Analyze the following article and provide a report that answers these questions:
Risk of China economic collapse overblown | Emerging Markets | AMEinfo.com. (n.d.). Middle East business & financial news | business directory & current events | AME Info. Retrieved July 22, 2010, from http://www.ameinfo.com/35739.html
- Based on the findings in the report, analyze three factors MNCs can use to evaluate China’s risk as a potential foreign investment.
- The Chinese Yuan is not convertible to American dollars. This restricts Chinese investors from exchanging their Yuan for dollars to invest abroad. The rate of exchange is currently 8.28 Yuan to 1 dollar. In this framework, answer the following questions:
- What are currency exchange controls?
- Why are these controls imposed?
- What impact do these controls have on Yuan to dollar exchange rates?