MNB3701 Assignment 2 (COMPLETE ANSWERS) Semester 1 2025 (884546)- DUE April 2025; 100% correct solutions and explanations.

MNB3701 Assignment 2 (COMPLETE ANSWERS) Semester 1 2025 (884546)- DUE April 2025; 100% correct solutions and explanations.Government Intervention in China China is using its economic might to invest in Africa. China’s ability to focus on dominating key industries inspires both fear and awe throughout the world. A closer look at the solar industry in China illustrates the government’s ability to create new industries and companies based on its objectives. With its huge population, China is in constant need of energy to meet the needs of its people and businesses. As a result, the government has placed a priority on energy related technologies, including solar energy. China’s expanding solar-energy industry is dependent on polycrystalline silicon, the main raw material for solar panels. Facing a shortage in 2007, growing domestic demand, and high prices from foreign companies that dominated production, China declared the development of domestic polycrastalline silicon supplies a priority. Domestic Chinese manufacturers received quick loans with favourable terms as well as speedy approvals from the government. One entrepreneur, Zhu Gongshan, received $1 billion in funding, including a sizeable investment from China’s sovereign wealth fund, in record time, enabling his firm, GCL-Poly Energy Holdings, to become one of the world’s biggest in less than three years. The company now has a 25 percent market share of polysilicon and almost 50 percent of the global market for solar-power equipment. How did this happen so fast? Many observers note that it was the direct result of Chinese government intervention in what was deemed a key industry. Central to China’s approach are policies that champion state-owned firms and other so-called national champions, seek aggressively to obtain advanced technology, and manage its exchange rate to benefit exporters. It leverages state control of the financial system to channel low-cost capital to domestic industries—and to resource-rich foreign nations whose oil and minerals China needs to maintain rapid growth. Understanding the balance between China’s government structure and its ideology is essential to doing business in this complex country. China is both an emerging market and a rising superpower. Its leaders see the economy as a tool to preserve the state’s power, which in turn is essential to maintaining stability and growth and ensuring the long-term viability of the ruling Communist Party. Contrary to the approach of much of the world, which is moving more control to the private sector, China has steadfastly maintained its state control. For example, the Chinese government owns almost all the major banks, the three largest oil companies, the three telecommunications carriers, and almost all the media. China’s Communist Party outlines its goals in five-year plans. The most recent one emphasizes the government’s goal for China to become a technology powerhouse by 2023 and highlights key areas such as green technology, hence the solar industry expansion. Free trade advocates perceive this government-directed intervention as an unfair tilt against the global private sector. Nevertheless, global companies continue to seek the Chinese market, which offers much needed-growth and opportunity. Sources: Adapted from: “International Business by Carpenter, MA & Dunung, SP, Open Textbook Library, University of Minnesota is licensed under CC BY 4.0 Saylor URL: Please read the above case study and answer the following questions: Question 1: 1.1 Explain the political system followed in China? In your answer, provide statements from the case to substantiate your answer. (4) 1.2 Explain the influence of the political system in China, as identified in question 1.1, on conducting business in the solar industry of China? In your answer, provide three statements from the case to substantiate your answer. (6) 1.3 Identify and explain a modern trade theory as covered in this module. Then apply the role of the Chinese government in the growth of the solar industry in