Potential Strategies for Hsbc’s Entry Into China’s Rural Banking Sector

In 2008, the American economy broke down. Known as the Global Financial Crisis, this is widely considered to be the worst financial crisis since the 1930’s when the stock market crashed and the Great Depression hit.

It is this that has sparked China’s vulnerability to external shocks. In 2011, China’s exports amassed almost $2 trillion, however in Feb 2012, China recorded a $31.5 billion trade deficit as a result of the European sovereign debt crisis in which China’s main trading partners plunged into recession. China’s severe BOGS decrease is an attempt to control growth and a sustained level of 7.5%. Investment policies are also critical for China to achieve economic growth and development. Foreign Direct Investment (FDI) in China is being sought primarily in the redesign of State Owned Enterprises (SOE’s) and in the development of interior provinces. Between 75-80% of World Bank loans to China in 2008 were directed to the central and western regions, the most economically disadvantaged. This promotes increased wealth within China, leading to higher levels of development due to a more positive Human Development Index (HDI), which currently sits at 0.687, up from 0.677 in 2010. Thus, trade and investment are critical factors in ensuring that China’s growth remains sustained at 7.5% whilst still encouraging increases in development.

People living in different regions, countries, or communities have their own culture backgrounds, sometimes their attitudes may be influenced by their culture. For example, the Chinese tend to save their money rather than spend them, in 2007, gross national saving of China was 54.1%, while the figure was 15.6% in the UK (Ma and Wang, 2010), for HSBC, high saving ratio means that its retail banking services could benefit from it. Therefore, in 2006, after many years struggling with the Chinese government, HSBC was allowed to receive deposit from public in China. (PwC, 2010)

2008 financial crisis caused severe trauma on the world economy, although the economy of China grew moderately, China 's financial system is very fragile, the financial laws and regulations are deficient, the structure of foreign change reserve is very risky, because China has huge foreign exchange reserve of US dollar, which makes China also suffer from the financial crisis. Financial crisis is caused by the American subprime mortgage, to combat the financial crisis, the United States issued a substantial amount of U.S. dollars, which makes the U.S. dollar depreciate continuously, and this action makes many countries that have great amount of foreign exchange reserves in U.S. dollars suffer huge losses. China has the largest foreign exchange reserves in the world, in 2008, China’s foreign exchange reserves had reached $ 2 trillion, the continues devaluation of the U.S. dollar make China suffered a lot, thus the international capital system based on U.S. dollars has been questioned, China and other countries that also hold a huge amount of U.S. dollars started to build a new international capital structure. In 2011, China, Japan

Nowadays, China has become the second largest economy in the world. The GDP (gross domestic product) of china was growing at 9.7% per year in average since 1978, which the year of Chinese “open door” politic founded. China also has become the biggest producer and consumer in many key agricultural and industrial markets and the largest FDI recipient among the developing countries. The performance of china in developing of economy is called “china’s economic miracle”, which be studied by many economists. However, there are also bad results with the development of economy in china such as environment disruption, corruption and

Although Wade Financial Services focuses more on the farm and ranch production side, these services are a huge need in agriculture. With growing population in the world developing strong farming operations is a must. The difficulty of economic growth in the agricultural industry is devastating to farmers and ranchers. The public think that these problems only occur to young farmers and ranchers. That is far from the truth because of the economic lows in the prices of raw commodities. Without the dedication of people like Penny and her crew the agricultural community would be in a worse economic

3. Due to economic recession in agriculture, most farmers are encumbered with debts. As a result, they cannot afford

The Great Recession of 2008 was the biggest global financial crisis that the world witnessed after the Great Depression of the 1930s. Collapsing markets, failure of banks and drastic decrease in international trade were just some key characteristics of the great recession. It became clear after the collapse of the capitalist ideology enforced by United States that this was the end of America-centred age of globalization (Lecture 2). This paper will compare and contrast the key characteristics of the great recession and the great depression. It will also emphasize that the root causes of the financial collapse of 2008 were first, unfavourable macroeconomic factors such as increasing deficits in the current account of advanced countries and loose

New farmers’ chances for success will be greater if they can avoid going into debt to finance their farm operation, since the initial profits can be reinvested in the farm rather than paying the bank. Credit cards, with their extraordinarily high interest rates, are a particularly dangerous way to finance a farm. Thinking carefully about options, and resisting temptations to buy more and better equipment than is needed is important for all farmers to remember. Many operations have been sunk by overcapitalization. Some operations will benefit from a loan, especially if they have a solid business plan that exhibits a realistic strategy for paying it off.

Concerned investors overreacted to the news of a slower Chinese economy, which partly explains the stock market turmoil in the U.S. and around the world. China’s economy is not immune from the business cycle. Its economy’s growth rate eventually came down from the double digits to the single digits as it undergoes structural changes. China is shifting from an export-led to a domestic consumption driven economy. Since 1976, the beginning of China’s journey towards integration into the global economy, annual GDP growth averaged 9.5%. Since 2012, growth has been below average falling to 6.8% in the fourth quarter of 2015. While it can be argued that China’s economic slowdown has both direct and indirect effects on the U.S. economy through trade and financial flows, a slowing Chinese economy has marginal effects on credit unions. Moreover, it is difficult to aggregate the effects of China’s economic slowdown in future U.S. economic growth.

The Great Recession of the late 2000s started with the subprime crisis in 2007 that has weakened the economy of almost all the big nations with maybe the exception of the Republic of China. It seems, when we have a look at economic growth of China that, it has, until now, to some degree, benefited from the global financial crisis. Indeed, it should be highlighted that when a recession occurs, depending on the type of recession, in general, the economies of some countries are

With the outbreak of the U.S. financial crisis in 2008, the whole world's financial situation is not good, but except one, which is China. However, many people find out that China is walking on the old U.S. economic way, which means China will have economic crisis either. So right now, all the eyes from all the countries are watching at China’s economy, because if Chinese economic collapse, there are no more people buy Japanese animations and European luxuries. And after the economic crisis, China will recovery U.S. Treasury bonds, but American unable to pay, then the whole world economy is facing collapse; we can call that butterfly effect. So right now, in this context, the same conditions, and the same nature of the Chinese economy grows up, any black swan events are likely to be the fuse of Chinese financial crisis, and even the world economic crisis’ fuse. For example, the author of “Chinese Citizens Have Their Eyes on Bubble,” C. Cindy Fan mentions that the fuse of Chinese economic crisis is real estate. Right now, Chinese people put all their savings into real estate, which led to the housing bubble, but because of consumer demand, the government is unable to stop it. (Fan) I agree with Fan’s idea, which is Chinese economy will collapse because of Chinese real estate bubble.

The global economy was relatively doing fine more than five years ago before it was hit by economic downturn or recession. During this period, the American economy was at its peak, particularly in the fourth quarter of 2007. However, this was followed by a mild recession at the beginning of 2008, which eventually turned into a severe credit crisis across the world approximately one year later. While only a few countries escaped the economic recession, virtually no country could avoid the severe bear markets in stock (Norris, 2012). Some countries like the United States experienced changes in gross domestic product and stock markets. Since it has the best record of the main developed countries, the United States was severely

One major factor that contributed to their recession is the fact that Chinese currency, the yuan, was devalued on August 11th of this year; a decrease of 4.4% which in turn led to their stock market plunging into a crash (Wolff). Consequently making the majority of imports into China more expensive and leaving their citizens with less purchasing power for goods and services. By the population left without being able to make as many purchases, the industrial activity and manufacturing of goods slowed down thus meaning that if not as many goods are being produced then not as much gasoline or oil is being used for assembly lines, transportation, etc (The Causes…). To put simply, if there are less funds circulating, the public will spend less, fewer goods and services will be created, and less oil and gasoline will be consumed. With China being the second largest economy in the world, the downfall of their own market tends to rattle other countries in close business relations, one of which is the United States (Ranasinghe).

Before the China’s reform and opening-up in 1978, China for a long time to implement the planned economic system and the banking system is highly centralized. There wasn’t truly independent commercial bank in China between 1949 and 1978 and The People 's Bank of China is the only bank in this country. In that period, The People 's Bank of China took charge of commercial banking business, along with making macroeconomic policies and monetary policy. Since China began to implement market overhauls in the 1978, the Chinese banking industry developed in a more commercial and more market-oriented direction. It is reasonable to divide the 30-year- development into the following three periods.