* Military offenses and political problems
Both China and Japan share the same situation and pressure from the International regarding on the international military affairs and political concerns. This is the most controversial issue that is too complicated to be solved. After the Second World War, fear of the rise up of militarism from Japan, she was not allowed to have its own army and needed to obey a list of regulations of United Nations. Even though Japan is a close military ally of the United States, Japanese acquisition activity since 1980s was always facing the objections based on national security concerns. The most controversial transaction from a national security perspective was Fujitsu’s attempted acquisition in 1986 of Fairchild Semiconductor. At the same time, China is now being denounced of threatening the world stability by economical means. Fearing of the communist party, the U.S and the European countries will always impose regulations or even forbidden the Chinese investment in an excuse of ensuring the national security level and prevent the political penetration. The recent issues of U.S government and China HuaWei impose a very good example on how China foreign direct investment can be hindered. We can never estimate the potential risk on sovereignty issues.
* Employment practice
Both China and Japan do face the challenges of employment issues on FDI or acquiring the foreign asset. Yet, the root cause is different and so as the results. One distinctive feature of Japanese FDI was tight control over foreign employee, particularly with regard to the employment of high-level managers. Japanese firms were most often hit with claims that they discriminated against non-Japanese and against women, including by engaging in sexual harassment, and were also accused of discriminating on the basis of race and age. This creates tension between the corresponding countries, for example, the biggest trader partner, U.S, in which it always emphasizes on fairness and democracy. The U.S. Equal Employment Opportunity Commission was also involved in several cases against Japanese firms. Public perceptions of Japanese employment practices at the time were very negative. But for China, they are more open for employing the elites from the local enterprises. However, it imposes another problem, which is the opposition from the trade union. Due to the lacking management experience of China’s enterprise, it is easy for the local labors to unite and fight against the firm, which bring out challenges for China’s overseas investment. This is not usual practice in China, especially with the abandon labor supply; workers normally have no-say on this matter. And Chinese enterprises don’t really know how to deal with the problems of social responsibility. Also, they will dismiss those non-Chinese management team and take control on the managerial-sector. This made Chinese enterprise less effective on managing the human resources , Chinese enterprises become less trust worthy as well as a big obstacle to have further business in that particular area.
* Planning and investment and Company’s incentive Cultural differences Both China and Japan’s enterprise share a similar view on planning and investment strategy. In certain extend the cultural difference between the West and East really induce conflicts and both countries always made themselves into a frame and can’t pass through it. This becomes the greatest obstacles on acquiring the foreign assets and FDI. Japanese enterprises most likely just focus on long-term strategy, without immediate plans and fail in risk management. Failure to react quickly can result in a lack of control over management and result in a reducing incentive to corporate with Japanese firms. The target firms who don’t understand this situation will come out in a perception that the...