In the past few decades, the concept of politics was important matter for countries. They insist their policy and slander each other??™s policy. If that slander gets more deeply involved, it was extended as a war. For example, Second World War also occurred in that phenomenon. China and United States are representative competitive partner as a social-democratic versus neo-liberalism. Usually, many people thought United States is more convenient place to start business. However, nowadays, those kinds thoughts are gradually disappear. China became powerful country as much as United States. People can find out some evidence from concept of politic, policy of government, culture, and lots of expert??™s opinion which talk about China??™s future.
United States adopted Neo-liberalism as a politics after 1970s. According to Dictionary.com, (definition of neoliberalism, 2011) the definition of neo-liberalism is a modern political economic theory which provides free trade, minimum government in business, reduced public expense on social service, and so on. The reason why this theory appears is the failure of Keynes theory. Keynes theory provides the basic theory of financial politics to lots of countries which experience global panic. Advanced countries such as US and UK adopted modified capitalism which phase in Keynes theory. The purpose of modified capitalism is make welfare state by income averaging and full employment from government??™s active intervention. However, after 1970s, when the global depression came, people suggest neo-liberalism. It looks generous for business, but, problems are existing. Depression, unemployment, increases of gap of the poor and the richer. Problems are getting serious.
Besides, China adopted social-democratic as a politics. Ditionary.com (definition of social democratic, 2011) defined it as the beliefs, principles, or program of a social democratic party which advocating a form of organization based on the political ideology of Karl Marx and economic. According to Janoski (1998, p.123) social democratic concepts are came out from K. Marx and F. Engels at 1860s they pursue realization of changing society by social ownership of means of production and social management as a democracy way.
People think it is hard to start business in China, because of China??™s policy which related with market. It may be true that government of China still aim communism. However, China??™s policy is changing. People want private assets and the government??™s current trend is admitting that kind of thinking. Therefore, according to Tse (2010, p. 137), as days go by, policy of China is more generous for business person. Also, if government supports that business, it will grow extremely. Even though there are still exists some policies which related communism, they just purposed citizen??™s equal right.
As I mentioned, even though China is blue-ocean, people think it is hard to start business in China using blue ocean strategy. The reason why this phenomenon occurs is there are lots of cases which international companies that fail in China such as Warner brothers, Siemens, Hitachi and so on. Chan and Mauborgne (2005, pp. 105-121) categorized the reasons, which proof that is hard to realize the blue ocean strategy, as external factors and internal factors. External factors are a sudden change of policy environment, reduction of market access, an increase of excessive supply, and shorten of market term. Also the internal factors are mistaken of market forecast, lack of company??™s concept and realization, limitation of source which company holds, and falling behind of business model. However, these failures was occurred by company. If they try on many things, such as entering the related type of business, developing new business model, adoption of political change, strengthen of relationship with government, indigenization policy, establish a strategic alliance, etc, based on consilience and insertioning thinking, they might success their business in China using blue-ocean strategy.
Comparing United States and China, when people start their business, they want start in US than China, because of Consumer??™s realization. When consumer heard one product made in China, they tend to distrust that product and use others. However, these days, there is no one who doesn??™t use Chinese product. Also, the cost of source and employer are cheaper than other countries. These factors are perfectly suitable for manufacturer. Although the realization of Chinese product is not good, if manufacturer use these factors, they can make more cheaper and high quality product.
Trompenaars and Hampden said culture of United States is individual culture. Individual culture looks great place to start individual business. It may be true that individual culture admit person??™s career, work, and result, but, if the person fail once, they cannot recover easily. Besides, China is multicultural country. Therefore, basically, there are lots of cultures and they know tolerance. When the business man fails once, they tolerate him and encourage for planned economy.
Since the growth of China??™s economy, people think China will be competition partner with United States. Ikenberry, G said one day, China will use their growth to changing the concept and system of international institution. Therefore, the era of United States will be ended by China. The government of United States earns money by commercial bank. They loan and receive money from company and person, and then they invest the money to person. However, China is different they earns money by tax policy. They earn from tax and invest welfare such as health care services. By these concepts, people can imagine future between two countries. Although China has polarization problem of the wealth, due to social-democratic policy, one day, they can overcome by investment of welfare which government will do, but, because United States has limitation to put budget into social welfare and as a result polarization problem of wealth becomes to be serious, they might be try to spend the time for overcoming that problem, it takes long time.
Also, it is same that United States government and China government collect various taxes and invest on finance, such as corporate tax, income tax, etc. However, there is difference between United States and China. United States government invest in social institution, because they have various way to collect tax, and diverse tax gatherer who are from developed financial system, but, since individual thinking, they imposed medical insurance fee to individuals excessively. On the other hand, although there is not diverse way to collect tax in China, they can collect easily essential and planned tax which need to government??™s finance and provide equal social safety net, because generally, the government of China controlled the way for collecting tax.
To sum up, while United States government does not interfere in business section and the main agent of business do free competition as a neo-liberalism country, the government of China hold most companies, pursue noncompetitive and monopolistic market as a communism country. Also, government controls all economy. Therefore, even though United States business creative is better than China, paradoxically, because the politic of China is pursuing planned economy, it promises stability and growth of fixed scale. Plus, although the government of China interfere the business, China will be developed continuously as a global factory, the market demand will be increased and follows international accounting because of changing as a free economic system. Therefore, if they establish accounting corporation which provide consultation, there will have more business opportunity then United States.
Chan, W., Mauborgne, R. (2005). Blue ocean strategy: from theory to practice. Berkeley, Calif: Graduate Schools of Business Administration, University of California.
Curran, G., Acker, E. Business and the Politics of Globalisation: After the Global Financial Crisis. NSW, Australia: Pearson Australia.
Definition of neoliberalism. (2011). Retrieved from http://dictionary.reference.com/browse/n eoliberalism
Definition of social democratic. (2011). Retrieved from http://dictionary.reference.com /browse/socialdemocratic
Ikenberry, G. (2008). The Rise of China and the Future of the West. Retrieved from http://www.foreignaffairs.com/articles/63042/g-john-ikenberry/the-rise-of-China-and-the-future-of-the-west
Janoski, T. (1998). Citizenship and civil society: A framework of rights and obligations in liberal, traditional, and social democratic regimes. Cambridge, UK: Cambridge University Press
Sauvant, K. (2010). Investing in the United States : Is the US Ready for FDI from China Edward Elgar Publishing Limited
Trompenaars, A., Hampden, C. (1998). Riding the waves of culture: Understanding cultural diversity in global business. New York, USA: McGraw Hill
Tse, E. (2010). The China Strategy: Harnessing the Power of the Worlds Fastest-Growing Economy. Basic Books