China U.S Business Partner
China and the united States. Which of the two would you prefer to do business In and why? No one will criticize stating that the U. S. And China are the most influential countries In the current global Industry. What happens In the economic market In one of both countries directly reflect to the world economy. Even though they both have the substantial economic strength, they have nothing in common; the history, the way they have been developed, the impression that they show to the world, etc. Are all deferent. The way of becoming powerful countries are not easy to analyses with Just few theories.
However. One of the important theories Is the difference in their regime which started to affect since sass. After World War II ends, the political regimes in both countries can be simple; China is socialist and the U. S. Is democratic. However, the world economy had kept changing. Now, things are different. The U. S. Has sucked to capitalism which Is reserved for democracy. On the other hand, China changed as time went by. It is arguable that communism or socialism would be automatic failure. Nevertheless, it is obvious that communism and socialism has closed or limited economic market which will demand one country the death sentence.
According to Farley and Moss, the journalists of Society & Science, in 1979, legislative reforms in China started the global trade within limited areas in Sheehan, Aisha, Shannon, and Examine. Now, the most markets in China are opened to visitors although there are strict policies (2009) and the current status of China is pre-modern, pre-capitalist, and feudal’ (Mining’, 2009). ‘Feudal system’ was originally created In Middle Age which refers to the political, social, and military system related to the relationship between landlord and vassal (Dictionary. Com unabridged). A Journalist, Mining comments that
China Is not yet fully liberal and also In capitalism. In the society, this means ‘uncivilized. ‘ Considering all factors, China Is on the preemptively capitalist step In the concepts of Marxism which is the step to the civilized and liberal country. Acknowledged from the current China’s economic strength in the world, the I OFF Any changes in business policies in one country affect companies in numerous ways in various sizes. The changed policies can be helpful and they also can give tremendous damages to the company. Since China and the U. S have different political regime, they have many similar polices but there are more differences.
It is hard to decide which country is better to start a business if one has a chance. There are many factors that affect the decision to run a business such as the type and size of company, the current markets status, the government policies and etc. The sample example can be the manufacturing company and it is better to open the company in China because of the current possible crisis status in the U. S. , governments’ taxation to the manufacture companies for high GAP, cheap labors for lots of handy Jobs, First of all, China currently has more stable economy than the U. S. Has. There was
Global Financial Crisis in the U. S. Which has commonly believed to have started in July 2007. The reasons are from complex matters. One definite factor is the sub- prime crisis from housing bubble and to overcome the crisis, the U. S. Government submitted $700 billion rescue proposal (Canasta, 2009). On Septet. 29, 2008, DOD Jones Industrial Average ends up down 777 points which was worst point loss in the history (Gibson, 2008). This collapse in the U. S. Economy influenced all other countries in the world. However, China is the only country who had a positive number of GAP in the ear of 2008 (Fordham, 2009).
Even though, the U. S. Incredibly overcame the crisis in short period of time, there always is a possibility for another crisis and unstable economy. China has the highest GAP increase rate for decades. The U. S. Already has high GAP and definitely has better environment to run a business. China has lower GAP than the U. S. And it is a firm theory that lower GAP country has higher GAP growth rate. GHz, a Journalist of Journal of Economic Perspective, summarized that for decades, China is the only country who has two digit industrial growth rate (2012).
These easily think as there are more chances to success in business and the higher chances make the environments change. Among countries, the developing country normally seizes the initiative. At the last 620 meeting in 2010, the U. S. Had to step back and give away few from China, especially on policies of currency changes, labors, and the U. S. Diplomacy which made better environments running a business in China than the U. S (Moronic, 2010). Higher growth rate country is better to starting a business than countries with low growth rate countries. Also, China has better taxation policies than the U. S. Has.
Not only cheap labors help the company higher profits and chances of success, it is the government policies that helps running a business in China. China waives taxes from double tax to double taxes under numerous conditions. The conditions are very complicated but the big pictures of the tax waive condition is that the company must exports everything that are imported which means manufactured products with components from outside of China cannot be sold in China (Sharked, 2012). Taxes are very important issues to businesses from foreign countries and these waives helps a lot who wanted to start business in China.