Country Risk Analysis

Running head COUNTRY RISK ANALYSIS agreement of Payment The authentic account balance of mainland China amounts to 297. 1 bn US$ in the financial year 2009, whereas for the Guatemala it amounts to -0. 62 bn US$ in the aforementioned(prenominal) financial year (Chinas current-account balance 1982-2009). This implies that the current account balance of the legal residence country stood at surplus as compared to that of the host country. As out-of-the-way(prenominal) as capital account is concerned, it amounts to 109. bn US$ in 2009 for China whereas for Guatemala was uttermost less compared to that of China which implies that the home countrys capital account balance is as well at surplus in comparison to that of host country. Apart from the current account and the capital account balances of twain the countries, the prescribed gold guardianship of China as on December 2009 amounts to 1054 tonnes which was equivalent to 1. 5% of the of the content forex reserve, whereas for that of Guatemala, it was 6. tonnes in the same financial year equivalent to that of 4. 5% of the subject forex reserve (Guatemala Economic Statistics and Indicators, 2010). Government variables The political sympathies of China has been actively refer in formulating an effective fiscal policy so that the key projects offer be easily financed by issuing disposal debt. Apart from the fiscal policy, the fiscal policy is conjecture in coordination to that of the fiscal policy so as to promote economic step-up by containing deflation to the extent possible.As far as the monetary and the fiscal policy of Guatemala is concerned, a serial of structural reform is done with a primary motive to growing the economic efficiency by strengthening balance of payments and controlling inflation. The monetary rate has been stable because of the strict fiscal administration and the abundance of native resources. The legal court system of china is based on civilian law which was divided in to four level court system of which at the highest level is the supreme peoples court, then local peoples court and court of special jurisdiction lso known as special court. All these level of court systems ensure fairness in all the legal proceedings at china. The legal system of Guatemala follows a to a greater extent of standard European prosecutorial gravel which implies providing evidence to the judge in an open public court so as to enable him to take decisions based on the evidence presented. As the decisions taken by the judge based on the evidence results into square up decisions, this implies the fairness of the Guatemalas court system (Legal system of Guatemala).The corporate laws and regulations has been formulated in China as well as the Guatemala with an intention to protect the decriminalize rights and interests of companies, shareholders and creditors (Company equity of the Peoples Republic of China, 2005). In order to comply with the world shell out organizati on agreement on passel related aspect of ingenious station rights, China has strengthened its legal framework and has also revise its intellectual property rights. Counterfeiters and pirates has been the most in Chinese economy, as a result it is essential to have a better intellectual property right environment in china.Although the commitment from the central regimen official to tackle the problem is quite high but it has non been portion to deter the major IPR infringement. The intellectual property right is also not secure in guatemala due to the increased pirated related activities, hence government needs to take necessary action in order to sour such crucial problem. A calling union act has been formulated in accordance with the constitution to protect the positions of trade union which in conclusion leads to the development of chinas socialist movements.This act protects the legal rights of the employees. The activities of the union in the Guatemala has been patheti c. It has been progressively violated after the enactment of Dominican republic central the States trade agreement. The steps taken by the government becomes ineffective in addressing this concern ( wear Rights in Guatemala). Infrastructure The transportation facility in China is improving as the government of china is investing huge capital in the development of roads, highway and expressway.Similar is the condition in vase of Guatemala where government is actively participating in improving the transportation facilities. The port of Tianjin is an worldwide trading port in china of whose the land area is more than 20 km. Vessels of 70000-80000 dwt can sail in on the tide. Its through determine was around 57. 87million tons. A notice on the management of foreign trade in free trade zone has been issued by the ministry of commerce and the command office of the general administration which clarifies the way through which foreign trade and distribution rights can be obtained by th e operators inside the zone.In Guatemala also, thither are various free trade zones along with many industrial parks which results into competitive advantage for the investors (China Trading in Free flip-flop Zones, 2006). The banking, environmental and the educational factors are somewhat similar in both the countries. The banking in china has undergone lots of changes and it has remain in the hands of the government even after banks has given more autonomy. The educational activity on the part of the government is increasing in Guatemala as the education compute accounted for 15. % of the central government budget. The environmental issues in Guatemala are in similitude to soil erosion, acid rain, water pollution etc. , whereas excessive growth has also raised various environmental issues in china. References Company Law of the Peoples Republic of China, 2005. Retrieved April 24, 2010 from http//www. chinadaily. com. cn/bizchina/2006-04/17/content_569258. htm China Trading in F ree contend Zones, 2006. Retrieved April 24, 2010 from http//www. hg. org/articles/article_1191. tml Chinas current-account balance 1982-2009. Retrieved April 24, 2010 from http//www. chinability. com/CurrentAccount. htm Guatemala Economic Statistics and Indicators, 2010. Retrieved April 24, 2010 from http//www. economywatch. com/economic-statistics/country/Guatemala/ Legal system of guatemala. Retrieved April 24, 2010 from www. oas. org/juridico/Mla/en/gtm/en_gtm-int-description. pdf Labor Rights in Guatemala. Retrieved April 24, 2010 from www. ghrc-usa. org/Publications/factsheet_LaborRights. pdf