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What government policies affect my company’s performance?



http://www.istockanalyst.com/article/viewiStockNews/articleid/4828796

The relative increase in export prices, which means that Chinese products decline in


price competitiveness in foreign countries, and the price advantage is ( Made in

China) the real vitality. In addition, the export enterprises will face exchange losses.
Moreover, the RMB appreciation would lead to increased labor costs and other
production costs, it is a large dependence on the export sector will be difficult to avoid
short-term impact, in particular, will seriously affect those with low price, low-tech
exports.
1. the negative impact of RMB appreciation

     (1) profits goes down. RMB appreciation means that prices of Chinese products
  in foreign currency increasing, and that foreign customers to spend more money to
  buy Chinese products, Chinese products so the prices increased in the international
  community. Changes in exchange rates will make exports of the cash inflows and
  outflows are inconsistent, the company profit goes down.

     (2) reducing ability to attract foreign investment. Investment costs will rise,
  which would weaken the enthusiasm of investors and reduce the source of funding
  for domestic enterprises, thus restricting the expansion of the company's production
  scale and production capacity expansion.
2. the beneficial impact of RMB appreciation

     (1) to help enterprises enhance the capability of independent innovation. RMB
  appreciation would reduce the cost of independent development, and increase
  imports of high-end technology, indirectly promote the technological upgrading of
  enterprises and enhance their core competitiveness.
     (2) encourge investment overseas. Investment overseas need to use the local
country's currency, reduces significantly the cost of overseas investment, and
enhance the international purchasing power of the enterprise and foreign
investment capacity.

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Case6 ren wei

  • 1. What government policies affect my company’s performance? http://www.istockanalyst.com/article/viewiStockNews/articleid/4828796 The relative increase in export prices, which means that Chinese products decline in price competitiveness in foreign countries, and the price advantage is ( Made in China) the real vitality. In addition, the export enterprises will face exchange losses. Moreover, the RMB appreciation would lead to increased labor costs and other production costs, it is a large dependence on the export sector will be difficult to avoid short-term impact, in particular, will seriously affect those with low price, low-tech exports. 1. the negative impact of RMB appreciation (1) profits goes down. RMB appreciation means that prices of Chinese products in foreign currency increasing, and that foreign customers to spend more money to buy Chinese products, Chinese products so the prices increased in the international community. Changes in exchange rates will make exports of the cash inflows and outflows are inconsistent, the company profit goes down. (2) reducing ability to attract foreign investment. Investment costs will rise, which would weaken the enthusiasm of investors and reduce the source of funding for domestic enterprises, thus restricting the expansion of the company's production scale and production capacity expansion. 2. the beneficial impact of RMB appreciation (1) to help enterprises enhance the capability of independent innovation. RMB appreciation would reduce the cost of independent development, and increase imports of high-end technology, indirectly promote the technological upgrading of enterprises and enhance their core competitiveness. (2) encourge investment overseas. Investment overseas need to use the local
  • 2. country's currency, reduces significantly the cost of overseas investment, and enhance the international purchasing power of the enterprise and foreign investment capacity.