Asian Business Environment

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EFA – Asian Business Environment – Dr. Yang Laike (lkyang@bs.ecnu.edu.cn)

17/04/2012: Session 1

Course description

Why Asia?
* The most dynamic and fastest growing region in the world * Most distinctive cultures and business …

Course Objectives?

Learning modules

China- India – Japan - Korea (major economic countries)

M1 Asian Business Culture
M2 Economic structure & development in Asia
M3 political system and its impact on business
M4 The business law and taxation system
M5 Financial market and banking system
M6 Corporate governance and CSR (Corporate Social Responsibility)

ASSESSMENT

10-30-60: Attending and continuous assessment – group paper – final exam = 100

Final Exam: It will cover all sessions. We have to read all materials. Not a QCM but question which need to write texts.

Q/A

FIRST SESSION: Asian Economies: Development and characteristics.

1. Asian: Geographic and Economic Characteristics

Definition: Difference between French & Asian (different perception)

ASIAN ECONOMIC CHARACTERISTICS/ Indicators and Landscapes:
* East Asia has the world largest regional market
* Of almost 2 billion populations (plus India’s 1.2 billion) * It is many times bigger than the EU’s 453,3 million and NAFTA’s 420 million population.

* East Asia has been the 1960s the fastest growing region in the world * Over the last two decades the region has an average annual economic growth rates of around 7%, which is much higher that the average 5% growth in the rest of the world.

* EA has historically had a high domestic savings rate of about 20-40% * The EU’s average is about 15%; the US’s is……. ?

* EA holds over hall the world’s foreign exchange reserves * China alone has the world largest foreign exchange reserve, which passed 3.2 trillion in 2011 July.

American depense too much and Chinese save too much, not enough domestic demand: Why?

MAIN RASON: Social security for China

In Asian traditionally Family is in centre of life: parents save money for parents (et inversement). They have to save money for their family (family security). (Social system is very low).

Only urban people have a social security, not rural. Progressively implementing.

Social – Confucianism:
You would never spend more that you earn (you have)

Credit market:
In china they can borrow from bank in principle but in fact, not because are owned by State. You can borrow for mortgage (house), very low student loans, and that’s almost all. You must take money for your savings for: car, marriage, launching a small business.

Money goes to the banks, which use it for decrease Government DEBT.

Sex-Rate at birth: one child policy
They prefer have boys. (Unbalanced: more boys than girls) rural area, they can have a second.

Unbalanced sex-rate has impact on Chinese savings because BOYS have to be rich (good conditions of livings) if they want find a girl (because rare)

Foreign money savings: IMPORTANT

GDP per capita: very diversified

Purchasing Power parity (PPP):
Term about exchange trade moneys comparison according of conditions of living in the country concerned. (How much bottle of water you can buy with ONE EURO and ONE YUAN because the official exchange doesn’t represent the reality)

General business environment:
How easy to do a business in Japan China India S.Korea ?
Ranking per country.
In China and India it’s not easy to do a business : lots of regulations and rules.

Asia very attractive for foreign investments (especially China)

2. East Asian Economic development: the flying geese model

* FLYING GEESE MODEL: Kaname Akamatsu.
Japanese economist popular during 60s

NIEs (Newly Industrulized Economies) : Honk kong, Korea, Taiwan Singapore

Association of East Asian Nations = ASEAN : Indonesia Thailaid, Phillipines, Singapore, Vietnam, Cambodge, Laos, Malaysia, Brunei,...
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