Doing business in Asia 

Three main challenges





business代写 Moreover, doing business in different Asian countries need to consider different macro and micro business environments.







Course code:IBUS7312

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Number of page: 4

Words count: 2123









1.0 Introduction

business代写 Today, Asia is playing more and more important role on world economy as the economics of China and India grow rapidly. For example, China is the world’s second largest economy in 2020, and it has averaged nearly 10 percent a year GDP growth since it began to open up and reform its economic in 1978 (World Bank, 2020).

business代写 For next three to four decade, Asia will be indicated as one of the key drivers of global economic growth. Asia’s GDP will overtake the GDP of the rest of the world in 2020, and it is predicted that Asia will contributes roughly 60% of GDP growth in 2030 (World Economic Forum, 2020).

Therefore, it is important for a business to catch opportunities in Asia and deliver goods and services in international perspective. business代写 However, there are many external environmental issues that will be confronted by firms when they are doing business in Asia.

The business environment in Asia is complex, diverse and dynamic, and Asia cannot be viewed as a single, homogeneous entity in the reality. business代写 Therefore, developing knowledge about doing business in Asia in different countries will significantly help western firm to reduce the risk, and remote from traditional ways of doing business.

Moreover, doing business in different Asian countries need to consider different macro and micro business environments. business代写This essay will examine 3 most significant challenges of a western firm faced in multiple Asian countries.

They are economy, political and social issues.business代写 The opportunities and challenges of western firm will be analyzed in this essay as well as what the firm should do to overcome the challenges. Moreover, the differences and similarities when doing business between major Asian countries will also be examined in this essay.

2.0 Body

2.1 Social

Social trend is one of the most significant macro environment challenges on foreign businesses.business代写 To do the business in Asia, managers need to know deeply about the unique society context of target country. There are rapid changes in Asian societies, which might include urbanization, aging population, and e-commerce trend.

Firstly, the urbanization in Asian will lead a change of labor force. business代写 The labor-intensive sector such as manufacturing and storage might likely to see a reduction in some Asian countries, such as China and Malaysia, the western business might move to other countries that have cheaper labor.

business代写 For example, the development in China in past 30 years is resources-based and there are huge amount of cheap labor. The cheap labor in china has propelled the China to the status of the world’s factory (Plekhanov, 2017).

However, According to Textor (2020), there is 59.58% of population in China living in urban area in 2018. China has an increase trend in urban population from 2008 to 2018, more Chinese move from rural to urban area (Appendix 1 will show the degree of urbanization in china from 2008 to 2018).

business代写 Due to the social trend of urbanization and the living standards improvement of Chinese residents, the Chinese labor is not cheap as before, and many western firms moved their factories to countries that have cheaper labor, such as Vietnam and Myanmar etc.

Secondly, there is a social trend of aging population in Asian countries; the improvement of medical science increased the life expectancy of Asia population. According to Lee (2018), Asia is aging fast, it predicted that there will be 16% of Asian population is over 65 years old by 2040, which is more than double the share of 7.8% in 2015. business代写 The social trend of aging population in Asia will raise the capital investment and employment in healthy care industry.

The investment in Asia have started shifting away from primary industries such as mining and agriculture to service industry such as for-profit hospital networks that could help residents better access to healthcare system, aging care organizations and medical equipment etc. business代写 Asian aging population creates diversity opportunities and threats for western firm to do business in Asia.

business代写Foreign firms could enter Asian market and focus on developing goods and services on aging population, such as healthy care relevant products, medical products, entertainment for aging population and nursing home etc.

Meanwhile, due to the aging population, robots are displacing a growth share of mutual labor to less physically job for humans. Automation of robot is being adopted fast in some Asian countries like Japan and South Korea.business代写 In 2019, more than 20 percent of population in Japan is over 65 years old, which is the highest proportion in the world (Walia, 2019). Due to the shrinking and aging population in Japan, there is a significant need to address the shortage of labor force.

Therefore, western firms should consider automation in labor when they enter an aging population country like Japan in Asia.     business代写

Thirdly, the e-commerce in Asian society has been boosted significantly in recent years. Today, there are nearly 2.2 Internet users in Asian society, which is already half of world Internet users, and China and India alone account for one-third.business代写 The large amount of Internet user increases technology innovation in Asia.

Asian countries such as China, India, Japan, South Korea, and Singapore are indicated as the most digitally advanced nations in the world. business代写Blazyte (2019) indicated that there are currently around 804.5 million of Internet users in China, which has driven Chinese society to global leader in e-commerce.

It has been estimated that there were 32.7 trillion Yuan in Chinese ecommerce market in 2019 with 73% of Chinese residents use e-commerce in China. The percentage of mobile payment among Chinese Internet users has been grew from 25 percent in 2013 to 68 percent in 2016.business代写 Moreover, three of China’s Internet giants—Baidu, Alibaba, and Tencent are building a rich digital ecosystem in the world.

Foreign firms should consider the social trends of e-commerce in China to deliver product, promotion, price and place strategies.business代写 Strategic online promotion, convenience mobile payment and novel product design are required during the business production, selling and distribution processes.

2.2 Economy

Economy is another macro environment challenge for western business to enter Asian market. The economic in Asia has been growth fast in past 30 years. Economic sector would be analyzed including GDP, inflation rate, CPI and unemployment rate etc.business代写 GDP growth rate is a key indicator that tracks the health of economic in a nation, and it shows the monetary value of all finished goods and services in a country.

 Asian countries have been though a significant GDP growth in last 30 years. For example, OECD (2019) states that since 1970, Malaysia has recorded a remarkable economic growth, the average real GDP growth rate is 6.7% over 1970 to 2018. business代写 Malaysia has transferred from agriculture- based economic to industrial and service-based economic. The inflation rate of Malaysia has been averaged at 3.7% since 1970.

business代写 The central bank of Malaysia adopted a discretionary monetary policy that contrasts with inflation- target policy of other Asian countries, such as Thailand, Philippines and Indonesia.

However, Malaysia is going through an economic concession in 2019. business代写 The economic growth in Malaysia is 4.2 percent in 2019, which is the weakest GDP growth rate since the third quarter of 2009 due the domestic contraction in palm oil and natural gas output (Appendix 2).

Moreover, the exports of goods and services are expected to decreased due to slowdown of global trade in Malaysia, and the exports of 2019 has been decreased 3.1%.business代写 On the production side, the traditional manufacturing declined while service industry increased firmly (Trading Economic, 2020).

business代写 On the other hand, as the fourth economic power in Asia, South Korea is famous for its significant economic rise from one of the poorest countries in the world to a developed and high-income country in just one generation.

However, South Korea has experienced one of the largest economic transformations of the past 60 years. business代写 The South Korean economy is going though one of the worst two-year growth periods in more than half a century, the GDP growth rate of South Korea is 2 percent Over 2019 (Santander, 2020).

Therefore, the Korean government has worked hard to boost the economy through an expansion government spending.business代写 Korean unemployment rate is 3.8% in March 2020, which is an increase from 3.2% in 2018, the increase unemployment rate has been caused by economic concession, decrease of customer consumption and business investment in Korean economy.

Although economic of Asia is growing fast, there are still some countries are in economic concession in recent year with higher unemployment rate, decreased consumer consumption and business investment.business代写 When a firm decides to enter a business in an Asia, it is a good idea to enter a country that expansion in economy with low unemployment rate, good consumption and investment business environment.

2.3 Political

The last but not the least, a western firm should develop the political awareness business代写 when it decides to do a business in Asian countries.

First of all, when a western firm choose a country in Asia to develop its business, it is important to choose a country with political stability, administrative practices, operational flexibility and stable price controls.business代写 According to Lasserre, (1995), due to the regulation and political has huge different between western country and Asia, western firms should pay attention to obey the local rules.

The assessment of political influences on the firm is industry specific, each western company will necessary to design their own criteria, business代写 which includes the evaluation of political and legal risks in a country as well as relevant economic and industry changes due to the policy changes.

Secondly, a company should have a tricky balance for government. In recent year, Asian governments are creating trade and investor-friendly reforms, promote social and financial inclusion, investing in hard and soft infrastructure. business代写 The government innovate the education to ensure they have appropriately skilled workforce. The government in Asia is balancing the economic development and social sustainability.

Therefore, Asia’s ability to live up to its growth potential will largely depend on the government in Asia. For example, from Mao era onward, state firms of China have always domain the national economy, which is negatively influence the power of private company in china. business代写 However, according to McGregor(2019), since Xi Jingping took power in 2012, he engineered a shift in policy that the privacy firm in china should be responsible 75% of economic output and 50% of investment.

The new policy released the government control of private company, which provides a better opportunity for foreign businesses to enter Chinese market than 10 years ago. However, due there is 56 ethnic groups in china, the unrest of minorities is a constant problem (Passport, 2020).business代写 Firms should consider ethnic political issue in china when they plan to enter Chinese market.

Thirdly, A policy of the international relationship with other countries would also influence the domestic business environment. business代写 For example, the business environment of South Korea has also been significantly influenced by political international relationship sector.

business代写 Hamilton & Kim (2007) stated that Korea is a military directorship with limited legitimacy, and the denuclearization and the ‘peace economy’ concept have been pushed by president Moon Jae-in as the cornerstones of its North Korea policy.

However, in August of 2019, South Korea broke off its intelligence sharing arrangement with Japan (Santander, 2020). As the low economic growth, and significant deterioration in the relations with Japan, the export-drive economic of South Korea is facing huge problems.business代写 Korea currently has a tense international relationship politically with Japan, which is one of the biggest trading partners with Korea (Buchholz, 2019).

Therefore, for the political sector consideration of growing a business in Asia, business代写 it is not a suitable time to enter South Korea market at this moment.

3.0 Conclusion

To be concluded, Asia is playing an important role in global economy, it is a good idea for a business to enter Asian market. However, there are external macro and micro challenges that a firm would face in entering Asian market. business代写 This essay has analyzed three main challenges for a firm to enter Asian market.

business代写 There is social challenge, economic challenge and political challenge, and each of challenge has been indicated in multiple Asian countries such as China, Korea, Japan, Vietnam, Malaysia, Thailand and Myanmar.

The solutions of each challenge has also been addressed clearly when a western firm doing a business in multiple Asian countries. However, global economic is complex and hard to predict. The business environment in a country is also influenced by many other sectors such as technology, culture, legal and environment etc.business代写 The challenges a company faced would be more than the challenges that this essay indicated.

Therefore, for the further research,business代写  it is necessary to investigate and analysis technology, culture, legal and environment challenges in Asia and develop solutions to address them.

4.0 References

Blazyte, A. (2019). E-commerce in China. Statista. Retrieved from

Buchholz, K. (2019). Who is North Korea trading with? Statista. Retrieved from

Hamilton, N., Kim, E. (2007). Economic and political liberalization in South Korea

and Mexico. The Journal of Third World Quarterly, 14(1), 109-136. Retrieved


Lasserre, P. (1995). Corporate strategies for the Asian pacific region. The Journal

of Long Range Planning, 28(1), 13-30. Retrieved from

Lee, J. (2018, May 31). This is how Asia can make the most of aging population.

World Economic Forum. Retrieved from

OECD Economic Survey. (2019). Malaysia. Retrieved from

Plekhanov, D. (2017, December 13). Is China’s era of cheap labor really over?

The Diplomat. Retrieved from

Passport. (2020, Jan 17). China: Country Profile. Retrieved from

Santander. (2020). South Korea: economic and political outline. Retrieved from

Trading economics. (2020). Malaysia GDP Annual Growth Rate. Retrieved form

Texter,C. (2020). Urbanization in China 2008-2018. Statista. Retrieved from

Walia, S. (2019, November 13). How does Japan’s aging society affect its

economy? The Diplomat. Retrieved from

McGregor, R. (2019, July 25). How the State run a business in China. The

Guardian. Retrieved from

The World Bank. (2020). China Overview. Retrieved from

5.0 Appendix

Appendix 1: Degree of Urbanization in China from 2008 to 2018



















Appendix 2: Malaysia GDP Annual Growth Rate

















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