China's Economy

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  • Topic: Rio Tinto Group, BHP Billiton, FTSE 100 Index
  • Pages : 2 (416 words )
  • Download(s) : 62
  • Published : April 11, 2013
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What are the opportunities and challenges faced by countries when transcending into an international frontier?

As countries shift their perspective from domestic markets to the international frontier they are faced with several opportunities and challenges. The article ‘BHP Billiton and Rio Tinto: Seizing opportunities in China’s Dragon Economy’ written by Breda McCarthy encapsulates this transition; extrapolated through the variances in the economic state and rate of progression, which is directly intertwined with the variances in political, cultural and legal perspective.

The rapid progress in China’s economy has made it the ideal target market for Australian mining giants BHP Billiton and Rio Tinto, as per “World Bank figures, China's GDP has increased from $150 billion (1978) to $5 trillion (2009) before adjusting for inflation” (DeSilva-Ranasinghe, S, & Monk, P 2011). As China transforms into a land of “opulent infrastructure, overflowing with prosperity and self-confidence (DeSilva-Ranasinghe, S, & Monk, P 2011)” it leads to an unprecedented demand for raw materials, has seen to the occurrence of a new relationship, CEO of BHP encapsulated this, “Australia needs to be open to China’s investments measured in billions of dollars.” Despite the countries’ need to satisfy their own national interests they can construct new directions for their bilateral relationship by establishing a broader global focus. These types of convergence are believed to “help restore stability and balance within the global economy” (Burrow, S 2007).

In order to capitalize on such opportunities they must overcome the cross border dissents in perspectives. Differences in their cultural beliefs lead to differences in their methodology of doing business, for instance studies held in China have identified “Chinese business relationships, which are rooted in tradition and culture, had little to do with service and the management of the service delivery process, a very important...