1. Internation trade, investment, and finance
Jan

2. Which Western companies are taking a hit in Russia?

5. China became the world’s top destination for foreign direct investment in 2014.

6. China Trumps U.S. for Foreign Investment

11. Top destinations for foreign direct investment in 2014
SOURCE: UNCTAD
China
$128bn
Hong Kong
$111bn US
$86bn
Singapore
$81bn
Brazil
$62bn UK
$61bn
Canada
$53bn
Australia
$49bn
Netherlands
$42bn
Luxembourg
$36bn

12. Capital Inflows Become Outflows in China, WSJ Analysis Shows

14. China Trumps U.S. for Foreign Investment

15. Why the Chinese Are Snapping Up Real Estate in the U.S.

18. WHY?

19. Where is the good place to go?

21. How to move the money out?

25. Government Policies toward the Foreign Exchange Market

26. Government Policies Toward the Foreign Exchange Market
Two Aspects
·     Policy toward the level and variability of the (nominal spot) exchange rate. In simple terms, the choice between a floating exchange rate and a fixed exchange rate.
·     Restrictions (if any) on the use of the foreign exchange market. These restrictions are generally called exchange controls.

27. Decisions for a Government That Has a Fixed Exchange Rate
What to peg to?
·     Gold
·     U.S. dollar
·     Other foreign currency
Basket of foreign currencies

28. Decisions for a Government That Has a Fixed Exchange Rate
When to change the fixed rate?
·     Never (not credible)
·     Seldom (adjustable peg)
·     Often (crawling peg)

29. Decisions for a Government That Has a Fixed Exchange Rate
How to defend the fixed rate?
·     Intervention in the FX market
·     Exchange control
·     Alter domestic interest rates
Macroeconomic adjustment

30. Figure 19.1

31. Figure 19.3