Keywords: investment risk, geopolitical risk, economic growth risk, balance of payments risk, political and social risks

Investment risk in China is low and is expected to remain low through 2006. Geopolitical risk is moderate. China's deteriorating relations with the U.S. are contrasted by improving relations with Russia, Iran and with Latin America's left-leaning countries. The extremely high economic cost of confrontation between the U.S. and China argues for a prolonged detente-style relationship between Washington and Beijing.

Economic growth risk is low. Economic growth rates in excess of nine percent annually are nothing new in China. Economic growth, supported by sound fiscal accounts, will remain very strong over at least the next several years.

Balance of payments risk is low. China will continue to add to its enormous foreign exchange reserves. External borrowing, speculative capital inflows and continued strong foreign direct investment will complement continued current account surpluses.
Like all countries, investment risk in China will become extremely high if Washington takes military action against Iran or North Korea. The risk of such military action is rising. Appeasement by both Iran and North Korea to Washington's demands to abandon their nuclear ambitions is becoming increasingly remote.

Topics covered include:
--Geopolitical Risk
--Political and Social Risks
--Economic Growth Risk
--Balance of Payments Risk

                                                                               Source: http://findarticles.com/p/articles/mi_m0EIN/is_2005_Oct_24/ai_n15728967