Risks and uncertainties in China Essay Example | Topics and Well Written Essays - 500 words

Risks and uncertainties in China - Essay Example Chinas large companies have establishing affiliates overseas and this is having an advantage on China accounting exposure especially when the country is experiencing weaker currency that it’s trading partners. An example is in 1993 when accounting standards of business enterprises was formed after a varying season of Chinese currency. Nevertheless, formation of this does not guarantee the Chinese company an efficient exchange rate. This poses a threat to the companies that are not well established (Delloite, 2005). Chinese GDP keeps on varying as per the graph below. This poses a great threat to local and abroad companies that have started operating in this market. For a business to succeed it need to look at a steady economy as aspects such as inflation might negatively impact on the company financial status. The graph indicate a decreasing economical growth since 2011 therefore, there is need to forecast on the future trends of the economy. Chinese people like consuming local products. Chinese people are so patriotic concerning their consumption behavior. As a result, citizens are highly concerned about the products they consume. In order for the company to penetrate in Chinese market, the product needs to brand their products like those of china. Failure to do so will see the company operate at a loss as its goods will not be consumed (Delloite, 2005).