Thesis (MA)--Stellenbosch University, 2002. / ENGLISH ABSTRACT: Since the beginning of the economic reforms in 1978, the People's Republic of China (PRC)
has attracted continuous interest from foreign investors, both in the form of foreign direct
investment (FDI) and international trade, making the PRC the second largest host of FDI in
the world. Despite occasional declines in foreign investment, foreign investors remain very
interested in the long-term prospects for doing business in the country. The PRC's phenominal
economic growth, large consumer market, the accession to the World Trade Organisation
(WTO), and the government's commitment to open markets, economic reforms, and
restructuring of the economy are amongst the factors that continue to attract foreign
investment and trade.
Despite the huge market potential and strong desire by foreign investors to do business in The
PRC, the track record of foreign companies and investments in the country have at best been
mixed. While some foreign investors have reaped large profits, others have failed to meet
their performance targets. Foreign investors have faced a number of problems that are not
market or trade related, but associated with economic, political and social trends and
developments, including corruption, nepotism, crime, poor infrastructure, a depleted banking
system, inefficient legal system, unemployment and poverty. Therefore, it is not surprising
that many foreign investors are asking themselves whether the benefits of doing business in
the PRC are worth the risks.
In an increasingly uncertain and instable international trade and investment environment
political risk assessment and management have become essential components of any
profitable foreign investment strategy. Consequently, numerous political risk-rating agencies
and a large number of both qualitative and quantitative risk assessment methods have
emerged over the years. There is, however, neither general consensus regarding the definition
of political risk nor a comprehensively systematic method of conducting political risk
assessment. The definitions of political risk include a wide variety of indicators, ranging from
governmental actions to all non-market developments. The number of methods available for
political risk analysis range from informal, unsystematic assessments by a few individuals to
formal, systematic, and sophisticated risk analysis models. There are, however, some
similarities. The main objective of political risk analyses is to describe, explain, and forecast political conditions and events that affect the interests of foreign investors operating abroad or
planning to enter a foreign market. In addition, political risk analyses attempt to forecast
losses, and recommend means of managing the risk, avoiding the losses, and seizing the
opportunities.
Scenario planning is one of the qualitative methods used to analyse political risk. Scenario
planning, however, differs from most other approaches as it does not try to accurately predict
what will happen in the future or to provide the right tool for foreseeing the future
developments, but to offer a range of possible futures. The underlying assumption is that the
future cannot be forecast or predicted with certainty, but that the very process of thinking
about the future and exploring the implications of possible future scenarios may have a
profound impact on foreign investment and trade.
Scenario planning is a method that provides insightful information necessary to understand,
anticipate and respond to change and uncertainty in the future PRC. The development of four
20-year scenarios in this study demonstrates that the prospects for foreign investment can be
both positive and negative. When the economy continues to grow strongly, and the
government is able to maintain a stable environment and successfully implement the
necessary changes foreign investors are expected to reap the desired benefits. However, if the
problems facing the PRC at the moment further deteriorate foreign investors could expect
increased risks, and the possibility of failure. / AFRIKAANSE OPSOMMING: Vanaf die begin van die ekonomiese transformasie in 1978, het die Volksrepubliek van Sjina
voortdurende belangstelling van buitelandse beleggers geniet. Hierdie belangstelling was
gemanifesteer in die vorm van direkte buitelandse belegging asook internasionale handel.
Sjina het so aanloklik vir buitelandse beleggers geword, dat dit tans die wêreld se tweede
grootste ontvanger van buitelandse belegging is, en beleggers stel veral belang in die lang
termyn moontlikhede van besigheid doen in die land. Die Volksrepubliek van Sjina se
merkwaardige ekonomiese groei, groot verbruikersmark, toetreding tot die Wêreld Handels
Organisasie, en die regering se verbintenis aan die ontwikkeling van 'n oop ekonomie,
ekonomiese transformasie en die herstrukturering van die ekonomie as sulks, is sommige van
die faktore wat toenemend buitelandse belegging en handel aanlok.
Ten spyte van die groot verbruikersmark potensiaal en die sterk begeerte van buitelandse
beleggers om besigheid te doen in die Volksrepubliek van Sjina, is die ervarings van
buitelandse maatskappye tot dusver gemeng. Alhoewel sommige buitelandse beleggers groot
wins gemaak het, het ander minder sukses ervaar. Buitelandse beleggers word ook
gekonfronteer met baie probleme wat nie noodwendig met die mark of handel gepaard gaan
nie. Hierdie probleme word geassosieer met ekonomiese, politieke en sosiale gebeure en
faktore insluitend korrupsie, misdaad, nepotisme, swak infrastruktuur, 'n ledige bank sisteem,
'n ondoeltreffende regssisteem, werkloosheid en armoede. Baie buitelandse beleggers
betwyfel dus moontlik die vraag of besigheid doen in die Volksrepubliek van Sjina tog meer
voordele inhou as risiko.
In 'n wêreld waar internasionale handel en belegging met onsekerheid en onstabiliteit gepaard
gaan, het die aspekte van politieke risiko skadebepaling en -bestuur belangrike komponente
van enige winsgewende buitelandse belegging strategie geword. Gevolglik het verskeie
politieke risiko-analise agentskappe asook 'n verskeie risiko-analise metodes van beide
kwantitatiewe en kwalitatiewe aard hul verskyning gemaak. Ten spyte van die bogenoemde is
daar nog steeds geen veralgemeende konsensus oor die definisie van politieke risiko, of 'n
oorsigtelik sistematiese metode van politieke risiko-skatting onderneem nie. Die definisies
van politieke risiko sluit in 'n groot verskeidenheid van indikatore wat wissel van
regeringaksies tot mark-onverwante gebeure. Die verskeidendheid van metodologië wat
gebruik word in politieke risiko-analise wissel van informeel, onsistematiese skattings, tot formele, sistematiese en gesofistikeerde risiko-analise modelle. Die primêre doel van
politieke risiko-analise is om te beskryf en te verduidelik, en ook om politieke omstandighede
en gebeurtenisse wat die belangstelling van buitelandse beleggers affekteer te voorspel.
Addisioneel beoog politieke risiko-analise om ook die moontlikheid van verlies te voorspel en
om 'n strategie vir die bestuur van die risiko aan te beveel, om sodoende verlies so ver
moontlik te vermy asook om moontlike geleenthede aan te gryp.
Senariobeplanning is een van die kwalitiatiewe metodes wat gebruik kan word in die analise
van politieke risiko. Senariobeplanning verskil van ander benaderings in die sin dat dit nie
akkurate voorspellings vir die toekoms as sulks maak nie, maar eerder 'n verskeidenheid van
moontlike toekomstige omstandighede weergee.
Die ontwikkeling van vier 20-jaar senarios vir die Volksrepubliek van Sjina in hierdie studie
illustreer hoe die uitsigte vir buitelandse belegging positief sowel as negatief kan wees.
Indien die Sjinese ekonomie verder groei en die regering in staat is om 'n stabiele omgewing
in stand te hou asook die nodige veranderings te implimenteer, kan buitelandse beleggers
verwag om beoogde voordele van buitelandse belegging te ervaar. Maar as die probleme wat
die Volksrepubliek van Sjina op die oomblik ervaar voortduur en lof verswak, kan buitelandse
beleggers verhoogde risiko sowel as die moontlikheid van mislukkings verwag.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/53041 |
| Date | 12 1900 |
| Creators | Katainen, R. |
| Contributors | Brink, C., Stellenbosch University. Faculty of Arts & Social Sciences. Dept. of Political Science. |
| Publisher | Stellenbosch : Stellenbosch University, Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | Unknown |
| Type | Thesis |
| Format | 104 pages |
| Rights | Stellenbosch University |
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