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Situation: Australia and New Zealand Banking Group (ANZ) found China and India have a potential investment...

Situation: Australia and New Zealand Banking Group (ANZ) found China and India have a potential investment for ANZ

Explain the key factors that may affect the opportunity of FDI in China and India. This includes Entrepreneurship, Financial system, Corporate debt ratio (financial soundness), etc.

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Expert Solution

Foreign Direct Investment (FDI) is considered to be the vital component of economic development especially for the developing and underdeveloped countries like India and China. FDI is imperative for the economy as it is a momentum of growth, strengthens domestic capital, generates employment, augments productivity, and encourages more exports through up gradation of technology and many more. Thus, there are many more determinants which lead to increase or decrease in the flows of FDI in any economy.

GDP of the country, gross capital formation, capital infrastructure, external debt, export and import volume are the major factors that significantly influence foreign capital inflow into the two highly populated, fast growing Asian countries India and China.

jeff jeffy answered 2 years ago
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