The purpose of this assignment is to provide you with an opportunity to research and analyse two trading partners of Australia.

Assume that you work for a company that is planning to move its factory to one of the two biggest international markets of the company in mid-2015. Assume that your factory would need to employ semi-skilled labour and is highly labour intensive. The output of the production will then be sold in that country with the intention that at least 80% of net profit generated from sales will be repatriate back to Australia. Your CEO has requested that you present a report to the Board of Directors, comparing the two countries and recommend which country would present a lower risk for such a plan to work in that country.

Present a report of approximately 1000-1500 words recommending which of the two countries is conducive for such a plan.

You should address the following issues in your report:

1. The nature of trade and status of relationships of the two countries with Australia. Is there an existing free trade agreement? If yes, what does it covers?

2. Your assessment of the exchange rate between Australia and the two countries you are considering and any predictions you have about movements in these exchange rates over the next 6 months- 1 year. Support these predictions with your own research and economic models of demand and supply.