Final answer:
A German automobile maker looking to build a manufacturing facility in China will need to exchange euros directly for renminbi in the foreign exchange markets to cover local costs. This currency exchange is critical for handling payments for land, labor, and other operational expenses in China.
Step-by-step explanation:
A German automobile maker looking to buy land in China to build a manufacturing facility will need to engage in currency exchange. Specifically, the automaker will need to exchange euros for renminbi, which is option 2, since euros are the currency of Germany and renminbi is the Chinese currency.
This is necessary because costs such as payment for the land, local labor, suppliers, and compliance with local regulations must be dealt with in the local currency.
Firms operating internationally often have to take part in foreign exchange markets to facilitate their business operations. A Chinese firm earning U.S. dollars through export activities would need to exchange these for Chinese yuan to cover their domestic costs. Similarly, a German automaker in China would provide euros and demand renminbi to manage its operations within China.
It is not required for the German automobile maker to exchange euros for dollars and then dollars for renminbi, nor is it necessary for the company to become a foreign tourist to complete the currency transaction, as they would directly engage in the foreign exchange market for their business needs.
Therefore the correct answer is 2) Exchange euros (German currency) for renminbi.