Political and Economical Developments in Asian Systems - Essay Example

Political and Economical Developments in Asian Systems How Political Systems Differ: Political system which consists of mainly certain interest group such as political parties , social organizations , political activists and the rules and regulations in which these institutions are designed to function. Political system differs from nation to nation depending on the factors such as colonization, elements of pride in nation and wealth situation of the nation. There are several forms of system such as socialism wherein the majority of the wealth of nation is owned by the state, where as in case of democracy the supreme power is vested within the people, and in communism the wealth is equally distributed among the people, and country’s following capitalism states that people are free from the intervention of other people for carrying out their wishes.

The kind of political system that exists in a nation also influence the kind of legal system that is followed in the country for example in china the judiciary follows orders from the state but in America or India judiciary is an independent body run by its own legal framework. Factors that Determine the Level of Economic Growth: There are several factors which determine the level of economic growth of a nation such as the 1) Investment – Countries such as China and India has seen a robust growth in investment over the past decade. 2) Human capital –India with its large numbers of English speaking crowd attracted outsourcing of back office jobs from western countries.3) Trade Barriers – Asian countries such as India and china which stayed away from market liberalization for a long time opened their gates for liberal trade since past two decades. 4) FDI and FII’s - Foreign direct investment and Foreign institutional investors plays an important role as these investment over a period of time results in self generated wealth creation within the country. 5) Political stability – Political stability of a nation helps in economic growth as the country attracts more FDI and FII’s and also the positive business sentiments will be high for these nations.

Macro Political and Economical Changes: Over past two decades there has been significant macro political and economic change visible. On the political front the importance of European Union has been increasing over the past decade. The United States got engaged in two major wars post the world trade centre attack. With respect to the economic front United States underwent a major economic crisis during 2008 along with Europe and other developed nation where significant wealth was drained of from the world.

China narrowly escaped the crisis even though their exports are being hit hard. Indian service sector was hit, but the country’s economy not only escaped negative growth but also bounced back as most of its revenue was depended on domestic consumption unlike china. Transition Economies to Market Based System: Transition economies such as China and India are moving towards market based economies where the prices of the commodities are determined by a free price system. During early seventy’s most of the sectors in china was state run.

But from early ninety’s the situation changed dramatically due to the economic reforms put forward by the nation, these reforms were developed mostly internally and not with help of a foreign advisory group. As a result of the shift china has witnessed eight percent growth rate for over two decades. Similarly post 1991 India also started to gradually shift towards market based economy with significant positive change in literacy rate and per capita income as a result. There also have been negative sides to these changes such as increase in labor cost which in turn has put pressure on the exports as China was dependent on cheap and fast exports. . The real challenge is to sustain that level of growth.

Factors such as inflation and widening economic disparity are a cause of worry for Asian countries like China, India and Singapore. The central banks of these countries should realize that over a period of time they will have to strengthen their currency and should depend upon higher value added exports than merely depending upon purchase power parity as an advantage for trade. Works Cited Qian Yingyi (2000) China's Transition to a Market Economy: How Far across the River? [Online] Available at: http://cenet6.nsd.edu.

cn/userfiles/2009-9-16/20090916234149833.pdf [Accessed 26 May 2011] Verma S. K. (2001) Judicial System and Reforms in Asian Countries: The Case of India [Online] Available at: http://www.ide.go.jp/English/Publish/Download/Als/pdf/03.pdf [Accessed 25 May 2011] Forbes J Kristin (2004) China’s Economic Outlook: Moving towards a Market Economy [Online] Available at: http://web.mit.edu/./ChinasEconomicOutlook-MarketEconomy-WEF.pdf [Accessed 25 May 2011] Krishna KL (2004) Patterns and determinants of economic growth in Indian states [Online] Available at: http://www.icrier.org/pdf/wp144.

pdf [Accessed 25 May 2011] Myung Kim Yung (2003) Understanding East Asian Political Systems: Origins, Characteristics, and Changes [Online] Available at: http://sjeas.skku.edu/upload/200605/3.pdf [Accessed 25 May 2011] Ohnesorge K.M John.(2007) Asia’s Legal Systems in the Wake of the Financial Crisis: Can the Rule of Law Carry any of the Weight? [Online] Available at: http://www.law.wisc.edu/m/hfwd3/risd_rule_of_law_northeast_asia_proofs.pdf [Accessed 25 May 2011] Petrakos George (2007) Determinants of Economic Growth: the Experts’ View [Online] Available at: http://www.esri.ie/research/.

economics/./Working_Paper_No._20.pdf [Accessed 25 May 2011] Martin F Michael (2010) Understanding China’s Political System [Online] Available at http:// www.fas.org/sgp/crs/row/R41007.pdf [Accessed 25 May 2011]