Ch. 11 Power Point Slides 17 Ed.

8/18/2019 Ch. 11 Power Point Slides 17 Ed.

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The Asia

PacifcRegion

Chapter 11

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Learning Objectives

LO1 $he dyna%ic growth in the region

LO2 $he i%portance and slow growth o# &apan

LO3 $he i%portance o# the 'otto%-o#-the-(yra%id Mar)ets

LO4 $he diersity across the region

LO5 $he interrelationships a%ong countriesin the region

LO6 $he diersity within China

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Dna!ic "ro#th in theAsia Pacifc Region $1 o% 2&

Asia has "een the #astest growing area inthe world #or the past three decades.

*tarting in 1++6, the leading econo%ies o#

Asia &apan, Hong ong, *outh orea,*ingapore, and $aiwan/ eperienced aserious nancial crisis, which resulted inthe crash o# the Asian stoc) %ar)et.

A tight %onetary policy, an appreciatingdollar, and a deceleration o# eports allcontri"uted to the downturn.

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Dna!ic "ro#th in theAsia Pacifc Region $2 o% 2&

$he 1++ esti%ates "y the 3nternationalMonetary 4und 3M4/ that Asian econo%ieswould hae 2+ percent o# the glo"al

output "y the year 2000 were on target. 'oth as sources o# new products and

technology and as ast consu%er %ar)ets,the countries o# Asia5particularly thosealong the (acic i%5are 7ust "eginningto gain their stride.

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The "reater China

“The "reater China” re#ers to "oth the(eople9s epu"lic o# China (C/ and theepu"lic o# China :C/ or $aiwan.

Aside #ro% the ;nited *tates and &apan,there is no %ore i%portant single national%ar)et than the PRC.

$he econo%ic and social changes occurringin China since it "egan actiely see)ingecono%ic ties with the industriali


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The "reater China' PRC $1 o% 2&

$wo %a7or eents that occurred in 2000are haing a pro#ound e>ect on China9secono%y?

• ad%ission to the @orld $rade :rgani


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The "reater China' PRC $2 o% 2&

Hu%an rights and the legal syste% are%a7or issues in China

$hree other pro"le%s #ace China in the

longer run?• the well-)nown eniron%ental decline

associated with its #ast growth

• the de%ographic disaster associated with itsone-child policy

• %anaging the current great transition #ro%rural to ur"an liing

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*ource? &ohan de ooy.

One chi() po(ic in China

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o h n G r a h

a %

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The "reater China' *ong+ong A#ter 1== years o# 'ritish rule, Hong ong reerted to

China in 1++B when it "eca%e a special ad%inistratie

region *A/ o# the (C.

$he 'asic Daw o# the Hong ong *A #or%s the legal

"asis #or China9s one country, two syste%sF agree%entthat guarantees Hong ong a high degree o# autono%y.

$he social and econo%ic syste%s, li#estyle, and rights

and #reedo%s en7oyed "y the people o# Hong ong prior

to the turnoer were to re%ain unchanged #or at least =0years.

$he Hong ong stoc) %ar)et is the pri%ary source o#

capital #or so%e o# China9s largest state-owned

enterprises.+Copyright © 2016 McGraw-Hill Education. All rights resered.!o reproduction or distri"ution without the prior written consent

o# McGraw-Hill Education.


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The "reater China' Tai#an$ROC& Mainland$aiwanese econo%ic relations

continue to i%proe as "oth hae entered

the @orld $rade :rgani


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,apan $1 o% 4&

&apan9s #ast growth in the 1+B0s and 1+0sa%a


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,apan $2 o% 4&

4aulty Econo%ic (olicies?

• A wealth o# #acts descri"e &apan9s econo%ic pain duringthe 1++0s, "ut none %ore so than its stoc) %ar)etcollapse.

• 'ut the peculiar #eature o# &apan9s 1++09s ersion was itsdecade-long persistence.

$he (olitical Eplanation?

• 3n a new appraisal, Gi"ney has written that &apan "eca%ethe icti% o# one-party sic)ness,F an ail%ent "rought on

"y a 80-year hardening o# political arteries.• Meanwhile, other o"serers, particularly within &apan,

were dissatised with either the econo%ic or politicaleplanations they were hearing. $hey #elt co%pelled toloo) #or deeper roots.

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,apan $3 o% 4&

Glo"al Circu%stances Hae Hurt?

• $he deep decline in &apanese consu%ers9purchasing power in 200+ is eceptional oer

the 0-year period shown.• $he econo%ic i%pacts o# the 2011

earthJua)eKtsuna%i disaster.

• $he de%and #or greater oil i%ports, resulting

#ro% the destruction o# energy in#rastructureand its nuclear power plants, hae pushed &apan into an unprecedented trade decit.

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,apan $4 o% 4&

$he Cultural Eplanation?

• A#ter @orld @ar 33, a shattered &apan arried ata consensus goal #or national recoery.

• $he &apanese hae an aLnity #or united e>ort.• $hen with the adent o# glo"ali


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-.hibit 11/1 ,apan0s " per Capita

Current international ,N000*ource? @orld 'an),

201= 1=




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n)ia $1 o% 4&

*ince its independence in 1+=0, the world9s largestde%ocracy had set a poor ea%ple as a %odel #orecono%ic growth.

3t was a%ong the last o# the econo%ically

i%portant deeloping nations to throw o>traditional insular policies.

3ndia9s growth had "een constrained and shaped"y policies o# i%port su"stitution and an aersion

to #ree %ar)ets. !ow, howeer, ti%es hae changed, and 3ndia has

e%"ar)ed on the %ost pro#ound trans#or%ation.

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n)ia $2 o% 4&

3ndia has ta)en the #ollowing steps?

• (riati


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n)ia $3 o% 4&

• *igning a trade agree%ent with the ;nited

*tates to li#t all Juantitatie restrictions on

i%ports

• Maintaining %o%entu% in the re#or% o# thepetroleu% sector

• (lanning the opening o# do%estic long-distance

phone serices, housing, and real estate and

retail trading sectors to #oreign direct

inest%ent

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n)ia $4 o% 4&

$he anti-"usiness attitudes o# 3ndia9s #ederal andstate "ureaucracies continue to hinder potentialinestors and plague their routine operations.

3ndia is now en7oying an in#or%ation technology

"oo%. A#ter esta"lishing a reputation a%ong #oreign

corporations, 3ndian co%panies now supplyeerything #ro% ani%ation wor) to the "rowsers

used on new-generation wireless phones to e-co%%erce we"sites.

Darge 3ndian co%panies are now epanding theirown operations a"road, o#ten through %a7oracJuisitions in deeloped countries.

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n)ian phar!acetica( in)str

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The or Asian Tigers

$he %ost rapidly growing econo%ies in thisregion during the 1+0s and 1++0s were thegroup re#erred to as the or Asian Tigers or4our Oragons/? Hong ong, *outh orea,

*ingapore, and $aiwan.

:#ten descri"ed as the East Asian %iracle,Fthey were the rst countries in Asia, a#ter &apan, to %oe #ro% a status o# deeloping

countries to newly industriali


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ietna! $1 o% 2&

Pietna%9s econo%y and in#rastructurewere in sha%"les a#ter 20 years o#socialis% and war.

Howeer, this country o# %ore than +1%illion people is poised #or signicantgrowth.

A "ilateral trade agree%ent "etween the;nited *tates and Pietna% led to !$status #or Pietna%.

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ietna! $2 o% 2&

$his will lower tari>s on Pietna%ese eportsto the ;nited *tates #ro% an aerage o# 80percent to less than percent.

3# Pietna% #ollows the sa%e pattern o#deelop%ent as other *outheast Asiancountries, it could "eco%e another Asian

$iger.

$he population is educated and highly%otiated, and the goern%ent isco%%itted to econo%ic growth.

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"reat econo!ic )ivi)e inietna!

Vietnam has very few cars; motorbikes deliver almost everything, including moon

cakes, in Hanoi.

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otto!7o%7the7Pra!i) 8ar9ets$OP8s&

C. . (rahalad and his associates introduced anew concept into the discussion o# deelopingcountries and %ar)ets5botto!7o%7thepra!i) !ar9ets $OP8s&5consisting o#the 8 "illion people across the glo"e withannual inco%es o# less than 1,200.

$hese %ar)ets are not necessarily dened "y

national "orders "ut rather "y the poc)ets o#poerty across countries.

$hese 8 "illion consu%ers are, o# course,concentrated in the DOCs and DDOCs.

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Rra( schoo(s in n)ia an)Tan:ania

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u t h 4 r e % s o n K $ h e ! e

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-.hibit 11/2Dna!ic Trans%or!ation o% OP8C(ster

*ource? Eric Arnould and &a))i &. Mohr, Oyna%ic $rans#or%ation #or 'ase-o#-the-(yra%id Mar)et Clusters,F Journal of the Academy of Marketing Science , no. &uly 200=/. eprinted with )ind per%ission #ro%*pringer *cience and 'usiness Media.

!ote? ':(M R "otto%-o#-the-pyra%id %ar)et.

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8ar9et 8etrics

Ehi"its 11., 11.8, and 11.= display the#unda%ental %ar)et %etrics #or the eight%ost populous countries o# the Asia (acic

region. Ehi"it 11.= "riey enu%erates

consu%ption patterns.

&apan stands out and there is a noticea"ledi>erence "etween the Chinese and 3ndiane%phases on education.

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-.hibit 11/3;tan)ar) o% Living in the -ight 8ost Pop(osContries in the Asia Pacifc Region

SCurrent ;*

.

8e)ica(Resorcesper 1


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-.hibit 11/4n%rastrctres o% the -ight 8ostPop(os Contries o% the Asia@Pacifc

Region

*ource? Euro%onitor 3nternationalI @orld 'an)

Contr

Trave(b Rai($passenger79!

per

capita&

Passenger

Cars@1<


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n%rastrctre in n)ia

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e r e % y @ o o d h o u s e K G

e t t y

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a g e s

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% i t ' h a r g a a K ' l o o %

" e r g

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w s K G e t t y 3 % a g e s

1

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!o reproduction or distri"ution without the prior written consento# McGraw-Hill Education.

- hibit 11 5


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-.hibit 11/5Cons!ption Patterns in the -ight 8ostPop(os Contries in the Asia@Pacifc

Region



2

*ource? Euro%onitor 3nternational,2012.

"ac)


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Asia Pacifc Tra)e Associations

$he Asia (acic region is preparing #or thenet econo%ic leap drien "y trade,inest%ent, and technology, aided "y othersin the region.

$hough #ew in nu%"er, trade agree%entsa%ong so%e o# the Asian newly industriali


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Association o% ;otheast Asianations $A;-A& $1 o% 2&

Di)e all %ultinational %ar)et groups,

A*EA! has eperienced pro"le%s and

#alse starts in atte%pting to uni#y the

co%"ined econo%ies o# its %e%"er

nations.

Most o# the early econo%ic growth ca%e

#ro% trade outside the A*EA! group.

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Association o% ;otheast Asianations $A;-A& $2 o% 2&

4our %a7or eents account #or the igorous

econo%ic growth o# A*EA! countries?

• the A*EA! goern%ents9 co%%it%ent to

deregulation, li"erali


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Asia7Pacifc -cono!icCooperation

$AP-C& $1 o% 2& $he other i%portant grouping thatenco%passes the Asian-(acic i% is theAsia-(acic Econo%ic Cooperation.

4or%ed in 1++, AP-C proides a #or%alstructure #or the %a7or goern%ents o# theregion, including the ;nited *tates andCanada, to discuss their %utual interests

in open trade and econo%ic colla"oration.

3t is a uniJue #oru% #or pro%oting tradeli"erali


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Asia7Pacifc -cono!icCooperation

$AP-C& $2 o% 2& A(EC has as its co%%on goals aco%%it%ent to?

• open trade

• increase econo%ic colla"oration

• sustain regional growth and deelop%ent

• strengthen the %ultilateral trading syste%

• reduce "arriers to inest%ent and tradewithout detri%ent to other econo%ies

B




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-.hibit 11/8ap o% "reater China

*ource? eprinted courtesy o# :riental $rael5o>ers tourist in#or%ation and reserationserices #or worldwide traelers to the Greater China region.http?KKwww.orientaltrael.co%.




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Diversit ?ithin China

!ortheast China? Dongti%e 3ndustrialHeartland

'ei7ing$ian7in

*hanghai and the Qangt


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ortheast China'Longti!e n)stria(

*eart(an) !ortheast China was the industrial andtechnological center o# the country in the1+B0s and 1+0s.

Growth in the other three %a7or regionshas eceeded that in the !ortheast asChina %oes #ro% co%%unis% toward a%ore #ree-enterprise orientation.

$he %ost i%portant adantage o# theregion is its 7utaposition with China9s%ost i%portant industrial neigh"ors.

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eijingTianjin

Central planning has %ade this region o#= %illion not only the political center o#the country "ut the TO center as well.

$he B=-%ile corridor "etween 'ei7ing andits coastal cousin $ian7in hosts so%e =,000Chinese high-tech co%panies, a%ongthe% Denoo, and %ore than 1,000

international 3$ co%panies.

(erhaps the )ey to this region is theJuality o# its higher education.

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;hanghai an) the Eangt:eRiver De(ta *hanghai has "een undergoing a %a7or

industrial renaissance during the past two

decades.

China9s sustained econo%ic growth andaccession to the @$: hae aided *hanghai9s

position as a regional trade and nancial center.

3t has a %uch "roader "ase o# industries,

co%ple%entary econo%ic resources #ro% the

Qangt


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Pear( River De(ta

$he Greater (earl ier area includes three cities o#oer = %illion inha"itants Hong ong, Guang


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The Other i((ion

$hese one "illion people usually receie a"out 10percent o# the central goern%ent "udget whicha%ounts to less than 100 a head #or rural roads,water, power supplies, schools, and hospitals.

;nrest in the countryside also ares up as theecono%ic diide widens, and new co%%unicationtechnologies display the gap.

!o distri"ution and channel syste% eists toe>ectiely distri"ute products, so co%panies%ust "eco%e resource#ul to co%pensate #or thepoor in#rastructure.

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Re(a.ation o% restriction onre(igion in China

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o h C h a i H i n K A 4 ( K G e t t y

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DiFerences in siness


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DiFerences in sinessegotiation ;t(es ?ithin

The "reater China !ortheastern !egotiators 'ei7ing Area

*hanghai Area

$he (earl ier Oelta

Hong ong

$aiwan

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8 9 ti O t iti i


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8ar9eting Opportnities inThe "reater China $here are etre%e di>erences in econo%ic well-"eing,

cultures, and political structures.

$he rich %unicipalities li)e 'ei7ing and *hanghai areJuite co%para"le to (aris, !ew Qor), or $o)yo in ter%s

o# the aaila"ility o# luury products. 3n ter%s o# the stages o# econo%ic deelop%ent, they

are large and rich enough to "e thought o# as %ore-deeloped countries.F

As in the ;nited *tates, luury cars sell "etter on thecoast, and truc)s sell "etter in rural areas o# the west.

;nli)e in the ;nited *tates, in China you cannot sellthe sa%e lines o# cos%etics or sha%poos nationwide.

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;!!ar

$he Asia (acic region is the %ost dyna%ic o# thethree regions.

3n particular, China and 3ndia "oth grew atdou"le-digit rates during the last e years.

$he %i o# stages o# econo%ic deelop%entpresent a ariety o# opportunities #or international%ar)eters? in#rastructure deelop%ent, newindustrial %ar)ets, and huge consu%er %ar)ets.

$he countries o# the Asia (acic region arecooperating in two %a7or trade associations,A*EA!V and A(EC.


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