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Essay / Research Paper Abstract
This 11 page paper considers the different risk that may be faced by a bank from an EU country considering setting up a branch in China. The paper looks at the political and financial risks, considering how they many be measured and how the potential impacts may be mitigated. The bibliography cites 15 sources.
Page Count:
11 pages (~225 words per page)
File: TS14_TEbankchn.rtf
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Unformatted sample text from the term paper:
commercial risks associated with banking and the political risks. These risks may be present wherever a branch is set up in a new country, but the aspect of political risk
may be less if the branch were set upon in an EU country where the political regime is less likely to undertake extreme action. Political risk has always existed
in commerce. Different political hierarchies, changing powers and political strategies can have long term and far reaches impacts for a company undertaking commercial activity within the area may find
that they face changes which they cannot control. Governments may change regulations and statutes, adjust trade tariffs and policies, which may result in increased costs, changing statutory requirements, moving markets
and in extreme cases the risk may be such that the company will loose the business, as seen in 1999 in China. A good example of political risk occurred
when the government involvement by the Chinese Ministry of Information Industry stated that there would not be allowed foreign investment in the Internet in China, this involved the closing down
40 foreign investments on mobile telecommunication by foreign companies (Doebele, 2000). These were investments which had been negotiated with a state owned company, China Unicom and had been made it
what appeared to be a stable market (Doebele, 2000). Other political risks may be as wide ranging as terrorist attacks and the way that policies will impact on licenses or
contracts that are granted. Political risk, although histrionically always present, has only recently become widely acknowledged due to recent events and the growing realisation of the impact changing political
environment will mean for individual companies. There are been many recent examples, such as those in China that have helped to raise the awareness of this risk. Whilst it is
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