Chinese crackdown on its tech companies has taken the world by a storm.
Not only have they led to billions of dollars worth erosion from Chinese markets, they have also led to stock tumbles in offshore markets like in the EU, Japan and the USA.
Read more about the motivations behind these so-called “tech lashes” and the market mayhem they have caused so far by clicking on the link below.
https://transfin.in/whats-behind-the-growing-chinese-crackdown-on-tech-firms
International trade can seem tricky even in the most developed economies, so foreign investors need to be vigilant when investing in global markets where political risks are difficult to discern.
With the rise of trade between emerging markets and developed markets such as Canada, the challenge of political risks has become more pronounced in the past few years.
For example, these emerging markets have over time become a consumption hub that creates a lot of opportunities for foreign investors.
Conversion and Transfer Central banks and foreign governments can prevent the transfer of their hard currency or decide to prohibit or restrict the conversion of their money to a foreign currency.
Either way, an enterprise can lose its assets or foreign investment.
Political Risks to Consider The impact of any of these political risks on a foreign investor is short-lived or isolated, and it can ripple across the entire firm and aggravate other risks.