Case | HBS Case Collection | March 2006 (Revised November 2006)

China: To Float or Not To Float? (E)- ABB Investment in China

by Laura Alfaro, Rafael M. Di Tella and Ingrid Vogel

Abstract

In July 2005, China revalued its currency by 2.1% and adjusted its exchange rate regime toward a more market-based system. ABB, a global power and automation technologies company based out of Switzerland with operations in China, was among those companies confronted with the challenge of addressing the revaluation of the yuan and the possibility of future appreciation. Provides background on ABB's activities in China as well as incentives provided by Chinese officials for multinational corporations to move inland.

Keywords: Currency Exchange Rate; Investment; Multinational Firms and Management; International Relations; Problems and Challenges; Value Creation; China; Switzerland;

Citation:

Alfaro, Laura, Rafael M. Di Tella, and Ingrid Vogel. "China: To Float or Not To Float? (E)- ABB Investment in China." Harvard Business School Case 706-035, March 2006. (Revised November 2006.)