The Journey of Asian Economy - Essay Example

Asia Pacific Business Table of Contents Table of Contents 2 Introduction 3 Discussion 4 The Nature of Economic Agent 5 The Nature of Market Relations 7 The Nature of Work Co-Ordination and Control System 9 Conclusion 13 References 14 Bibliography 17 Introduction During the past three decades, East Asian economies have developed significantly. Their strong financial growth has been one of the pleasant surprises for the entire world. In this essay, Japan and China have been chosen as the two prime representative countries from the Asia Pacific Zone in order to analyze the similarities and differences of their business systems. The journey of Japanese economy is often, philosophically indeed, has been considered as a dream, especially when studying its ups and downs during the period of 1950s to 1980s concerning its rapid economic growth. Similarly, China had also begun showing its hyper-growth during the late 70s. According to a report published by The World Bank (2009), it had been observed that the economic performance of Japan and China are even better than that of their complementary countries such as the United States of America and other European countries. In order to recognize the characteristics of business systems currently practiced in Japan and China, it is essential to understand the concept of business system beforehand. Apart from this, culture is also regarded as one of the most crucial factors, which influences business systems directly, as an effective impact can be observed on the economy too. Moreover, internalization has also changed the nature of business systems for more than a couple of decades (Yeung, 2000). Discussion In accordance with Padmalingam (2000), Japan and China both share a substantial percentage of similarities that is identifiable in terms of their cultures and social systems particularly owing to their geographical positioning. As a result, over the years, these countries have developed similar characteristics in terms of religion, culture and national identity (Padmalingam, 2002). Besides, it has also been observed that both the countries share almost similar value systems, which have influenced each other on several occasions, quite apparently. However, a critical analysis of the phenomenon revealed that both the countries, i.e. China and Japan, on their path of development, have come to follow two completely separate modern civilizations in order to develop economic policies, especially in the post World War II period. These variances can be framed with the help of different business cultures and varied patterns of economic systems. During the transition period of the post war economic system, it has also been observed that the governmental authorities in Japan and China had a commanding role in order to support the growth of domestic firms to ensure the sustainability in the world market. As an effect, it enhanced the level of contemporary opportunities and threats of both the countries (Chan, 2002). Simultaneously, it has been observed that during this transition phase, China and Japan, both have emphasized improving the gross productivity of their country. In order to do so, both the courtiers have focused on manufacturing domestic products and/or services along with the rapidity of technological innovation. As a consequence, it is commonly perceived that China has improved its import and export position in the global market. The fact that China holds the third position as an exporter in world import and export market, as per 2010, which is after the US and Germany, also justifies the notion completely (Story, 2010). The Nature of Economic Agent Throughout the 19th century, Japan has been observed to straggle to industrialize its business system competing in the global forefront. To an extent, it has evidently succeeded due to the participation of various domestic factors, including the communities, governmental bodies and individuals along with business entities among others. Even then, during the late 20th century, it was observed that the pressure of globalization has influenced the performances of the business systems practiced in East Asia to a considerable extent (Ohno, 2006). As per observations, it has been revealed that the traditional approach of Japanese business culture has extended the performances of its unique business system. In accordance with Li & Putterill (2007), most of the Japanese are noted to prefer conveying their business thoughts in a silent manner rather than expressing their thoughts openly. Moreover, it has been observed that Japanese regard their perception more preciously rather than praises from others. Apart from this, Japanese diversified business activities have helped Japan to enhance its capabilities as an economic agent (Li & Putterill, 2007). The trend of the Chinese economy can be defined as enormously complex wherein the larger organizations had dominated the entire industrial production of China for almost fifty years denoting a monopolistic business structure. Subsequently, in the later phase, the Chinese government had introduced the socialist market economic policy, which ensured high growth rates of Gross Domestic Product (GDP) in the following decades (Ge, 1999). This transformation evidently changed the phase of Chinese economy almost entirely. Subsequently, China has ensured its position in Asia Pacific’s Special Economic Zone (SEZ), by promoting import-exports along with encouraging inward investment towards the nation. In this regard, the traditional activities of buying and selling within the businesses have helped China to grow its economy. As a consequence, it has been observed that over the next few decades, China’s GDP and per capita income level has improved at an annual rate of eight percent on an average. Simultaneously, it has also been perceived that 400 million Chinese people were lifted from poverty level with the virtues of the modern business system (Ge, 1999). Moreover, Chinese firms relied on particular skills and potential industries for its economic and financial growth in the global peripheral. During the end of World War II China had been permanently stuck in the trend of global interdependence, especially owing to its active involvement in political leadership and power distribution decisions. It was at this phase that China was engaged in developing their relationship with the US in order to reform its power in the global economy. Correspondingly, alliance with the western countries has helped China to cultivate their powers in global market for a sustainable business (Morrison, 2013). After the Second World War, the US became one of the major powers in the Asia-Pacific region. Several countries in the Asia-Pacific region were largely relied on their conservative military power, political influences along with nuclear umbrella to empower their abilities to secure their borders from any external threats. In this context, the development of China can be considered as an obvious example for the radical transformation in the past fifty years (McDougall, 2007). Comparing and contrasting Japanese business system with that of the Chinese system, it has been evident that Chinese business system has been able to integrate a unique form of capitalism structure in order to meet the objectives of innovation rapidity, adaptability and efficiency. These aspects of the business in the Asia-Pacific region have developed Chinese position in terms of financial strength. As per the findings obtained from the discussion conducted above, it has been observed that over the past few years, Japanese business organizations have emphasized its interconnected business network in order to establish a healthy relationship with its shareholders. This interconnectivity has helped the organization to enhance its risk taking capabilities and grow in the international market. Whereas, Chinese organizations have specially concentrated on competitive advantages in order to establish a global recognition (Bensley, 2010; Redding & Witt, 2008). The Nature of Market Relations Domestic society is a base through which, new foreign systems are introduced. Observably, each society has its unique characteristics of reflecting its ecology. Moreover, it has also been observed that Japanese domestic society has its specific logics and mechanisms that are further used to evaluate their internal business system. For example, during the 20th century, it was observed that Japanese have responded successively to the external surprises in a tactful manner, which signifies the positivity and growth of the Japanese economy. Furthermore, it has also been perceived that the Japanese business system is often inclined towards preserving their national identity in a significant manner during this period (Ohno, 2006). When a country joins the global market, translative adaptation is required to develop the business system which was also observed in the case of the development of Japanese business system. Translative Adaptation is a traditional culture along with social structure, indicating the best practice during internationalization. When assessing the same in the case of Japan, it has been observed that the country had to face severe challenges from the western countries for which, adoption of translative adaption policies in their business approaches became important (Blustein, 2005). In order to improve the business system of Japan, people have emphasized towards the agricultural productivity with much significance in the current phenomenon. It has been observed that Japanese farmers try to avoid long term tax burden in order to ensure their independent movement, which has again contributed to the unique shape of their business system. Apart from this, Japanese government has framed particular agricultural laws and regulations according to ad hoc responses (Ohno, 2006). In the context of transportation and commerce, Japanese have also designed their official highways and sea lines in order to ensure the sustainability of their business system. In order to develop the trade sector, Japanese have developed cash crops production along with handicraft items in their business systems. At the same time, Japan has also confirmed the import-export duties in order to maintain the international transportation and commerce control. On the contrary, some rivers were intentionally left without bridges in order to prevent the entrance of their potential enemies (Ohno, 2006). Concerning its overall performance in the recent few years, in Japan, the overall industry performance has improved considerably. It has also been perceived that every region within Japan has its unique products, which were marketed all over the country. Besides, it has been identified that in order to enrich the native populace and enhance the tax revenue, the Japanese have promoted their indigenous industries, adding to the unique features in their business system (Ohno, 2006). In accordance with Kim (n.d.), Japan was the first East Asian country to have implemented successful industrialization strategies in its business system. During this period, the leading perception of Japan’s industrial policy had specifically emphasized towards the growth of people and the economy of the country (Kim, n.d.). Simultaneously, it has been witnessed that Japan had concentrated on its overall economic development in order to ensure the stability of its macro economy in the global marketplace along with human capital development and economic infrastructure improvement (Ohno, 2006). During the 19th century, Japanese banking system was criticized as roughly managed, which demanded reshuffling of the then business system to adopt a contemporary orientation. In accordance, the initial policy of the national bank was taken from the US, which was not implemented successfully. Following this failure, during the year 1882, Japan established its central bank in order to stabilize the financial sector of the country, thus forming a crucial and integral part of its modern business system. During this phase, new banking laws and financial regulations were implemented in order to reduce the financial threats and challenges, which have extended the vertical co-ordination, outputs and risk sharing capabilities of Asian countries through ensuring strong relationships between suppliers and customers within industry (Ohno, 2006). The Nature of Work Co-Ordination and Control System As China’s capabilities have grown astonishingly, it has been observed that China’s political and global stress has increased to a substantial extent. Observably, China’s international relations including its military power and position have been threatened by the foreign communities at often instances. During this phase, China has remained much concerned about strengthening its economy along with its military power. Thus, China has tried to enforce rules in order to protect the sovereignty in case of any emergency or attack. On the other hand, China has established a healthy relationship with its neighboring countries such as India, Pakistan and Bhutan with the intention of ensuring a bilateral beneficiary agreement for the future, shaping its internationally expanding business system. Moreover, China has also been able to mark its presence amid the world’s most powerful nations like the USA and the UK to avoid threats and challenges owing to its modern business system (Mearsheimer, 2001). The Sino-American relations have been of neither an ally nor an enemy, as the US government considers China as a major competitor in different spheres including economic growth and business development among others. The US is identified as the world’s greatest power and on the other hand, China is recognized as the emerging country with greatest power. Thus, the relationship between the US and China has been skeptical due to different factors that include political interests, sovereignty and balance of power among others (Kim n.d.). During the post 1960s, it has been observed that the US has brought wide range of strategic options that include open market operations, foreign direct investment and advanced technology. It is in this context that China has supplied low-cost labor and labor-intensive components in order to maintain the global manufacturing supply chains. China has also focused on the rapidly growing market in order to enhance the productivity. Additionally, the diversification of business entities on a global context has also assisted in developing the technological conditions of China in an enhanced manner. Accordingly, it has been also observed that China has been facilitated with the opportunity of adopting high range technology and applied research methods with the development of business entities. Simultaneously, China has relied upon the efficiency of human resources and higher-education spectrum for the growth and development of working relations (Garrett, 2006). During the early 21st century, it was perceived that the radical power has shifted towards Asia-Pacific region. While, the US remained occupied in dealing with the issues of the Middle East with the terrorism issues, as an effect, it was observed that the terrorism issues have created political discomfort and religion related issues within the nation. On the other hand, during this phase, China was observed as highly emphasized towards developing its economic independency as well as political and military powers in order to maintain its good working relations with the foreign countries. Due to the involvement of various non-governmental bodies such as business entities, religious groups, educational institutions and the media, China has been able to ensure a remarkable position in the form of its modern business system, integrating the transformation of Sino-American foreign relations to a large extent. In addition, China has established a better working relationship with many other regional countries that has further enriched its business system to a substantial extent. This expansion and strong working relation is possible in China due to the strong centralized decision making process (Spence, 2013). According to the study, it has been observed that the nature of East Asian business system has transformed quite significantly in the recent phenomenon. As per the study, it has been evidently observed that the characteristics of Asia Pacific business system has formatted into an intra and inter firm business network. Moreover, observations in this context reveal that Japan and China have established a strong state and personal relation in order to ensure the existing configuration of Asian business. This implies that the manager-worker distance is minimized in the business organization for proper effective coordination (Bensley, 2010; Redding & Witt, 2008). On the other hand, it has been identified that Japanese firms have adhered to a more indigenous culture of collective groupism, rather than capitalism as witnessed in the case of China. For instance, Lenovo Group Ltd, which is one of the leading Chinese multinationals, has extended its business operations in the global market place through rapid innovation and efficiency following a capitalistic notion as common to the Chinese business system. On the other hand, Japanese automobile company, Nissan Motor Corporation, has also operated its business in global marketplace through its unique and dynamic approach, but following a more collective approach than that observed in the case of Chinese organisations. Perhaps, it is owing to this particular reason that the firm has been able to gain its command in the Asia-Pacific region but lacked similar competency in the global market, while Lenovo has grabbed a considerable portion of the global market share through its aggressive approach. Thus, it can be asserted that through employee and employer interdependency and by adequate supervision, China has ensured its command over the global market (Bensley, 2010; Redding & Witt, 2008). Conclusion With reference to the above study, it can be argued that even though China and Japan have faced several threats and challenges from the internal and external environmental factors, such as conflicts for diplomatic differences, political instability and religious riots, both the countries have established successful business systems with their competencies in adaptability, innovation, and efficiency. During the end of World War II, Asia-Pacific region was identified as a prosperous economic zone owing to which, most of the large-sized international organizations have tried to establish relational bridge through the help of education institutions, business entities, religious groups and through the help of media among others in these countries. Undoubtedly, this particular aspect later emerged as a major component of the business systems used in China and Japan while their notional approaches are observed to differ substantially. For instance, while China emphasized towards industrial development in order to enhance the influence and impact on education, commerce and religious aspects, during the early 21st century, Japan had to face several challenges in its domestic market, hindering its global expansion as aggressively as China. This particular key finding from the study reveals that even though located in the same regional periphery, because the ideologies of these two countries differ substantially, their business systems are also observed as polar opposite and distinguishably performing. References Bensley, T., 2010. Nissan: The Japanese Business System in a Globalised World. Cross-sections Vol. 6, 43-57. Blustein, P., 2005. China Passes U.S. In Trade with Japan. The Washington Post Company. [Online] Available at: http://www.washingtonpost.com/wp-dyn/articles/A40192-2005Jan26.html [Accessed July 29, 2014]. Country Data, 1994. Patterns of Development. Revolutionary Change. 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