As a requirement of MBA program from Department of Finance, University of Dhaka, we have prepared our report as a course material of MBA Course no: 526 ( Foreign exchange and International Risk Management) with the objective of finding out the foreign exchange relationship of China. That is included with export- import composition. China is the world's fastest growing major economy, and perhaps the most dynamic. Since 1978, when the country announced its opening up and reform policy, and began experimenting with capitalism and market forces, the country's economy has boomed. While growth has begun to slow sharply in 2008, after growing at close to 12 percent in 2007, China is a rising global economic power. Growth has been driven by exports and heavy investment in infrastructure and manufacturing. Coastal regions are powered by manufacturing, but state-owned companies continue to dominate the domestic economy, even though private entrepreneurs are beginning to thrive. In recent years, China has racked up a huge trade surplus with the rest of the world, particularly the United States and Europe, and has also accumulated over $1 trillion in foreign currency reserves. The country's stock market is troubled and volatile, though an increasingly powerful force. Widespread bribery and corruption are formidable challenges for companies doing business here. Intellectual property theft and counterfeiting are also persistent problems. Still, China has some of the world's most dynamic Internet companies, such as Baidu.com, Tencent and Alibaba.com, and a growing number of wealthy entrepreneurs and billionaires. Many of the world's biggest and most prestigious brands, such as Coca-Cola, Microsoft and Procter & Gamble are aggressively expanding their operations in China. China has previously been one of the fastest-growing economies in recent years. However, stimulus measures implemented by the government have created the risk of asset bubbles developing and China is looking at ways of gently slowing growth to what it sees as more sustainable levels. These measures have included a curb on lending to prevent overheating in the property and investment markets, and tightened monetary supply.
However, it is not just domestic factors influencing growth. Another reason for the slide is the slowdown in exports because of weakening demand from Europe and the US. Data showed output from factories and workshops in the country rose 13.9% for all of 2011, which is a slower pace than in 2010. China is the fourth largest exporter to the world, with over 5 percent of the world export market. China exports were worth 174.7 Billion USD in December of 2011. Export growth has continued to be a major component supporting China's rapid economic growth. Exports of goods and services constitute 39.7% of its GDP. China major exports are: office machines & data processing equipment, telecommunications equipment, electrical machinery and apparel & clothing. China’s largest exports markets are European Union, United States, Hong Kong, Japan and South Korea. China ranks fourth in the world exports. Of over 2 million companies located in China, less than 5 percent take part in activities directly related to export, according to the Department of Foreign Trade of China. The contribution of smaller-scale enterprises to the China export picture has been on the rise since 1977. Almost half of total exported goods and services were produced by companies having somewhere between 10 to 499 employees. Exports from China rose 13.4 percent in December compared with a year ago, while import growth unexpectedly slowed to 11.8 percent because of lower prices and moderating domestic demand, government data released Tuesday showed. Overall, the Chinese trade surplus shrank to $155 billion in 2011, from $183 billion in 2010, as imports picked up and demand for Chinese goods in Europe and elsewhere softened. IHS Global Insight, an economic forecasting firm,...
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