Smith Experience Abroad:
Doing Business in China: Manufacturing & the Impact of the
Impending Yuan Appreciation
Fall term one-credit BUSI788C and
Winter term two-credits BUSI798C
date in the 21st century, no other country provides the manufacturing might of
China. However, as worker unrest manifests in suicides and employee compensation
slowly rises, companies keep their eyes on other sourcing options.
China has won the world competition for low-cost manufacturing in part
because the renminbi is thought to be held at an artificial low. While countries
including America have cried foul, the situation may partially resolve itself
with the onset of inflation in China; inflation could ease trade and currency
tensions by bringing America’s huge trade deficit more into line. China’s
inflation is running 5 percent at the consumer level, according to official
measures, but many economists describe these measures as based on flawed and
outdated calculation methods and the real figure may be up to twice as high. As
the price of Chinese goods rises 20-50%, Americans are cancelling orders. Up to
25% of shipping orders were cancelled for spring 2011.
This class will learn more about the yuan and what currency imbalances mean
for trade and international relations. We will also look at China’s options for
control of the currency market. We’ll examine current events, and look to see
whether American consumers accept higher prices of traditionally low-cost goods,
or whether they balk and implement other options.
Dr. Gurdip Bakshi will lead this class. He is an expert on currency and
currency trades, and international finance.