If you invest $20 million in China Research Paper

If you invest $20 meg in China - Research Paper ExampleThe economys growth potential thus identifies room for more investment fundss and capitalizing $ 20 million dollars is non likely to stretch the economys resources (Oecd 33). Another signifi chiffoniert macroeconomic indicator for determining investment decision in a country is the trend in lump rate. Inflation defines a steady and signifi masst rise in commodity prices. It can similarly be defined as a continuous falloff in the value of money in an economy. Inflation would therefore induce a loss in invested money because the investments value will be lower than the original one and even derived profits might not be able to compensate for the loss from inflation. Inflation trends in China however offer a good indicator because it has conveyed a decreasing trend. The inflation rate was for example reported at 6.9 in the year 2004 and the value had steadily decreased to 2.5 by the year 2008. The steady trend further projects mettlesome probability of lower inflation rates in future and this means that an invested amount in the economy is not likely to lose its value. The trend that can be forecasted to persist further shows that an investment in China has high chances of gaining value as the countrys inflation rate continue to decrease (Oecd 33). A review of the past trend of Chinas consumer price index also offers a basis for determining prospects of spend the $ 20 million in the economy. The macroeconomic indicator defines percentage change in a group of commodities weighted prices and is related to inflation. A fall in consumer price index, as represented by the Chinese economy therefore implies economic stability and improving moneys value with time. The index was for example reported at about four in the year 2004 and... Business organizations ar established with the prime objective of making profit through entrepreneurial ventures that may cite diversified economic risk. It is therefore necess ary to analyze economic environment around a business in order to understand its possible risks and benefits beforehand deciding on establishing a business. Making decisions over which economy to invest in may require analysis of microeconomic and macroeconomic factors of economies of interest for paygrade and comparison of involved risks and benefits. Similarly, an investor who has focused on one economy needs to evaluate the economys factors before establishing a venture. In this paper, the potential and risks of investing $ 20 million in China are investigated, based on the countrys macro and microeconomic indicators. The countrys major challenges are however its banking system that is strictly regulated by the government and its currency that does not reflect real value against other currencies. The governments pattern may hinder delivery of quality and unbiased banking services and may allow for government secure on investments. Trends in Chinas macroeconomic indicators ide ntify investment potential in the economy that indicates high probability of further expansion and favorable economic factors. The increasing real gross house servant product, decreasing inflation rate, and falling consumer price index indicates the economys trend of increasing stability that is safe for investments. Even though government control over banks and the countrys currency are threats to investment in China, the identifiable potentials are more significant.