Question

Respond to this discussion post:

Hello,

When you reflect on the advantages and disadvantages of China issuing equity outside of China, what do you think could be the impact internationally?

Answer 1

Advantages of China issuing equity outside China:

• This will help them in increasing their capital.
• It will help in attracting a large number of investors.
• Issuing equity outside the country will encourage more financial innovations.
• Concept of economies of scale will prevail in this situation that results in low cost of production and more product innovation.
• Consumers will get a wide variety of products and services internationally.
• It will also improve competitiveness also.

Disadvantages of China issuing equity outside China:

• It may result in high level of risks.
• There can be conflicts due to different interest rates.
• Due to wide approach, there are more chances of miss-management.