Assignment 1Notes:The pressure on China to allow its currency to appreciate intensified recently in conjunction with the visit of China’s president, Hu Jintao, to the United States to meet with President Obama. China, which has maintained an artificially low renminbi for some time, has resisted claims that its policies give Chinese exporters an unfair competitive advantage in the global market place. While many countries have criticized China’s policies on its currency, the United States has been particularly vocal because of its large trade imbalance with the country.The United States believes that China’s policy of keeping the renminbi at artificially low levels rather than allowing it to float according to market forces make Chinese products more attractive in foreign markets. Moreover, U.S. Secretary of State Hillary Clinton argues that U.S. companies trying to export to China are at a disadvantage because of the country’s policies. Clinton would like to see China open its markets to U.S. manufactured goods, farm and ranch products, and services. According to Clinton, changes in China’s policy toward its currency would not only benefit the United States, but would also benefit the rest of the world by contributing to more balance and predictability in the global economy and broader prosperity. U.S. Treasury Secretary Timothy Geithner has gone as far as to suggest that if China does not take steps to revalue its currency, it will in fact damage its relations with the rest of the world. China however, claims that its policies on the renminbi are simply part of a larger effort to discourage hot money in order to prevent its economy from overheating. By prohibiting the open trading of its currency, China hopes to avoid increases in wages, raw materials prices, and property prices that could make its finished products more expensive in foreign markets. Yasheng Huang of the MIT Sloan School of Management defends China’s policies noting that even if China did allow its currency to rise, the U.S. would still continue to consume, and dollars would still flow out of the country. U.S. consumption would simply be funded by another country such as India. For now though, Secretary Geithner hopes to persuade China that as incomes continue to rise in China, so will the potential for inflation, which will ultimately push prices up, and make China’s goods less competitive. Economist Gen Xiao believes that if this trend continues, the question of China revaluing its currency will be a moot point anyway because eventually inflation in China will converge with a stagnating economy in the United States and the issue will be resolved.Watch this video: https://www.pinterest.com/pin/387591111650414147/ (opens in new window) OR use the embedded video link below.Watch VideoHow Currency Choices ‘Made in China’ Have Big Impact on U.S. EconomyUser:n/a – Added:1/18/11YouTube URL:http://www.youtube.com/watch?v=pXH-Up2sB24For your initial post, please choose 2 of the following Discussion Questions to answer. Include at least two outside sources to bolster your learning and understanding, (Note your sources): Why was the value of China’s currency a dominant issue at the recent U.S. – China summit? Why is the United States pushing for a higher renminbi? Why is China reluctant to allow its currency to appreciate?Reflect on how policy decisions made in China affect the strategies of U.S. companies. What does this imply about the interdependency of the global monetary systems and economy in general? Discuss the claims by U.S. Secretary of State Hillary Clinton that policy reforms in China would contribute to global economic balance, predictability, and prosperity. Do you agree with Clinton? Why or why not?How would inflation in China affect the competitiveness of its goods in global markets? What business is Caterpillar in?Why did they choose China?How did they choose their IJV partners?What are Caterpillar’s criteria for IJV success?How do the Chinese view Caterpillar as their IJV partner?Support your choices with your reasoning and references. References are mandatory in this discussion and they should not be just from your text. This exercise is about an exchange of ideas versus giving the “right or wrong” answer!Part B: Read the posts from your classmates and reply to at least two. (Choose classmates that haven’t already been asked questions by someone else, if any.)Assignment 2Part A: Watch the video belowWatch VideoCaterpillar Joint Venture – ChinaUser:n/a – Added:5/25/12YouTube URL:http://www.youtube.com/watch?v=UDCNmNNIgosand answer the following questions in short paragraph form. It may be helpful to research and add an outside resource or two. (Always note your sources).Support your choices with your reasoning and references. References are mandatory in this discussion and they should not be just from your text. This exercise is about an exchange of ideas versus giving the “right or wrong” answer!Part B: Read the posts from your classmates and reply to at least two. (Choose classmates that haven’t already been asked questions by someone else, if any.)Assignment 32) You could choose ONE of the questions below from this unit and write at least a one page journal entry that reflects your understanding of this topic.Unit 6 Journal Questions (please choose one): Reread the Management Focus on Walmart’s International Division and answer the following questions: oa. Why did the centralization of decisions at the headquarters of Walmart’s international division create problems for the company’s different national operations? Has Walmart’s response been appropriate? ob. Do you think that having an international division is the best structure for managing Walmart’s foreign operations? What problems might arise with this structure? What other structure might work?(Chapter 14);A small Canadian firm that has developed some valuable new medical products using its unique biotechnology know-how is trying to decide how best to serve the European Union. Its choices are given below. The cost of investment in manufacturing facilities will be a major one for the Canadian firm, but it is not outside its reach. If these are the firm’s only options, which one would you advise it to choose? Why? (Chapter 15);You are the assistant to the CEO of a small textile firm that manufactures quality, premium-priced, stylish clothing. The CEO has decided to see what the opportunities are for exporting and has asked you for advice as to the steps the company should take. What advice would you give to the CEO? (Chapter 16).
