Chapter 10
The USD currency value for the past one year has seen rise remarkably like never before against the Chinese Yuan. The United States has always unyieldingly protected the American dollar domination over the other many currencies at all costs. Thus Chinese currency has felt the brunt of that assertion, especially since last year, that is, from 5 May 2019 to now, and it might continue to experience the same.
Imposing the 10% tariff on Chinese products with a value of $300bn has negatively impacted the country’s imports to the United States. On the contrary, this has made the value of USD dollar against the Chinese Yuan to appreciate. The drop in Yuan value is also due to China’s decision to utilize its currency fall as an instrument to battle the trade war against the US. By doing this, the country exports become cheaper, whereas the import value increased.
As an importer to the Chinese market, the devaluation of Yuan is of significant concern to my company since this makes the imported goods more costly. Because of this, many of its citizens use substitute items produced within the country instead of imported ones. As a result, this has been a significant setback on my company’s profit as compared to when the currency’s value was more valuable.
Also, my subsidiary company in China faces a significant challenge when the profits paid originally in the Chinese Yuan have to be converted to USD to be brought back to the United States. The value of our money goes down because of the devaluation of the Chinese currency. Therefore this leads to overall profit reduction.
Chapter 11
There have been several questions regarding the effectiveness of the international monetary system over the past years. Many need the assurance that it can improve both the economic and financial growth of the global market instead of it being an unstable system itself. Several debates concerning the body arose primarily during the international crisis regarding the economy during the period of the Great Depression and the 2007-2009 crisis.
There has been a considerable mismatch in the international and national arrangements regarding the financial guidelines imposed by the system. To critics, this was a significant crisis that posed its effect globally, like in the period of the Great Depression that affected the whole world. The depression led to an economic downfall that lasted for ten years. It all began due to a fall in the stock market led to the suffering of many. Therefore this is just one of the instances that show how IMS has been an ineffective body.
I believe the IMS should be denied some power on the world stage since, in some instances, it has created some unconducive environment globally that was not its purpose. For example, relations among different nationals in expense to the policies of macroeconomics have been a more substantial part in inducing critics when it comes to the system. The problem enhanced the animosity between the countries as they tried to recover from it at an uneven angle, and some are yet to recover fully.
Chapter 15
Whereas there is no stringent restriction encompassing the many structures of the European Union and Vietnam commerce, it is still crucial to remember that they are differentiated markets with several needs. Therefore Entry Strategy and Strategic Alliances should be mulled over before entering the country’s extensive market. EU centralizes in export as a significant market entry while Vietnam incorporates the use of licensing.
My company, a food company, plans on exporting its food products to Germany, one of the European Union countries. The country relies mostly on imported food items to cater to its citizens’ needs. As much as the said market is saturated, my company plans to export healthy food items, which are higher in demand. Many of the citizens have become aware of the importance of eating healthily. Due to this, the need for healthier food substances has increased. My team and I have learned several methods to minimize the risks regarding the earlier stages of entry into the market, as well as making several commitments to avoid the same. We will use both direct and indirect methods to export our products to cover the targeted market easily. By doing all these, we will be able to learn our market more and also create awareness of our products hence ensure the smooth running of our business.
Moreover, my company is considering market entry into the Vietnam market through licensing since it is still a country regulated by its government heavily. We plan to launch our products with a company in the country that we obtained its information on the website. The company provides a proper licensing strategy to its partners that are worthy to note. The firm already possesses the required assets; therefore, we will be saving on that. Also, my company is a late entrant; thus, the proper firm establishment with other partners is a crucial point we considered to ensure its capability apart from reviewing its fillings. Ultimately looking for specific items to license with the company will offer a higher stake to my company.