Business Opportunities in Asia - Assignment Example

Running Head: Business Opportunities in Asia Business Opportunities in Asia [Institute’s Business Opportunities in Asia Scope of Business in Hong Kong under China’s Impact: It surely is not a pleasant experience for any person to see his country go under the dominancy of another country. The morning of July 1, 1997 was the one when many people witnessed the open invasion of China in Hong Kong and they listened carefully as many politicians raised the flag of democratic rule in the country. The Chinese communists were not the major and dominating party in Hong Kong. Hong Kong’s economy remained on top as compared to many big names in the world of economy and therefore it quickly became a safe point for the Chinese businesspersons to put their money on. During late 1997, Hong Kong became the fifth biggest financial having higher GDP per capital than United Kingdom. Most of the people in Hong Kong tend to manage with the ongoing changes around them and hence those who started some business on small level reached big and broad level very soon (Liberty magazine, 1997). The government of Hong Kong does not comprise of any specific rules and regulations in the world of business and all the cases related to business are taken care one by one. The possible reason for not having any rules for business is that the people of Hong Kong are only concerned about business and not politics and because of this, the business tycoons join the government instead of overlooking it. In fact, nearly 50% of seats in Legislative Council are reserved for the delegates of business and other professionals (LaMoshi, 2005). Due to some difficulties in the economy of Hong Kong, most of the political parties there supported the idea of having healthy economic relation with China. Since there are no formal laws and rules with respect to business in Hong Kong and the prices are still high, most of the international entrepreneurs prefer doing business in China instead of Hong Kong. Government rules do not play a big role on the economy of Hong Kong, but the major businesses in the country have always depended heavily on the political leaders. For this reason, China has always done favors on Hong Kong and has provided significant assistance to the government and politicians. The business-oriented people of Hong Kong do not have anything against the democratic rule and they only go against the government if it does not listen to them. Most of the prosperity and richness in Hong Kong is a result of owning properties and the stock market, as these things make it easier for middle class people to save and earn (LaMoshi, 2004). The people of Hong Kong surely were not pleased with the idea of living under some other country’s rule and political system, and at times, they used to protest against Beijing by marching in form of a large crowd. On July 1, 2003, when six years of Chinese rule completed, the biggest march took place, having 500,000 people marching in opposition to the National Security Bill under the dominance of China. The people of Hong Kong were relieved when Tung resigned and Donald Tsang took his position. Tsang was much more talented and possessed better political talents as compared to Tung and he even took steps that helped Hong Kong recover from years of economic decline due to SARS, bird flu and the Asian economic fall (Ewing, 2005). Before the invasion of China in Hong Kong, British has been ruling it since 150 years and therefore, this invasion relaxed many of the hard practices that was going on. Year 2003 was a flourishing year for Hong Kong as it revived its economical decline and played a big role in modernizing China. Hong Kong played a vital part in developing and maintaining Chinese law, giving ideas about maintaining a healthy relation with foreigners for business deals, and other such things. China has implemented the successful tactics and laws of business of Hong Kong. When the Asian Crisis came into occurrence on the next day of Chinese invasion, many Asian countries faced major problems along with Hong Kong, but it took one big step of maintaining good relationship with China in order to develop its business plan and this business model of Hong Kong turned out to be successful (Leach, 2004). Political System and Its Impact on Business in China: A political system is the base of any country, and under it lays the way a country runs. Despite the changes in the economic system of China, its political system did not face any changes and that system is the authoritarian party-state. Under this political system, there is no limitation in economic system and the government is very dominant on the media and the political associations of China. The people of China together have played a significant role is stabilizing the economic growth and development of China and has made it one of the biggest consumer places of the world. The traditional approaches of China have declined and now the Western implications are widely seen in the political system of China. China has developed itself into a modernized nation by implementing all the latest developments and by running its political system in the same way. Everyone is aware that China is one of the ancient places in the world and had 25 dynasties and many kings and emperors. Therefore, many philosophers and analysts have proposed various political laws for China in order to have a substantial political system in the country (Kane, 2001). Equality plays a vital role in the political judgment of China and therefore, the lower class families have expected to get equal facilities and wealth from country’s economic outcomes (Lau, 1970). China always seems keen in developing business and economic ties with foreigners that has resulted in stable economy for China and it remained unaffected by the East Asia crisis in 1990s. This stable economical development in China has led to vital changes in Chinese people’s lives and its poverty rate decreased from 20% in 1981 to around 5% in 1997 (Lingzhi, 2003). During the time when SARS crisis hit China after 2003, new administration people were appointed in the political system of China at that time and they faced trouble in controlling the crisis, as they did not know much about Western laws. Gradually after 3 months of efforts, the administration controlled the crisis and hence understood that modernization and constant economic growth should be the center of attention (He, 2001). The main issues for all the new Chinese Communist leaders are to control the unemployment in the country, decreasing the superiority of rich people over poor ones, keeping economy in a stable condition and so forth (Shambaugh, 2000). During July 2001, the president of China as well as the head of Chinese Communist Party (CCP), Jiang Zemin, gave a speech in which he gave the idea that the business people should be permitted to join the party if they want to. The Chinese business entrepreneurs proposed most of the economical laws of China when the community of executives came into occurrence. The business class of China is not limited to just one center point and different people start different kinds of businesses. Majority of the businesspersons start their business on small levels and at small places leading to large services. Such businesspersons are usually the ones who were once part of some government association previously (Bush, 2004). It can be said that China follows a centralized political system where any order given by upper level government needs to be followed by the lower level government. Since the size of the country is so huge, it is the task of local government to see what laws and rules need to be imposed on people and which, ones should not be imposed. This means that if upper level government chooses to take care of some project and tells about it to the local government, then the local government has to carry out the command given by the upper government (Fang, 2007). Business Structure in China: The business structure in China falls under three categories: State-owned, collective and private. The first two categories are concerned with domestic dealings while the third one is concerned with people owning Chinese businesses and the foreign executives. The state-owned businesses usually stress on such sectors that are important for economical development like transportation, various industries, communications and so forth. As it has been mentioned already, China can somewhat be categorized as a Communist country, where more than half of the business associations are possessed and controlled by the state. It can be seen that during current years, a big part of the China’s economy has been privatized and the impact of government is still strong over various business dealings in China. History has shown that China has mostly been in control of people instead of plain rules and regulations and despite the improvement in the legal system, the people of China are still seeking for better ways to guard their personal and business lives. Therefore, the businesspersons of China believe in having healthy terms with the government associates in order to have a successful business (Fang, 2007). Future of China: With the growing demand of China in the current market and the population of over 1.3 billion, there is no doubt in the fact that China will surely be a strong country economically and will play a vital role in world’s economy as well. Even though the gross domestic product of China is constantly increasing compared to other countries, its GDP per capita is still lower than the U.S and other thriving countries. The impact of political system of China on the business and economy is surely a noticeable one. Some may label the political system as a “monolithic communist authoritarian state,” “a totalitarian state,” and a “Leninist hierarchy.” References David Shambaugh. (2000). Is China Unstable? Assessing the Factors. M.E. Sharpe. Donald Tsang (2005). Singapores man in Hong Kong. Asia Times Online Ltd Gary LaMoshi (2004). HK business parties fail on economy. Asia Times Online Ltd James A. Leach (2004). Recent Developments in Hong Kong. Second Session. Serial No. 108-125. John Kane (2001). The Politics of Moral Capital. Cambridge University Press. Kent Ewing (2005). Hong Kong democracy movement gets new life. Greater China. Asia Times Online Ltd Kong Lingzhi (2003). Food Consumption and Health Status of Chinese People. International 5 a Day Symposium in Berlin (January 15, 2003), a PowerPoint presentation, the author is an official from Department of Disease Control, Ministry of Health, P.R.C. Liberty Magazine (1997). Questions as Hong Kong is Turned Over to China. Liberty. D.C. Lau (1970). Chinese Revolution. Mencius Book. Wen He (2001). Interest Groups, Path of Reform and Crisis of Political Legitimacy. Modern China Studies, no. 4, 2001, pp. 65-78. Read More