Intrenational and Pacific Asian Business - Essay Example

International and Pacific Asian Business Introduction to economic development of China and contrast with another country in pacific Asia (Japan) China which is one of the major economical powers today was not even known by the world before 1949. They developed themselves in the period of 30 years that was from 1949-1979 and improved their living standards to enter into the competition with the rest of the world. One of the major reasons for the rapid growth of China in the international market is the efficient work force labor and grip on their cultural activities. On the other hand Japan, which is known as third largest in the world raise their economy through the huge industrialization between 1880s and 1970. Their land has inadequate natural resources that help them to raise their economy. During this era they improved their per capita income and became one of the world powers. More importantly, there two nations are very strong in their beliefs and faiths. They followed their culture and traditions even after becoming world power and this highly supported them in terms of maintaining relationships within their country and with rest of the world. Cultural role in the economic development (Confucianism and Guanxi) Guanxi and Confucians are the two major terms that are used to explain the cultural values of China. Guanxi means “relationships”. It means to develop relationships within the businesses and exchanges done by the Chinese people. In China, there is high tradition of building good relationships for the long term dealings. Guanxi played important role in the high performance and improvement of the economy because they believe that one’s if you are in business relationship with other party then it will surely reduce their frustrations, risk and various elements associated to it. They ensure to establish successful business among themselves. The Guanxi culture is highly practiced in China because they believe on creating trustworthiness on the very first side and they don’t talk in terms of money. It is the part of their culture and not considered as illegal. This culture helped in establishing good terms with the others even they are performing business in home or any host country. It is also observed that companies that are performing their business based on Guanxi culture they are high on performance as compared to those companies that fails to establish good relations with the parties involve in their business. Confucianism states that there should be hierarchal relationships that should be followed in the society and this will lead to social harmony and avoid war. They organized the society under the peaceful moral codes that brings stability to their society and relationships and protect them from outer influences. In businesses they value obedience and admiration to the one who is superior to them. The development start from the home first because if members of family will live their life by giving respect to their elders and follow them then this will be perform by every individual. Therefore, the training of manners and collectivism is given to them form very first they of their lessons and this is carried out throughout their lives and even in their businesses. And this practice causes the development in their economy because they treat others in the welcoming way. Economic history since 1950 During the period of 1860 and 1905 Christianity (Protestant) grew rapidly in China and they established various missionaries (more then 3500) by 1905. This was the time when Christians ruled China and that was Chinese Christianity. But due to the two great wars in China that was The Great Depression and the Chinese civil war in late 1940’s, the Chinese Protestants ruling felled and by 1949 new political regime force came into being and this was yet another humiliating time for Chinese people. This 1949 time was the time for China because their economy was in bad condition. Due to the war of 10 years the inflation rate was at high and industrial output was dropped hugely by 75% since the year of 1937. The currency of china was badly hit due to this and this was very traumatic condition for the citizens of China. After this worst situation, China introduced new currency and controlled it strictly in order to create stability in their economy. This new policy was known as Communist Economic Policy. In 1950, the government introduced Agricultural Laws knows as “Agrarian Reform Law” and this was yet another hard time for the people of China but with ups and downs the social life of China turned into Communist in 1958. People worked collectively on fields and created a big share in improving the economy. After this the industrialization ear came and by 1957 they improved much more by establishing first five year plan and by focusing on educational resources. Since then the time for revolutions started in China. And then in 1972, another great powerful country Japan recognized China as legitimate government and by 1976 China entered into the international market that hugely brought stability into the economy of China. Whereas there was the boom in the economy of Japan during 1950s and this was due to the supply of goods needed in the war of Korea. By 1970 Japan improved so much that it had overtook the economic of Europe. They improved their various sectors that include education, health, employment, civil, and even the crime rate was low in Japan. This all improved the economy of Japan even though it’s a land of volcanoes but they are the super power. Role of Politics in Economic Development Politics of these two countries played an important role in the development of economy because both the countries took their every sector with respect to their culture and their culture. Their culture was based on communism which means that they don’t work individually, they work collectively and they are more subjective in nature. They focus on means rather then ends and they take intentions into consideration rather then the result of anything. Therefore the politics and the political party think of their people first and then other thoughts. For them, the safeties of citizens are the priority. Their crime rate is low because of the protection of human rights. In 1978 the Chinese economy improved lives of many Chinese citizens by providing them health care, employment, educational and various facilities and they protected the laws of individuals. In politics, China improved their legal and human rights system. Japan has no federal system but their legal systems are so active that it has positively affected the economy of Japan. Due to the development of Cultural Revolution, the great leaders of China established proper legal system to stop all illegal acts that can affect the stability of China. In 1982, National People Congress established the rule through which any crime or unlawful act is done even by any political leader then he/she is accountable. Moreover, the human right issues are well settled in China because they keep monitoring the various illegal or criminal acts so that rights of individual should be protected. Those religions that are mentioned under their act can perform their activities other then if some new religion is formed then it would be subjected to harassment. East Asia Crisis 1997 East Asian Crisis was supposed to be the major crisis in the global perspective and that crisis was due to financial crisis that occur in the major regions of Asia. According to UN general Kofi Annan “The Asian Financial Crisis became the global social, economical and political crisis that has created distressing crash on societies across the globe. Those who were in vulnerable condition were now even in worst condition and this hugely affected the economy all over the world”. Due to this financial crisis many Asian countries were affected which includes Tiger Economies (South Korea, Taiwan, Singapore and Hong Kong), Tiger Cubs (Thailand and Malaysia), the giant Japan and China who were the major sources of bringing business to Asia due to free market but this crisis affected them all. But in the period of 1975-1997 three big countries Singapore, South Korea and Hong Kong did progress in human development. Due to this financial crisis GDP growth, poverty and unemployment became more visible for those countries that were affected by this crisis. The IMF and G7 countries placed the blame on ills of East Asian countries. This all was due to the establishment of conventional system that was the capitalism that causes the over-speculation, involvement of governmental bodies and businesses, and the high exchange rates. Post Crisis Period When the East Asian crisis held then after that there was devaluation of currency and the floating. But after this period the currencies mostly stabilized in few years. The reduction in the currency was temporary in correspondence with US currency. One of the reasons that could be identified was the macro economical changes which cause the instability and the economy of Japan became stagnant whereas the economy of US was on its boom. After this crisis the interdependency among few East Asian countries increased especially among ASEAN. In short, when a policy is change in our country its effect is on the other countries because the economic connection was so closer. Recovery and success driven by China China after this all crisis in the East Asian region, China created their stable position by performing the business activities in peaceful manner and by making good relations with the rest of the world. China became one of the largest economies in the world and the third largest trading nation by providing their services to others. This helped in steady and rapid growth in the performance of this region and the East Asian region improved their stability by the growth of China and Japan. These two countries created a big share for the growth of the market. Conclusion After understanding and going through the whole situation, we can summarize that China being the world super power played a very vital role in the performance of the economy in East Asian region. They created their long term relationships with the rest of the world. Even when the USSR was split and Russian Federation came into being then even that time China established good relations with everyone. Their success is because they keep their policies and culture side by side. Their friendly attitude towards others and welcoming nature improved their market position. China faced great boom in the history but with every boom in the economy there is always a fall too. Good part was that China was able to gain the sustainable position in this world by its abilities and skills. On the other hand, Japan after the great natural disaster of Earthquake they improved their position in the market due to the crisis management strategy. International business in China is improved due to the cultural contexts. As China is the biggest market therefore internationally many firms try to establish their good reputation in their region and for this negotiation with Chinese people is another art because it is difficult to deal with China due to their cultural barriers. Bibliography Hasan, R. (2001), "East Asia since the 1997 crisis", International Socialism Journal, no. 92. http://pubs.socialistreviewindex.org.uk/isj92/hasan.htm Hooker, R. (1996), The Chinese Communist Party. http://wsu.edu/~dee/MODCHINA/COMM2.HTM Bays, D. (2002), China, Religion, and the World Economy. http://www.cpjustice.org/stories/storyReader$803 Dr. Sprunger, M., An Introduction to Confucianism. http://urantiabook.org/archive/readers/601_confucianism.htm (2010), Japanese Industrialization and Economic Growth. http://eh.net/encyclopedia/article/mosk.japan.final (2008), Chinas Economic Development. http://www.china-un.ch/eng/qtzz/wtojjzk/t416412.htm Cowan, C. D. (2006), The Economic Development of China and Japan, Routledge, Great Britain. http://books.google.com/books?hl=en&lr=&id=z_MWSRiNmYwC&oi=fnd&pg=PA9&dq=economic+development+of+china+and+japan&ots=aGqidxBMVj&sig=I5K4W296Aa9m2ZjpS6RMLuEwjbI#v=onepage&q&f=false Ambler, T., Xi, C. & Witzel, M.(2009), Doing business in China, 3rd ed, Routledge. http://books.google.com.pk/books?hl=en&lr=&id=x2HUTtxUW0wC&oi=fnd&pg=PP1&dq=business+with+China+and+japan&ots=6x-Dcd2ZCA&sig=m-CHWw2fMMYVuHgPw41x5BgM_Xw#v=onepage&q=business%20with%20China%20and%20japan&f=false Read More