International Business Association | General Meeting #4
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
9/6/2014
IBA
th
6
Monday, October
107 Business Building
Property of International Business Association
1
International Business Association | Agenda
9/6/2014
1.
Icebreaker & Happy Quarters
2.
Club Updates
3.
Market Updates
4.
Case Study: China’s Yuan-“Our Currency, Your Problem?”
5.
Wrap-Up
Property of International Business Association
IBA
2
Fundraiser | Stock Market Game
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Property of International Business Association
IBA
Social | International Dinner
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Property of International Business Association
IBA
THON | What is THON?
IBA
• THON
is the largest student run
philanthropy in the world
• Raises money to help children fight
pediatric cancer
• Since 1977, THON has raised over $114
million for the Four Diamonds Fund at
Penn State Hershey Children’s hospital
th
• THON will take place on February 20 to
nd
22 at Bryce Jordan Center (Dance
Marathon)
9/6/2014
Property of International Business Association
THON | Canning Weekend
5th to 7th
• Morristown New Jersey
• Car pool to my house
• Fundraising safety e-Course
- TeLMS.THON.org
• Replaces work shops
• November
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Property of International Business Association
IBA
Fundraiser | Kiva Enterprise
• Received
$34 back from our previous loans
• 4 different enterprises we could fund
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Property of International Business Association
IBA
Fundraiser | Kiva Enterprise
9/6/2014
Property of International Business Association
IBA
Fundraiser | Kiva Enterprise
9/6/2014
Property of International Business Association
IBA
Market Update | Are You Interested In Interest Rates
• Investors
move into government bonds when
unsure about the economy
- Move into stocks when more confident
about economy
• When price goes down, yield goes up
• 10 Year Treasury Yield indicator of interest
rate environment
• As economy improves, more pressure on
Janet Yellen and the Federal Reserve to raise
short-term interest rates
Who is affected by interest rates?
What is indicative of economic recovery?
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Property of International Business Association
IBA
Market Update | Economy Recovering?
• Unemployment
Rate
• Fell
to 5.9%
- Lowest level since July 2008
• Misrepresentative
- Doesn’t take into account people who aren’t
looking for jobs
• Still gave the markets a boost
- Indicated positive economic growth
Do you think unemployment should be more
comprehensive?
Who should be included to make it more
accurate?
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Property of International Business Association
IBA
Market Update | Economy Recovering?
• What
are some group-specific trends you
think may be affecting the labor force?
(Hint: there’s one big one)
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Property of International Business Association
IBA
China’s Yuan | Case Study Framework
Situation
Alternatives
Recommendation
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Property of International Business Association
IBA
China’s Yuan | Situation
IBA
• How
does China control its currency?
• What is the evidence that the currency is undervalued?
• How does China’s currency policy affect its people and economy?
• How does it affect its trading partners?
• How does China defend its policies?
9/6/2014
Property of International Business Association
China’s Yuan | Situation
IBA
• How
does China control its currency?
- Buy $1.3T in US treasuries instead of holding USD
• What is the evidence that the currency is undervalued?
- High annual growth, but currency flatlined during growth
- FDI inflow exceeds outflow
- China’s trade surplus with the US
- PBOC holds trillions of USD in treasuries
• How does China’s currency policy affect its people and economy? (Pros vs. Cons)
- Pros
‣ Cheap exports, so there is a high demand for Chinese goods
‣ Jobs
‣ Economic stability
- Cons
‣ Losing rural workforce due to low wages
‣ Less international purchasing power
‣ $1.3T invested in US treasuries…low returns!
• How does it affect its trading partners?
- US/Europe: Trade deficits, manufacturing bankruptcies, cheap financing of deficits, loss of jobs
- Asian Nations: Cheap trade with China
• How does China defend its policies?
- Our growth has nothing to do with the Yuan…it’s all about our cheap labor & efficiency
- We have trade deficits with other nations…this is a US/European problem
- You need our lending
- US is getting cheap goods
- We’re a sovereign nation
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Property of International Business Association
China’s Yuan | Alternatives
• What
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could China do? What are the implications for China and its trading partners?
Property of International Business Association
IBA
China’s Yuan | Alternatives
• What
could China do? What are the implications for China and its trading
partners?
- Slow appreciation (managed float) over some time frame
- Free float system…huge appreciation of Yuan because investors would buy the
Yuan due to China’s strong economic growth
- China’s government could allow Chinese-based companies to invest abroad, which
would reduce the reserve of foreign currencies
- Tex exports to make them more expensive
- Do nothing and keep everything at the status quo
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China’s Yuan | Recommendation
•What
should China do?
•Why?
•How?
•When?
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China’s Yuan | Wrap Up
9/6/2014
IBA
Property of International Business Association
International Business Association | Wrap-Up
 Final Notes
- Start thinking about running for Exec Board positions
* Must pay dues to be considered
- Exclusive networking opportunity this Wednesday at 10:30am – 11:30am
 Next Meeting
- Monday, 10/20 at 6 PM in 106 Business Building
 Connect With Us
- Email:
International.business.pennstate@gmail.com
- Website:
https://www.clubs.psu.edu/iba
- Facebook:
https://www.facebook.com/groups/240901915962407/
- LinkedIn:
https://www.linkedin.com/groups?gid=4990570&trk=vsrp_groups_res_name&trkInfo=VSRP
searchId%3A1464695501410746136464%2CVSRPtargetId%3A4990570%2CVSRPcmpt%3
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9/6/2014
Apple Confidential - Strictly Need to Know
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