Topic
Opportunities and Risks of Investing in China
Instructions
AC4904 Introduction to Multinational Finance
_____________________________________________________________________
Word count: 2,000 words (excluding tables, references). Havard format. No appendices to
be included.
Please present your assignment in 12 point arial font, double spaced. You will be
graded partially based on the professional style of the report
including structure, conclusion and referencing.
The marketing division of Baker are currently looking at potential trade in countries outside
Europe or the development of current marketing strategies in those countries where they
only have one outlet.
The Directors’ Report from the consolidated financial statements of Baker Pharmaceuticals
Limited for year ended 30 June 2016, confirmed that there was a profit for the financial year
after taxation amounting to £15,225,000 (2015: £11,545,000). Operations in 25 countries
were reported for taxation purposes, along with the joint venture in North America.
You work in finance management and your day-to-day duties involve assessing proposed
investment projects to see if they meet the company’s criteria for suitable investments. Your
boss asks you to complete a brief report to be circulated to the senior management of Baker
advising on the opportunities and risks of investing in *……………, including strategies to
manage any potential or identified risks.
Your report should;
1. Be presented in a professional manner.
2. Provide some relevant background information on the country.
3. Report briefly on the key identified investment opportunities in the country,
considering retail outlets and/or distribution and/or manufacture.
4. Analyse the key risks associated with investing in this country.
5. Identify some approaches to managing the risks associated with investing in the
country.
Parts 4 and 5 should attract the majority of your attention in writing the report and should
demonstrate good understanding of the risks, theories and concepts related to FDI,
through practical application in your country.
Answer Preview
Multinational investment involves ownership of assets and facilities by a business corporation in more than one country other than the parent country, with offices in those countries but having a head office in one country where the global operations are coordinated and managed. Unlike the multinational companies, the foreign development investments involves an individual or a company owning business interests, operations or assets in a different country other than the parent country and its operations are not necessarily coordinated in the parent country.
China has experienced exemplary economic growth since mid 20th century, becoming one of the largest economies in the world. Similarly, it has experienced the largest number of multinationals and foreign development investments in recent years (Cheremukhin et al., 2015).
Word count: 2175