Currency Exchange Rates

Question 1

Use the publicly-traded company you chose in Module 1 (Ulta Beauty) and imagine it has made a strategic decision to start doing business in China. Using the discussion, Currency Exchange Rates: A Case in China with Country Risk, (Chapter 7, Global Finance, page 192 of your textbook) as a model for the report you will write, prepare a report in which you:

1. Develop a brief country risk assessment.
2. Determine the political, economic, social, and capital risks associated with doing business in China. What are the most important factors to consider? Why?
3. After years of keeping the Yuan pegged to the US dollar, in 2015 the Chinese allowed it to float freely in international currency exchange rate markets. You may read more about the Yuan reforms here. Many economists believe that keeping the Yuan pegged to the US dollar has caused it to be undervalued by 30 to 50 percent. Discuss what impact a revaluation of the Yuan might have on US multinationals doing business there, on China’s exports, and on Chinese citizens’ standard of living. What impact would a revaluation have on Chinese inflation and on purchasing power parity? Explain. 
   
   Your paper should be about 2,000 word

Question 2

Short Essays (50% each): Your essays should be based on historical evidence drawn from the course material (including lectures, readings). The total length of the two essays (double-spaced, font size 12) must not exceed 6 pages.

1. Please explain the dynamics between Chinese government and popular nationalism in the post-tiananmen era. Use examples from the course material to illustrate your points. (Hint:lectures, Osnos, and Zheng).

2. You are chatting with a friend, Ferris Wheel, over coffee at Jazzman’s. Your friend says, China is an authoritarian state. The party-state exercises absolute control over society and does not allow any expressions of public opinion Do you agree with this comment? Or do you see a hore complex and nuanced picture when it comes to the relationship between the Chinese government and the Cinese public? Please use examples to illustrate your points.(Hint: lectures, Osnos, and Shapiro)