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Asia-pacific business

University Affiliation

Question 1

During the Asian miracle, government intervention was deemed to have been instrumental in advancing economic prosperity. Some of the government-intervention strategies that were notable during that period are growth and openness, trade and industrial policies, and benefits and costs. To begin with, government intervention comprised of various policies that favored greater openness towards international trade with an aim of achieving better economic growth. Openness meant adoption of strategies to encourage free trade and enable economic growth via diffusion of managerial and technological expertise.

With the exception of Hong Kong, many East Asian economies had adopted numerous intervention strategies aimed at pursuing trade and industrial prosperity. Trade and industrial policies comprised of tariff and non-tariff barriers applied particularly during the initial stages of growth. Countries such as Japan, Taiwan, Singapore, and Korea applied high tariff rates, restrictions on imports, and quotas aimed at encouraging development of local industries. Many of the barriers were later eliminated after numerous multilateral trade negotiations (Harris & Canada, 1996 P. 278).

Government intervention strategies were also based on cost-benefit analysis. For instance, government intervention policies favored certain Korean and Japanese firms to create business on imperfectly competitive industries, such as automobiles, shipbuilding, and steel. Those firms were protected and subsidized by governments because they were deemed instrumental for development and long-term economic growth.

During that period, many East Asian economies were suited to employ government intervention strategies to drive their economic agenda. Some countries, such as Taiwan, Korea, and Japan pursued significant trade barriers for long period. However, others, such as Singapore and Hong Kong embraced openness during early stages of their development.

Question 2

Some of the entry modes that could be considered while entering Asia-pacific market include long-term contractual agreements, joint ventures, and licensing. Long-term contractual agreements involve establishing legal measures that would dictate operation between various agencies of different countries. Long-term agreements may be preferred because of low risks associated with assurance from signed legal documents. However, the strategy is dangerous because business environment is dynamic. A business may be hampered from accessing emerging business opportunities due to terms and conditions underlying contractual agreements.

Licensing may be advantageous because of comparatively low development costs and low-levels of financial risks. Nonetheless, licensing is flawed because of growth may be slower, lack of direct control, sharing profits, loss of expertize to potential competitors, and high levels of capital investment.

Joint venture is another strategy that could be applied while entering Asian-pacific markets. Joint ventures may be associated with negativities, such as loss of control over managerial and technological expertise, difficulty in achieving global coordination, and profit sharing. Despite the negativities, joint venture is the best strategy for entering the Asian-pacific market because it is associated with great deal of flexibility and benefits. For instance, joint ventures enables a firm to gain access to the local partner’s knowledge, sharing of risks and costs, high-levels of political acceptability, and ease in deploying resources (Delios & Beamish, 2004 P. 178). Such a business arrangement could be more convenient for any business interested in entering the Asian-pacific market.

Question 3

Causes of Japanese economic stagnation during 1990s

Economic stagnation of Japanese economy during the 1990s emerged because of abnormalities in the economic system created via speculative asset price. There was a close relationship between the Japanese banking system and corporations. In an attempt to deflate speculation and control inflation, the Bank of Japan decided to increase inter-bank lending rates. The policy caused busting of the economic bubble and subsequent crash of stock market. As asset and equity prices fell, insurance and banking companies were left with financial books full of debt.

Reasons for slow subsequent economic recovery

A number of reasons contributed to slow economic recovery. First, economic structure posed a great impediment. The structure of Japan’s economy was complex because of political influence in many sectors, such as ministry of finance, insurance companies, and banks. Those units were under strict regulatory restriction and it was difficult to introduce flexibility. Second, the economy suffered from policy mismanagement. Notable policy mistakes, such as increase of the consumption tax in 1997, emanated from ineffective leadership and lack of political will. Lastly, during that period, yen steadily appreciated in comparison to dollar, leading to liquidity trap and sustained asset deflation. The exchange rate factors hindered operation of various policy mechanisms that could have cleaned up the country’s financial mess.

Have prospects improved?

In 2000s, the country experienced mild economic recovery. However, the limit is yet to reach pre-crash level in many areas, including output per capita, gross output, and labor efficiency. In fact, many countries have emerged and overtaken Japan in terms of economic efficiency and output per capita.

Question 4: India

Strengths of Indian economy

To begin with, there is a great scope for improving efficiency in the economy. Infrastructure in India is known to be so bad that an improvement will see sizable increment in productive efficiency and capacity. Second, the economy is favored by demographic level. The country is known to have a positive birth rate, which translates into a sizable workforce needed to enhance the economy’s productivity. Third, the economy is well placed to benefit from outsourcing and globalization. The country has one of the largest English-speaking populations in the entire world, meaning that many multinational labor-intensive industries are most likely to target India. Other strengths of Indian economy include positive-growth forecasts, immense domestic demand for industrial goods, highly skilled human resources, and low cost (El, 2001 P. 159).

Weaknesses of Indian economy

Despite numerous strengths experienced by the Indian economy, there are notable weaknesses. These include poor and inadequate infrastructure leading to increased costs and delays during delivery. Another weak point is that the economy is run by many outdated laws and too many trade unions and political labor. In addition, the economy suffers from high dependency on subsidies and nascent regulatory systems.

Question 5- China

Currently, China is facing a serious energy problem that can be categorized in terms of administrative, regulatory, financial, and management section. The nation is facing the worst energy crisis in years, forcing planners to spend many sleepless nights trying to find solution. Growing population and rapid industrialization has put a strain on energy resources of the economy. It is believed that in the near future, many parts of the country, including Shanghai, have experienced power cuts (Kee & Yoshimatsu, 2010 P. 18).

In an attempt to solve the challenge, the country invested massively in hydroelectric power. However, the investment advanced the problem because of long droughts experience in the north and southern regions. Currently, the country is doing a research concerning possibility of mining helium from satellites to be used to generate power. Studies has revealed that the moon’s surface contains a vast amount of helium 3 dumped by solar winds. Concrete plans are underway to send astronauts to the moon to mine helium and send it back to the earth for use in generation of energy.

Question 6

The statement that ASEAN led to political success but economic failure is true. The reason is that, from the political perspective, the regulatory body managed to integrate all nations of South-East Asia. Largely, ASEAN succeeded as a political body because rules and regulations governing the body were formulated via political methods rather than legal principles. Leadership of the body adopted a political perspective instead of economic, leading to success of its political objectives but failure in economic objectives. Because the body failed to integrate professional-economic thinking in formulation and implementation of strategies, it soon found itself in a situation characterized by numerous disputes (Kee & Yoshimatsu, 2010 P. 78). Economic failure emanated from many factors including failure to find amenable solutions for territorial and trade disputes. The body succeeded in marshaling economic co-operation. Nonetheless, economic effectiveness of the body failed, especially when it failed to provide a suitable strategy for handling emerging issues. Rigid leadership and failure to adopt reforms resulted in an economic failure.


Pearson.International Business: An Asia Pacific Perspective,Delios, A. & Beamish, P.W. (2004)

. (Business Source Complete.) Oxford: Oxford University Press/Books. Business in the Asia PacificEl, K. S. (2001).

. Calgary: University of Calgary Press. The Asia Pacific region in the global economy: A Canadian perspectiveHarris, R. G., & Canada. (1996).

. Singapore: World Scientific. Global movements in the Asia PacificKee, P., & Yoshimatsu, H. (2010).

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