The Renminbi Challenge And The World Economy Finance Essay - Free Essay Example

Sample details Pages: 7 Words: 2091 Downloads: 2 Date added: 2017/06/26 Category Economics Essay Type Research paper Did you like this example? There has been much talk of the Internationalisation of the RMB and the recent currency war between the US and China with the US exerting pressure on China to appreciate its currency. Whilst the Chinese leaders are unlikely to yield to US pressure, they recognise that there is a need to gradually appreciate the currency to counter the risk of inflation and adjusting the Balance of Payments without damaging and destabilising Chinas export industries. China has come a long way in the last 3 decades and has become a key player on the international stage. Don’t waste time! Our writers will create an original "The Renminbi Challenge And The World Economy Finance Essay" essay for you Create order China is the second largest recipient of foreign direct investment (FDI), with inflows of $95 billion in 2009. It has overtaken Japan in the second quarter of 2010 as the worlds second largest economy and overtaken Germany as the worlds largest exporter. It holds the largest share of foreign exchange reserves (just under $2.5 trillion). However, it does not have a currency that reflects its prominent role and therefore recognises the need to move to a more flexible exchange rate regime and a fully convertible RMB. RMB is not fully convertible and is not a unit of account for exchange means in international transactions Despite its prominent role in the world economy, the RMB is not fully convertible, creating a mismatch on its international balance sheet between liabilities that are typically denominated in RMB. Chinas over-reliance on the Dollar can be associated with the risk of excessive exposure to liquidity shortage within the world economy and the consequent reduction of trade finance as experienced by the lesson learnt from 2007-2008 financial crisis. To use the RMB as a future means of payment in international trade transactions would reduce the impact of international financial market volatility on its economy. The Central Government will also face less pressure in the managing of its huge foreign exchange reserves. China has no past experience nor road map to pave a way to develop RMB as an international currency so its challenge is immense. China does not have a reserve currency with intrinsic value linking and convertibility to gold. The RMB can only be compared to the Dollar itsel f. China also faces another challenge if its currency is channelled into the hands of foreign holders. With its huge current account surplus, this is not going to be easy without further expanding the Dollar element on the asset side of the Central Banks balance sheet. Planning Currency Moves and paving the way to Internationalise the RMB RMB revalued its decade 8.28 exchange rate peg to USD on 21 July 2005 to 8.11 to reform the exchange rate regime to meet the needs of China and world financial markets and moved to a managed float. In July 2008, RMB was re-pegged to USD to help exporters cope with sliding demand triggered when the global financial crisis intensified. Striving to increase RMB flexibility, it abandoned the 23-month re-pegging to USD. The RMB has gradually appreciated to help curb inflation and assuage the demand of its trading partners. As consumer prices rose 4.4% MoM in Oct 2010, PBOC raised RMB rate 0.31% to 6.6242 on 11 Nov2010, the strongest increment since the peg was scrapped in July 2005. Beijing is relying on its market power to encourage foreign businesses, especially from its regional neighbouring countries, to use the RMB to settle its transactions with Chinese firms whilst building a RMB denominated asset offshore market in Hong Kong without prematurely opening the capital account and increasing the imbalance in its international balance sheet. Success will depend on a combination of well-designed, controlled policies and market forces with an objective for Shanghai to be developed as an international financial centre by 2020. Formation of the offshore RMB market Hong Kong is Chinas RMB offshore centre under the One Country, Two Systems which is needed to maintain the status quo on the capital account and to ensure that any possible negative impact of the experiment can be successfully walled off from the domestic market . Since 2004, daily permitted conversion of RMB 20,000 by HK residents has accumulated to approx RMB 80bn by the middle of this year, mainly made up of low yield deposits, remittances, exchange and credit card services driven largely by anticipated RMB appreciation. In May 2009, Chinas State Council granted approval to 2 foreign financial institutions registered in HK, namely HSBC and the Bank of East Asia, to issue RMB denominated bonds. In July 2010, offshore RMB market gained pace with the signing of the Supplementary Memorandum of Cooperation on the Expansion of the RMB Trade Settlement Scheme which enabled free circulation of the RMB outside the Mainland. In August 2010, China eased restrictions on foreign offshore Banks access to the interbank bond market to offer products with more favourable terms which attract even greater demand for the RMB offshore. Is the internationalization of the RMB feasible and realistic in the current environment? According to the HKEx Chief Executive Charles Li , the RMB is likely to evolve in 3 stages, namely gaining international acceptance in becoming a currency of trade (5-10 years), a currency of investment (10+ years) and ultimately a reserve currency (20+ years). Today, trade settlement in RMB has amounted to RMB 91.6 bn and is still growing rapidly despite current capital account and convertibility constraints. The issue is not whether the RMB will become an international trade currency but as to how fast this can be achieved with market consensus being that full convertibility of the RMB is just a matter of time and revaluation will be forthcoming in the interim. To become a reserve currency, the capital account also needs to be convertible. Further investment options need to be available for Investors to hedge their risk. Strategy of structural reforms and domestic consumption It is expected income distribution, healthcare, provision for public housing, other social services will be the main theme of Chinas 12th Five Year Plan. Following the last financial crisis, China is shifting from an export and fixed investment-led economy into consumption-oriented economy to remove the heavy reliance on export growth. Addressing huge income gap between wealthy urbanites and the poor farming communities is also on its agenda. Spending on Health Care will likely increase 7 fold between 2008-2018 with the constructing of 2,000 new county hospitals and other rural clinics. Other reforms will include building roads, new energy, equities and fixed assets. Central Government has promised to cut carbon dioxide emission per unit of GDP in 2020 by 40 to 45% from the 2005 levels. 80% of external funding for the Chinese economy comes from bank loans, it raises the need for funding source diversification through the Capital Market in Corporate loans and equities. Mainland insu rance and securities companies could be the biggest beneficiaries of these reforms. China will seek to maintain stability on macro, fiscal policy and monetary policy. RMB exchange rate should also maintain relative stability so that domestic manufacturers and exporters can better predict and adjust to the market. Any significant move on the RMB could see foreign money pouring into the country which will cause inflation. If revaluation is large, domestic companies face a risk of being priced out of the market and impact export growth leading to higher unemployment and social unrest. Chinese leaders appear to have concluded that RMB revaluation is a contingency. Given that a more flexible currency mechanism is forthcoming, Beijing needs to prepare its countrys financial system for possible shock effects from exchange reform and make effective the State enterprise. Business Opportunities for Financial Institutions like Credit Suisse The earliest beneficiaries of the RMBs Internationalization will be the Banks, Insurers and Asset Managers with their products offerings. Credit Suisse has strong Investment Banking, Asset Management and Private Banking capabilities and has positioned itself in recent years to take advantage of the reforms and huge growth in China. There will be a growing market in the acquisitions by Chinese state-owned enterprises in the coming years. Chinese Corporate, financial institutions and Government alike will require significant capital in the next 5 to 10 years and the sectors most likely to be in need of financing are financial services, infrastructure and natural resources. The last five years have seen spectacular IPOs in the Chinese market and this trend is likely to continue as long as the Chinese economic growth is maintained. Credit Suisse positions itself in China Credit Suisse is a market-leader in Investment Banking (including Corporate Banking), Asset Management and Private Banking and offers multi product suites, first class execution and distributions, trade settlements and capital market advisory services to our global clients. CS is increasing its business presence in China and has made numerous strategic market professional hires whilst additionally undertaking strategic joint ventures. Credit Suisse has entered into a joint venture in Aug 2010 with ICBC to form ICBC Credit Suisse Asset Management Co. It raised more than RMB 14 bn ($ 2.1 bn) in Chinas biggest bond fund ever called The ICBC Credit Suisse Double Profit Bond Fund. The fund invests in domestic Government debt, Corporate bonds, short term bills and RMB denominated Convertible Notes and is popular with investors sidestepping a weak stock market. Credit Suisse has also entered into a joint venture with Founder Securities Ltd, the first securities JV approved by the Ch inese regulators since new guidelines were put in place in December 2007. The JV was launched with less than 50 staff but has doubled its head count in less than one year with further plans for expansion, betting on a healthy pipeline to underwrite debt and equities offerings, IPOs and MAs in Chinas domestic market. For the nine months ending 30/9/10 Credit Suisse has been involved in 11 MAA deals with a total volume of US$10.443bn, a market share of 8.8% and an overall financial institutions ranking of 4th (Bloomberg). Credit Suisse Private Banking has increased its headcount hire of high calibre Private Bankers to take advantage of the rapidly rising number of affluent households. It is estimated that nearly 1 million Chinese households have financial assets exceeding US 1m. Chinas savings rate of appx 55% of GDP lacks competitive and efficient financial services for investments growth. China is the third-largest wealth generator in the world, with USD 16.5 trillion in total ho usehold wealth and is behind USs 54.6 trillion and Japans 21.0 trillion but could rise 111% to USD 35 trillion by 2015 overtaking Japan to become the second highest in the world if growth continues. Credit Suisse is looking to open new offices in China and will leverage further its dominance with good infrastructure and foundation to build up the Private Banking business, noting at the same time the challenges that come with it in terms of OECD tax treaty, cross-border restrictions and the hiring of experienced talent. As CEO, as much as there is huge growth opportunities for the Banks to increase our global presence in China to achieve bigger revenues for our shareholders, we must ensure that optimal service levels to our clients needs are maintained and to have a rigorous infrastructural, operational, capable resources and a strong regulatory frame-work to adapt to the cultural differences, regulatory policy changes in China and market forces. There is a need prepare ourselv es on some of the risk and challenges if the RMB revalues and the eventual Internationalisation of a fully convertible currency. Risks and Challenges should the RMB revalue or appreciate Foreign exchange risk management and mitigation will be key. A platform to better match payables and receivables minimizing FX risks and costs associated with potential currency mismatches and on Corporate Earnings from US to CHF should RMB devalues Ensuring first class regulatory risk management systems and highly qualified staff Agility in responding to local regulatory changes and market forces due to large revaluation impacting domestic companies and sectors that Credit Suisse has exposure to. Meet the regulatory minimum Capital adequacy and comply to new Basel III standards Significant revaluation impacting Chinas export growth resulting in high unemployment and social unrest. Competition for Foreign Banks particularly if they are constrained in their loan growth or find it difficult to obtain approval to open new branches. Cultural barriers and the challenges of attracting, training and retaining good calibre individuals given the increased competition for e xperienced professionals and the possibility that a number of local market professionals will inevitably be lured back to the Domestic Banks as local financial institutions become more competitive in terms of capabilities, career prospects and remuneration The Chinese market for Private Banking is still immature and strictly regulated. It will take much time and effort to educate various parties including clients. Associated costs involved in increasing the presence in China such as office accommodation, personnel, infrastructure etc and the uncertainty as to how soon such an operation will become profitable against a backdrop of fierce competition.

Epic of Gilgamesh Essay - 915 Words

The Epic of Gilgamesh is one of earliest known pieces of literature. Through years of storytelling and translation, The Epic of Gilgamesh became a timeless classic. This story is believed to have originated from Sumerian poems and legends about the king of Uruk, Gilgamesh. Throughout the epic, many themes arose about women, love, and journeys and the one I would like to discuss is the theme of death. Also, I will discuss if Gilgamesh accepts morality at the end of the story and the development of Gilgamesh’s character throughout the story. The story mainly focuses on the character Gilgamesh and this wild man created by the gods, Enkidu in which Gilgamesh and Enkidu later become good friends. Together they go upon quests to defeat†¦show more content†¦But when Enkidu dies while fighting Humbaba, one can tell a change in Gilgamesh’s character. Since Enkidu was his close and only friend, it makes it more visible that everyone is mortal. One may say that, by going into the forest and facing Humbaba, Gilgamesh makes a name for himself and changes the views of the people in his city. The great accomplishment of killing Humbaba makes him a better person because he protects his city and for his love of Enkidu and his people. This is a considerable amount of change from the beginning of the story. There are no major changes in the character of Gilgamesh until Enkidu enters the picture. Enkidu is the primary reason for the ultimate changes in the personality and maturity of Gilgamesh. The main factor contributin g to the changes in Gilgamesh the love that develops with Enkidu. Enkidu is made to make Gilgamesh more human. In the first paragraph of the book the gods are angry with Gilgamesh and send down an equal of himself, they send down Enkidu. After becoming friends, Gilgamesh changes because he has an equal to be with. From Cedar Forest, Gilgamesh is met by Shamash, the Sun God, who tells him, You will never find the life for which you are searching. This upsets Gilgamesh because he has traveled so far for someone to tell him he cannot have what he wants and is looking for. For there, Gilgamesh travels to see Siduri by the sea. Siduri will not let Gilgamesh pass to through to see Utnapishtim, the only man with eternalShow MoreRelatedThe Epic Of Gilgamesh Essay1721 Words   |  7 PagesMany texts, both ancient and modern, explore the possibilities of living forever. The Epic of Gilgamesh is just one of the stories examining this theory. The Gilgamesh tablets discuss many such issues pertinent to much of today’s population: what is the meaning of life? How will I be remembered? This age old topic is explored through many popular mediums today such as graphic novels and in the film industry. Additionally the immortal question is further studied in some scientific industries, toRead MoreEpic of Gilgamesh Essay1021 Words   |  5 PagesEpic of Gilgamesh . Mesopotamia, current day Iraq, derived its name from words meaning, the land between the rivers, which refers to the Tigris and Euphrates. This land was inhabited during the fourth millennium B.C.E. and throughout time transcended into political and military organizations. The significance of these cultures revolved around important warrior figures and their impact on society. The most important figure that will be discussed is the protagonist from The Epic of GilgameshRead MoreThe Epic Of Gilgamesh Essay998 Words   |  4 PagesThe Epic of Gilgamesh has many important female characters, and from them we can learn how females were viewed in ancient Sumerian society. The women are not typecast with simply one personality and role but instead are shown with many facets. In the Epic of Gilgamesh, women are shown as essential beings who can be either loving and nurturing or incredibly powerful and scary. Ways to combat mortality is a main motive for Gilgamesh and he could do it simply through his children as most men do withRead MoreEssay on Epic of Gilgamesh971 Words   |  4 PagesTitle: Gilgamesh Type: Epic Author: Anonymous Theme: The central idea of Gilgamesh was the greed that he had to receive eternal life. Gilgamesh was a selfish person who was half god and half man and wanted to keep his youth after seeing Enkidu die. Gilgamesh knew his destiny was not to receive eternal life because he was half man. He decided to go against the odds to fight against not having eternal life searching for the secret despite what the Gods told him. Exposition: The storyRead MoreEssay The Epic of Gilgamesh905 Words   |  4 PagesEgypt and Gilgamesh, king of Uruk, were such rulers. They were powerful and cunning individuals, yet they let their own selfish nature ruin the ability to be a great leader. Gilgamesh was said to be the spawn of a god and a human woman. His handsome features, great strength, and cunning intelligence were supposedly the best in the land. Yet, he did not rule his kingdom with justice. He often took advantage of his citizens for his own personal pleasures. The following quote, â€Å"For Gilgamesh, the KingRead MoreThe Epic of Gilgamesh Essay1245 Words   |  5 Pagesfantastical places, lies the narrative of a profound friendship between two men. In The Epic of Gilgamesh, an ancient Mesopotamian literary masterpiece, all of its events are centered around the development of the friendship between Gilgamesh, the tyrannical and stubborn king of Uruk, and the man created by the Gods to both complement and challenge his nature: Enkidu. Each of the three dream sequences in the epic represent different stages of Enkidu’s life – one portends his birth, another foretellsRead MoreThe Epic Of Gilgamesh Essay Essay982 Words   |  4 PagesThe Epic of G ilgamesh is an epic poem from four thousand years ago, from ancient Mesopotamia. It was written on clay tablets, and even if some part of sentences were not able to be recovered, the tale is understable. It is the oldest Epic found, and still one of the most famous too. While the stories are made of different Gods, cows talking, King with perfect strength, giant monsters, it seems hard to find similarities between the Epic and the 21st century. Yet by reading closely the passage fromRead MoreThe Epic of Gilgamesh Essay1139 Words   |  5 Pages nbsp;nbsp;nbsp;nbsp;nbsp;In the epic of Gilgamesh, Gilgamesh embarks upon a quest seeking immortality as a means to peace, meaning, and joy in life. He tries to reach it in many different ways, each as unsuccessful as its predecessor. The two main types of immortality are physical and through the actions or achievements of ones life. Gilgamesh tries first through his actions, but then undergoes a transformation which leads him to next attemp t physical immortality. He eventually comes back toRead MoreThe Epic of Gilgamesh Essay1522 Words   |  7 PagesThere are many vices and virtues displayed in the Epic of Gilgamesh. The Epic of Gilgamesh is a tale from ancient Babylon. Its hero, Gilgamesh the king of Uruk, is two-thirds god and one-third man. Throughout the epic, which consists of three stories, the character of Gilgamesh is developed. This is accomplished by changing the vices he possesses at the start of the epic, and replacing them with virtues he receives by its completion. â€Å"A virtue is a quality of righteousness, goodness, or moralRead MoreThe Epic Of Gilgamesh Essay991 Words   |  4 Pages The epic of Gilgamesh is a tale that displays multiple didactic messages throughout the course of the story. These morally oriented instructions that shape the epic’s characters are very much applicable to our current lives. Messages like: the importance of perseverance, that drive that pushes you to excel, the down side of sexual passion when not tempered, and how we need to keep our pride under control, not letting it cloud our judgement. These principled themes, among others, are clearl y visible

Internal Factors Influencing Consumer Decision-Making process The ase Literature review

Essays on Internal Factors Influencing Consumer Decision-Making process: The ase of Coke Consumers Literature review The paper "Internal Factors Influencing Consumer Decision-Making process: The Ð ¡ase of Coke Consumers" is a good example of a literature review on marketing. The consumer  decision-making process is a road map that represents thoughts, evaluations, and actions that lead an individual to accept or reject particular products. Precisely, it refers to the behaviors portrayed by a consumer in the processes of a search for, evaluation, selection, purchasing, use and disposal of products and services (Blythe, 2008). According to Lamb et, al (2011), the consumer decision-making model involves â€Å"need recognition, a search of information, evaluation of the available alternatives, purchase decision and post-purchase decision†. Understanding of the consumers’ decision-making processes helps in formulating effective marketing strategies and plans. Coca-Cola Company is the largest manufacturer of non-alcoholic beverages in the world. Some of the successful global brands of th e Coca-Cola Company include Die Coke, Sprite, Fanta, Glaceau vitamin water, Oasis, Oasis extra light and Relentless, Sprite Zero, Schweppes zero, 5 Alive, Kia ora, Kia ora zero and Powerade Powerade zero. The Coke brand is present in more than two hundred countries across the globe. According to Lantos (2010), the successful performance of coke in the highly competitive soft drinks market can be attributed to the Coca-Cola’s strategies to understand consumers’ needs and behaviors and its effective customer management and response strategies. Lantos (2010) explains that the innovation of these products was influenced by purchasing behaviors of different consumer segments.Internal Factors influencing decision makingConsumers of soft drinks such as coke can be described as problem solvers whose purchase decisions are influenced by their perceptions, individual personalities, and attitudes towards this product (Lee Johnson, 2012). According to lee Johnson (2012), coke co nsumers also focus on consequences when making their purchasing decisions. These behaviors are best described in Maslow’s hierarchy of needs, attitude-towards-object, Freudian, consumer perceptual process and classical conditioning learning models. Therefore, the main factors influencing decision-making processes for coke consumers include motivation, perception, personality and self-concept, attitude and learningConsumer motivationMotivation refers to an innate force that drives an individual to make a decision or engage in a behavior. It develops from an inner tension caused by unsatisfied desire (Bose, 2010). The need to fulfill specific desires drives human action. Unsatisfied needs lead to tension which, in turn, drives individuals to develop specific goals to satisfy these needs. Thus, consumers select specific product categories and brands that they believe are going to satisfy their needs, as described in the Hierarchy of Needs Theory. The Hierarchy of Needs theory wa s proposed in 1943 by Abraham Maslow.

Big Foot Research free essay sample

However, several colors have been reported such as dark brown, reddish brown, light brown, gray, and in rare instances, white. Most sightings have reported that the hair on Sasquatch is quite wiry and appears to be matted to the creature. Sasquatches are foragers. A few cases to support this statement are that they have been seen washing and eating wild onions in a stream. Crouching over a water hole washing edible grass roots. There were two piles, one washed and the other unwashed. Walking through a forested area stripping spruce buds off the trees and eating the seeds. It would also pull down branches to eat the buds. Head lights of a car caught a Sasquatch eating apples in front of a house. Many trees had the fruit stripped off higher than a human could reach. Stealing corn and turnips from a vegetable garden, chickens and turkeys also missing. A bedding area was found in an abandoned mine shaft, there were many brussel sprout stalks were found near the entrance. We will write a custom essay sample on Big Foot Research or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page A thousand 16 inch tracks were found, they showed a Sasquatch stripping the bark from trees to look for insects. Two deer hunters witnessed two dark brown Sasquatches 7 to 9 feet tall reaching down under rocks to find insects and worms. Two Sasquatches in a creek turning over rocks and eating something, possibly insects or small fish. A witnessed an animal digging up clams on the shore. They shot at it thinking it was a bear it stood up, screamed and ran away on two legs. Twenty people on two commercial fishing boats approached the shore, a Sasquatch on a mud flat stood up and ran away. They checked the spot where the creature stood and realized it was digging clams. Two adults and one juvenile witnessed digging up hibernating ground squirrels and feeding on them. Scavenging on road kill. How long have they been around? | Notes: Over the last two hundred years there have been thousands of reported sightings of Sasquatch and Possibly thousands of unreported sightings as well. Hundreds of footprints have been found and cast all over North America. Wide shoulders and a deep chest. Arms are longer than legs and hang down below the knee. Short thick neck or the appearance of no neck. This is due to the fact that the spine connects to the back of the skull and the Trapezius muscles are more developed. Pointed head, a unique anatomical characteristic of the Gorilla. This is attributed in the adult male to a prominent sagittal crest overlaid with a pad of fibro fatty tissue. This characteristic is less pronounced in females and smaller bodied adult males. Extreme muscularity. Broad, flat face. Jaw that protrudes beyond the nose. This anatomical feature (prognathism) is distinctly ape-like. Prognathism is due to the need for large jaws and teeth for mastication. Brow-ridges, above the eyes is a huge shelf of bone. Hair color is most often described as light brown, dark brown or black. Other colors that have been reported are grey, light, white, silver-tipped, and red to reddish-brown. Hair length is longer on the head, shoulders, and arms, than anywhere else on the body. Hair distribution, body is completely hair covered except for patches of bare black skin on the face, chest, soles of feet, and palms of hands.