Imagine you are the CEO of a Chinese mobile phone company. The phones are assembled in China with some critical components: Trade Finance Assignment, NUS, Singapore

Question 1

Imagine you are the CEO of a Chinese mobile phone company. The phones are assembled in China with some critical components sourced from Ukraine. 50% of the finished products are sold in China, 30% in the US, and 20% in other markets around the world.

• With the military conflict in Ukraine, trade war, and geopolitical tensions between the US and China, what international trade risks will you likely face? Illustrate the risks, both with your suppliers in Ukraine as well as customers in the US?
• Your Ukrainian component supplier asked for payment in advance instead of an open account system that both companies have been using. Apply your knowledge in trade finance and explain why you should or should not accept the request. After that, follow up by putting together an email reply to the supplier on your decision. You can also suggest alternative trade finance arrangements.

Question 2

Briefly describe the organization you are working at or one you are familiar with. This company should play a role in the global supply chain network.

• From a trade financing perspective, show why it is important for this organization to build strategic two-way relationships with its financial providers.
• What are the 5Cs of credit? When financial providers assess the 5Cs for this organization, determine which of the Cs will likely be assessed most favorably and which is likely to be the most unfavorable.