The Power Shift to Asia: How to Succeed There?

Web. 8 Dec. 2013. Sheng, Shirley Ye, and Ma Yan. "China Vs. the United States: Market Connections and Trade Relations." International Journal of China Marketing 2.1 (2011): 45-57.

The recovery of China also contributes to the spring back of regional and global economy. After the global economic crisis, China has reduced the distance with America in economy, most importantly; China has built a “powerful” image in the world. Thus this image brings one standpoint that China is becoming another super power in the world; America cannot dictate the whole world any more. Based on this view, the global power structure is emerging “a G2 structure: China and US” (Stelzer 2009). This paper is aiming to analyze this G2 assumption.

To begin with, this research exposed a FDI puzzle between India and China through analyzing the current economic condition. Prime, Subrahmanyam and Lin (2011) stated, "Given their growth records, large markets, and reformed economic systems, both China and India appear to be equally likely candidates for foreign direct investment. Yet, China has received substantially more FDI" (p. 303). What's m... ... middle of paper ... ...a. Journal of Asia Entrepreneurship and Sustainability, 3(2), 60-80.

But recently the number of critics has been increasing and there is much evidence in favour of them. China will face a great economic crisis, if it does not reform soon. The first argument in favour of the thesis that China might be facing an economic crisis in upcoming years is the similarity in economic development with South Korea and Japan. In all three countries the development followed a common pattern, the so-called Asian-Development-Model. Firstly, growth is capitalized by low wages and booming exports, accompanied by quick industrialization under strict supervision of the state.

CentrePiece Autumn Available from: http://cep.lse.ac.uk/pubs/download/CP208.pdf Accessed: 02/04/2014 Zhang, KH (2006) WTO, China and Asian Economies. Paper presented at: University of International Business and Economics (UIBE) Conference. Beijing, China, 24-25 June, 2006. Zhang, Z (2004) Cross-cultural challenges when doing business in China. Singapore Management Review 26(1): 81 Zheng, Y & Chen, M (2006).

6 Olga Poluzakova; “Features of China’s Economy and its Prospects”; Page 8. Translated www.rea.ru. Web: Nov. 25, 2012. 7 Rodionova IA The global industry: structural changes and trends (the second half of XX -beginning of XXI centuries. ): Monograph / / Moscow: State Educational Institution MSFU, 2009.

Relevance According to the International Monetary Fund (IMF), World Economic Outlook, advanced economies with deficits will need to compensate for decreases in domestic demand with increases in international exports. Emerging markets such as China and India will compensate by shifting from international markets to their own domestic markets. The IMF has also projected that China will overtake the US economy by 2015 and India is expected to be equal in size to the US economy by 2020 (International Monetary Fund (IMF), 2011). It is clear that the continued expansion of China’s and India’s economies places them as a dominant economic forces that Multinational Enterprises will have to compete with for market share in China, India, emerging markets and domestically. Professor Khanna in his article China + India the Power of Two emphasizes the importance of businesses gaining a competitive advantage by not only looking at China and India as separate countries but by developing business strategies that consider China and India as major trading partners.

McEllister, Robert. "Recruitment and Retention of Managerial Staff in China." International Management in China: Cross-Cultural Issues. Routledge, 1998. 98-110.

Due to its low rate of saving, the United States takes from outside sources to finance the federal budget deficit. It solely depends on countries with high savings rates, such as China, to push some of their money and goods in the United States. “U.S. Treasury securities, which are used to finance the federal budget deficit, constitutes the largest category of U.S. securities held by China. As of June 2013, these totaled $1.28 trillion.”(Fas.gov 2013) United States policymakers have shown concern that China’s large amounts of U.S. money could spark a danger to the economy, in particular if China tried to deprive itself of larger shares of its interests.

Historically, the economy of many Asian countries was extremely strong compared to that of most advanced Western economies. Before the spread of the crisis, most Asian countries had a well structured economy. Nonetheless, these nations felt the. The major economic sectors that have been implicated by the financial crisis include export and equity markets. Sharp decline in exports across the nation was the first impact of the crisis.