the efficiency with which the capital stock is used, this strong growth in the capital stock provides the foundation for sustained strong growth in activity and employment. Australia accesses foreign saving through either borrowing (debt) or greater foreign ownership of Australian activities (equity). Foreign direct investment (FDI) is one form of the latter. For official measurement purposes, FDI is regarded as an equity interest of 10 per cent or more in an enterprise. A direct comparison of trends in FDI and capital...
Words: 1967 - Pages: 8
...critical issues in the ever-changing business world since the early 1980s. Huge amounts of foreign investment poured into China during this period primarily because of China's huge market, plentiful cheap labor, and rapid economic development (Davies, 1998; Luo, 1998; Shi, 1998; Sun & Tipton, 1998; Wang & Ralston, 1995). From 1980 to 1988, the number of foreign-joint ventures approved in China increased from 348 to 15,955, and the amount of foreign capital pledged increased from $1.7 million to $28.2 million (Pomfret, 1991). The foreign investment in China totaled $27.5 in 1993 and that amount rose to $37.5 billion by 1995. At present, there are over 318,000 foreign funded companies in China with the total amount of realized foreign investment from 1978 to 1998 totaling $250 billion (Shi, 1998). While the interest in investing in China is worldwide, two major investors are the U.S and Taiwan (Pomfret, 1991; Shi, 1998; Sun & Tipton, 1998; Walker, 1996; Wang & Ralston, 1995;). What is also interesting to note is that while almost all U.S. companies investing in China are large multinational corporat ions, many of the investors from Taiwan are small and medium-sized companies (Business Week , March 29, 1993; Wang and Ralston, 1995; Xu, 1996). U.S. small and medium-sized businesses seem uncertain about investing in China or, more likely, they are uncertain about how to invest in China. Is the Chinese market profitable or just a peril? This is a question that the Washington Post found...
Words: 9405 - Pages: 38
...Chinese Yuan Bilateral Currency Swap Agreements. Nowadays internationalization of renminbi rises as many counties try to lessen their dependence on U.S. dollar. P.B.O.C. uses different instruments to drive expansion of RMB, weakening the U.S. dollar monopoly in the basket of the world reserve currencies. By 2013, the RMB is the 8th most traded currency in the world. On 17 August 2010, PBoC issued policy to allow Central Bank, RMB offshore Clearing Banks and offshore Participating Bank to invest the excess RMB in debt securities, in onshore Inter-bank Bond Market. In October, China further open up both FDI and ODI in RMB (Pilot RMB Settlement of Outward Direct Investment) and nominated Xinjiang as the first pilot province (which in early 2011 expanded to 20 pilot areas). In June 2013, United Kingdom became the first G-7 country to set up an official currency swap line with China. As of July 2014, 25 countries have signed the RMB Bilteral Swap Ageeement with PBoC with total facilities of over ¥2.7 trillion. These agreements tell us that China decided to increase the role of RMB in the world currency market. 2007: Creation of Dim Sum bonds and offshore RMB bond market The dim sum bond market generally refers to RMB-denominated bonds issued in Hong Kong. The majority of dim sum bond are denominated in CNH, but some are linked to CNY (but paid in USD). In July 2007, dim sum bonds worth a total of US$657 million were issued for the first time by China Development Bank. These financial...
Words: 4016 - Pages: 17
...International Marketing Marketing Wine in the Chinese Market Executive Summary China’s demand for Western wine has rapidly increased. This has created a market opportunity for high end, quality wine companies from Australia to export their products to China. The product that will be focused on is Glandore Wine from the Hunter Valley. The report will focus on exporting this product into the Chinese market. There should be a strong focus on building brand reputation and maintaining long-term business relationships. There are multiple entry types into foreign markets yet Chinese regulations limit the mode of entry. The recommended mode of entry for Glandore wines is a Joint Venture. The decision between product standardisation and customisation is an important aspect of strategic decision-making. It is recommended that Glandore does not customise their core product of wine, however it is recommended that other product attributes are customised to appeal to the Chinese market. When promoting Glandore wine in the Chinese market there should be use of advertising, public relations, sales promotion and personal selling. Table of Contents Executive Summary ……………………………..…. 2 1. Introduction ………………………………………………... 4 2. 2.1 Market Entry………………………………………………4 2.2 Recommendations ………………………………………5 3. 3.1 Product Standardisation and Customisation ……..…..7 3.2 Recommendations…………………………………….….7 4. Promotion in China 4.1 Push Strategies………………………………………...
Words: 3549 - Pages: 15
...Foreign 99 Chapter III Direct investment by China in Latin America and the Caribbean A. Introduction Since 2008, China has become one of the world’s largest sources of direct investment. These flows first reached significant levels in Latin America in 2010, when it is estimated they surpassed US$ 15 billion. Chinese companies have in fact burst on the scene in the region so recently that several of the biggest projects were still being finalized in early 2011, or had only just been put into operation. Most investments have been made in natural resource extraction, but over the medium term this is expected to diversify into other sectors such as manufacturing and infrastructure construction. Paradoxically, there is a lack of data on this extremely important phenomenon, which poses a constant problem for policymakers and analysts studying Chinese foreign direct investment (FDI). Appraisals of the possible opportunities and challenges presented by this increased investment flow therefore tend to lack supporting empirical evidence. The aim of this chapter is to make some progress on this issue, at least as far as investment in the region is concerned. A variety of sources have been consulted, including investment announcements in the media and interviews with Chinese company managers and Latin American and Caribbean government authorities. Despite the evident limitations of this kind of material in terms of data quality and reliability, this course of action does provide...
Words: 20527 - Pages: 83
...Analysis of the Economy Export, Import and Production In recent years, Australia has been a net exporter of goods and net importers of services (See appendix 1). The country, rich in natural resources, is a major exporter of commodities. Iron-ore and gold account for 28% of total commodities exports (81 Billion US$ in 2013). Coal represent 18% or 38 Billion US$ and oil and gas for 9 percent. Manufactured goods constitute 33 percent of the total exports with food and metal products and machinery and equipment accounting. Agricultural products, particularly wheat and wool make up 5 percent of trade outflows Australia is a major importer of machinery and transport equipment, computers and office machines and telecommunication. Main import partners are China (15 percent of total imports), United States (13 percent of total imports), Japan (8 percent of total imports) and Singapore (7 percent of total imports). Trading Partners Trade with the Asia-Pacific region has become increasingly important for Australia. Of Australia's top sixteen major trading partners (representing around 80 per cent of merchandise exports); countries from the Asia-Pacific region are the destination for around 89 per cent of this trade. China is the most important trade partner of Australia, the country export Iron ore and gold as well as oil and many raw materials. China is also Australia’s largest source of imports. Major imports from China are mostly finished goods that include clothing, communications...
Words: 934 - Pages: 4
...credit rating in Chinese export Abstract In August 7th of 2011, the Standard & Poor’s, the rating agency, cut its sovereign credit rating for America by one notch, downgrade AAA to AA+. If China does not want to loss more money and decrease the risk, they have to decrease the foreign exchange reserve, so that some Chinese experts suggested decreasing the export. Because they believe that export will bring more and more foreign exchange reserve and export exists a number of problems. So this news event is a challenge of Chinese encouragement of export policy. But the other Chinese experts argue that we can not decrease the export, because China is a developing country which is mainly rely on export and we can not ignore that the export brings China a lot of opportunities. Though export is still exist a lot of problems, but we can use some theory to find the solution. The government can use the methods of increasing the domestic consumption spending to keep the growth of GDP and keep the employment rate. The government should encourage the residents to increase the consumption and enlarge the domestic demand. And government should encourage the export the advance proprietary technology products and restrict the export of low level technology products to eliminate the barriers of trade Introduction Nowadays, export plays an import role in the development of economic. General Administration of customs of the People’s Republic of China announced that Chinese trade surplus...
Words: 2195 - Pages: 9
...Why so Many Foreign Companies Want to Build Factories in China United Nations data of the total foreign direct investment in 2013 shows that China attracted $ 101 billion for continuing topped the list of developing countries. Why so many foreign companies want to build factories in China. I think it has three reasons to explain this question. I will use the example of Apple to show these three reasons. First of all, China as one of the cheap labor export base all over the world, attracting a large number of foreign companies to invest in production in China. American market investment company ConvergEx Group conducted a global minimum wage ranking in August 2013. From this ranking, Australia is $ 16.88 per hour topped the list. The United States is at an intermediate position. China is $ 0.8 per hour on the 17th in this list. The group is also based on the existing minimum wage, calculated that people in countries that are listed in the number of minutes of work to buy a Big Mac hamburger. Among them, the Chinese people need to work on average about 183 minutes to buy a Big Mac price of $ 2.61, which is located in the middle and lower purchase levels. The first decade of 1978 after China started economic reforms aimed at foreign direct investment in China's main business is to establish an export base in China. While this Chinese "reform and opening" initially helpful, but such investments often only have a very low value. For example, in 2009 a study found that, despite...
Words: 1755 - Pages: 8
