The Real Economy in the Long Run

The Real Economy in the Long Run

ECO/372

How China’s Financial System is Related to Key Macroeconomic Variables

The economic variables of a country, such as China, are constantly on display. Over the past year, China’s GDP growth has slowed considerably as economic activities have weakened, which includes growth in industrial production, investments, and imports (Prasad, 2016). Though we have seen the growth slow with these activities weakening, we have also seen the GDP growth seems to be more stabilized then in previous years. We have also seen a rise in foreign investments by Chinese households, corporations, and institutional investors, which have created big changes in the pattern of China’s overall exports (Prasad, 2016). China has wanted to move the foreign exchange holdings from the central banks to households and corporations. With foreign exchange being held by the people, rather than the central bank, there is a larger impact on the future capital outflows from China.

How Your Organization Can Reduce the Risk They Would Face in Relocating

There are many risks that organizations face when relocating and there are some things that really have to be taken into consideration when relocating. It is important to know that making the decision to relocate is not a random act, there are reasons for the relocation which usually come from studies completed to find the best place to maximize profits. Something to consider is that not all employees will be able to move with the organization. To minimize this risk, it is important to begin recruiting new employees well before the relocation takes place. Another thing that needs to be looked at is the customer base for the organization. It is important to try and keep the current customer base, if possible, while also expanding the customer base to one that is much larger. We should also make sure that we know and understand the taxes and regulations in China for the organization. By doing this, we are ensuring that we are making the best decision to relocate for the organization and that we fully understand the regulations and taxes that could be imposed upon us. Henricks, (2018), “While moving carries risks, a move can be one of the best things you do for your business”.

References:

Prasad, E. (2016). China’s economy and financial markets: Reforms and risks. Retrieved from https://www.brookings.edu/testimonies/chinas-economy-and-financial-markets-reforms-and-risks/

Henricks, M. (2018). How to Relocate Your Business. Retrieved from https://www.entrepreneur.com/article/81406