Rising china or peaceful rise Essay Example | Topics and Well Written Essays - 2500 words

Rising china or peaceful rise - Essay Example China's rise can directly be linked to the opening up of its economy, which has resulted in a transformation of every aspect of China's interaction with the world. From exclusion from the United Nations to participation in over 150 international organisations, including the China sponsored and driven Shanghai Cooperation Organisation; from a closed economy to $ 300 billion in foreign direct investment; and from self-isolation and suspicion to one of openness and integration. All this has resulted in the Chinese economy becoming the world's fourth largest economy in 2006, with many experts predicting that, " the Chinese economy will be second only to the United States by 2020 and possibly surpass it by 2050".1 What does the future hold for China and the world Will a resilient economy enable China to ease itself benignly into the international power equation, being called a 'Peaceful Rise' by Chinese leaders keen to play down the obvious ramifications of China's growing economic clout Or are there any threats - both internal and external - to Rising China that can undermine the whole process, and the stated Chinese aim of becoming an intermediate developed nation by 2049, the 100th anniversary of the founding of the People's Republic of China China's eventual rise to global power status and the path it then adopts to achieve its national goals is difficult to predict given the inscrutable nature of the Chinese character. Ashley Tellis of the Carnegie Endowment has this to say, "Will China's rise trigger regional counterbalancing The answer is "yes." The long answer is "yes, possibly"; and the real answer is "yes, possibly, but we can't be entirely sure."2 Pei seems to challenge the accepte d hype over China being both the world's largest manufacturer as well as the world's biggest market simultaneously. Pei feels that China's current policies, " [are] spawning a dangerous mix of crony capitalism, rampant corruption and widening inequality [and that policies]adopted to generate high economic growth are compounding the political and social ills that threaten its long term survival".3 Be that as it may, it may be surmised that latent impulses to become a global power and a direct challenge to the supremacy of the United States would emerge as a consequence of its Comprehensive National Power, driven by its rapidly expanding economy, backed by a modern military machine. Internal Challenges to China's Peaceful Rise China is conscious of the fact that its geo-political power is directly tied to its economic growth, which requires a stable internal and external environment. Since the present global balance of power is not in its favour, and since this balance is unlikely to change in the mid-term, it has limited its geo-political ambitions while it goes about quietly building up its Comprehensive National Power. While other countries would seek to contain China's attempts to become the sole power in Asia, there are several domestic liabilities that China must address before its can aspire to that exalted status. These liabilities according to some analysts have reached, or are at the point of reaching critical mass, and under such circumstances, China might not be able to withstand a crisis situation

CLO, managing business finance Essay Example | Topics and Well Written Essays - 1750 words

CLO, managing business finance - Essay Example The feeling among many investors is that the development on new regulations to reduce the risk that comes with these forms of loans will reduce the chances of getting into a financial crisis. In 2014, it is evident that investors have ventured into the form of loan due to its higher returns as compared to other forms of loans. In this perspective, we seek to analyse the possible reasons for this trend and how this is likely to impact financial flows in the global arena. Collateralized loan obligation is defined as a form of low interest loan that comprises of a pool of debt backed up by some form of security. To design a CLO, commercial group different loans together and sectionalize them into different parts. Each section of the loan bears a different risk, some having higher risks than others. The rationale is that those who pick higher risk sections have higher returns while those who pick lower risk portions have lower returns. Another point to note is the way that cases of default are handled. When defaulters fail to repay the loan, the investor with high risk loan gets less money than one who has a lower risk section. The principle behind the formation of the CLO is to increase the lending willingness of the investors and to lower the interest costs. The banks accomplish these loans through a tranch structure in which different classes of borrowers dear different risks and acquire different level of returns (Pauley & Kroszner, 2012). This loa n structure operates much similar to the home mortgage loans that existed in the 1980s. At this time, companies that had good credit ratings were allowed to borrow at lower prices while others borrowed from the banks at much higher interest rates. For this reason, CLO gained popularity prior to the financial crisis in 2008. The global financial crisis of 2008 is was the cause for the loss of popularity for the CLOs in the world. A