China's Economy Has Surged, and in 2014, Overtook the United

question 9

Essay

China's economy has surged, and in 2014, overtook the United States as having the largest economy in the world. However China's economic success has been tempered by concerns. What are three weaknesses in the Chinese economy? ​

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Definitions:

Exchange Rate Risk

The potential for investors to experience losses due to changes in the exchange rate between two currencies.

Short-term

This term usually refers to a period of time less than one year, often used in the context of finance for investments or liabilities.

International Fisher Effect

An economic theory that suggests that the difference in nominal interest rates between two countries is directly proportional to the expected change in the exchange rate between their currencies.

Foreign Currency Approach

Relates to the strategy for evaluating investments by considering the impact of foreign exchange fluctuations on investment returns.