The World Bank shows that the GDP of China has been reducing since 2011. In 2011, the GDP growth was 9.5%, 2012 at 7.8%, 2013 at 7.7%, 2014 at 7.3%, and 2015 at 6.9%. These figure shows a shrinking economy despite many policies to stop the downwards trend. There are doubts about the truthfulness of the data because China is not a controlled state and, as a result, the data may be inflated. It follows that economic situation might be worse that it is. Last year, the country devalued its currency significant causing a major panic across the globe and shutting down trading on it stocks for two weeks. Our credit company has been facing reduced profits in China, and other Asian countries especially those that rely on oil export. Investments in Iran, Iraq, and Pakistan have been decreasingly significantly because the states failed to contain the shrinking oil prices to stabilize their economy. Besides, China’s five-year plan is to move the nation’s economic drive from investment-driven to consumer-driven one. The move dooms our credit company significantly because there is a likelihood of a further decrease in overall investments in the region that would lead to low demand for credit.
The company needs to change its focus from clients seeking to invest to those dealing with consumer goods.
Diversify the service from credit to include offering insurances to the investors and other relevant services
Cut operations from Asia and move to African countries, such as Uganda and Kenya that are due to start exploiting oil subject to an elaborate feasibility study
Shift all the operations from China other markets subject to feasibility study
Limitations
The company would have to incur a significant amount of capital in the changes occasioned by either expansion, reducing operations, or entering new markets.
Thank you.
Walter Smith.
