Security analysis Essay Example | Topics and Well Written Essays - 2000 words

Security analysis - Essay ExampleConsequently, more fund managers from the United estate have made efforts to invest in mainland China since its economic growth rate is significantly high comp ard to other countries in the world. It is imperative to note that investment fund managers are driven by the probable rate of return from a given neck of the woods, and this is the motivating factor for choosing an investment destination. Advantages of Investing in China One of the advantages of investing in China is the magnitude presented in the potential of its market. Foreign ventures and businesses set up investments in order to serve a local market. The market size and growth rate opportunities are some of the key factors in the determination of an investment destination. Essentially, investors target unexploited markets that are of a significant size with potential for growth. Therefore, countries that have large markets and growth potential are viable investment destinations. The Chinese population of over one billion people offers a large market for all industrial products (Malkiel et al., 2010). In fact, the huge population has a great consumption potential that can be attach for business gain. In the recent past, the purchasing power of the Chinese population has also increased significantly, grading up the uptake of goods and services. Therefore, the large population of the Chinese region attracts fund managers to invest in the region due to the potentially huge market that population offers. Imperatively, China is a prime location for any investor to pump financial resources into as the prospect of getting a market for the goods and services produced is high. The infrastructural development of a region has an influence on the economic growth of the place. The availability of roads, waterways and other forms of charge is a full of life consideration in the evaluation of an investment destination. The Chinese administration has made significant inves tments in the transport infrastructure. In fact, popular investment destinations in China such as Beijing, Shanghai and Guangzhou have a world class transport infrastructure that offers a great environment for investment (Buckley, Wang & Clegg, 2006 p. 145). The availability of resources is an cardinal factor in the selection of an investment destination. Human resource is a significant factor of achievement for any economic activity. The large Chinese population offers a huge pool of labor force play that can be harnessed for economic production. The large population in China also implies that the represent of labor is significantly execrableer compared to other regions. One of the principles of business investment is the minimization of cost. The relatively low cost of labor in China makes the cost of business operations less than in countries in the European Union (Eichengreen & Tong, 2006). Hence, low costs of operations can offer a business an prospect to obtain more profi ts in the long run. China also has substantial natural resources. industrial production and manufacturing rely on natural resources to produce goods and products. China has its own oil reserves as well as the largest coal deposits on the globe. The supply of electric power is sufficient and affordable. It should be observe that the country has minerals and land which can be harnessed for economic gain. China has adopted policies that encourage bareness to international trade as well as easy access to internation