Business Relations and Benefits in China and Australia

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Distinct models of government-business relations operating in China and Australia

Australia China business council is an organization which purpose is to promote the business and trade between the two countries. Australia is helping Chinese companies to facilitate smoother and more secure trade and business. Australian related organizations are experienced in Chinese “culture, language, translation, trade, import/export documentation, trade fairs, business negotiation trips and training seminars for companies looking at dealing” (AustAsiaCo. 2007) with China and Taiwan. Australia has extensive expertise in helping companies’ source product manufacture product and/or establishes long term business “relationships in Australia and the Chinese-speaking world. With offices in both Australia and China, Australia is uniquely poised to offer exceptional and extensive services sufficient to help small to large businesses expand their market area or define their product line, whilst limiting cost and risk” (AustAsiaCo. 2007). On the other hand China also trying to develop business relationship with Australia, because of China is the largest export market and second largest “trading partner of Australia. At present China and Australia’s resource-rich state have carried out a series of large cooperation projects in the fields of energy and natural resources and also ready to work with Australia to bring the level of dual-track cooperation to a new height. China has also expanded cooperation in education and scientific research with Australia” (Ministry of Commerce of P.R. China. 2004).

At the last visit of Chinese president “Hu Jinato” shown a great interest for establishing friendly relations, intensify high-level exchanges, and consolidate pragmatic cooperation between China and Australia (Xinhua News Agency 2007).

Socialism with Chinese Characteristics and Australia’s liberal model

For the cold war the socialism has been weakened all over the world including China. In China socialist party still hold power, but China is now allowing privately owned business to grow again. This give an idea about the socialism with Chinese characteristics model operated in the government business relation in China.

Australia’s liberal model is so fast for the government business relation than China. Australia is providing so much opportunity to it’s citizens and investors also. “Australia ensure that it’s government, of whatever political persuasion, will be guided by considered, honest advise based on rigorous analysis, sound knowledge of administrative practice and sensible precedent” (Commonwealth of Australia. October 2005).

Government business relationship in Australia

The government business relationship in Australia is noticeable. The cost of conducting business is comparatively lower. It has a transparent legal and business environment and takes only two days to start a business. A salary for employees in Sydney is also lower than those in major international business “capitals, including Frankfurt, Hong Kong, London, New York and Tokyo. Australian electricity costs per kilowatt for industrial clients are cheaper than in Germany, Hong Kong, Japan, Singapore and the UK. Australia’s vast gas reserves are also put to work for industry at internationally low prices The growing network of FTAs Australia have signed in the Asia-Pacific region also makes it an ideal location as global markets and also has agreements with many countries. Australia is a sophisticated market and keen to adopt and consume new technologies. It’s Western consumer and corporate cultures mean that products that are successful here are also highly likely to be adopted by other Western markets. Australia is most perfect as ‘nation brand’ and regional office location, according to the second edition of the Anholt-GMI Nation Brands Index of cultural, political, commercial and investment appeal. Australian market is so easy to enter” (Palamedia Ltd. 2007).

Government-business relationship in China

China’s business government relationship is influenced by strong political and traditions. China is now trying it’s best to create a knowledge-based economy and has thus placed science, technology and education high on its list of national priorities. China is now emphasizing on its science and technology development with its resources and that may be clear by the China’s remarkable feature of investment in science and technology. For this it has taken many long term planning. The plan is comprehensive, covering a wide range of sectors, from public health and national security, through to manufacturing and the transport sector. China has also emphasized on energy sustainability and agriculture, which includes “renewable energy, clean, coal technology, hydrogen energy production and storage, fuel cells and improved coal-mining technologies. China is keen to” (Bishop. 25 September 2006) cooperate in agricultural research, and in particular, water resources management. China is providing huge opportunities to the citizens for a career in business and also training to the doctors in China. Chinese business opportunities are very flexible to citizens.

The areas in which the model of government-business relations operates in China

China is now very much emphasizing on scientific and technological development for the economic growth. It is trying to develop the agricultural and manufacturing industries and also water resource management. For this China is continuing many research activities. China has a strong attention on renewable energy, coal technology, fuel cells, and improved coal mining technology and especially on petrochemical. The government is now trying to restructure its “social policy domain by adopting strategies of privatization, marketization, commodification and societalization to reduce the state burden in financing and providing social welfare and social services” (MOK N.d.).

The recent and dynamic changes occurring within the government-business relationship in China

The most recent and dynamic changes that have occurred in China’s government business relation are the restart of FTA (free trade agreement) with Australia. Because China is the second largest market for Australia and Australia is also a large market for China. The major cause of the restart decision of the FTA is for the following benefits:

Better goods access including agriculture
Better services access
Investment
Non-tariff measures
Government procurement
Intellectual property
Built-in negotiations

Another rapid development in education is providing dynamic and rapid growth in business in China. This experience is providing knowledge that could not be gained elsewhere. By which the business is booming gradually.

Petrochemical advantage and disadvantage in China

Petrochemical is an important resource of China. Though China has opportunity in petrochemical, but it has a lack of research and technology. But the advantage is it has enough human resources.

Areas in which the model of government-business relations operates in Australia

Australian government has a strong liberal model in business. This model is helping Australia to flourish its economic growth. The Australian Liberal-National Party supports for market-based economics. Hence the focus of government policy is in removing barriers to innovation and interaction. Australia is emphasizing on research to have concrete outcomes that can be measured in terms of national benefit such as commercial benefit, skills development or environmental benefit. For this Government’s advisory boards and funding agencies are spending a lot of time for developing methods of measuring research. Australia is regularly contributing to the Scientific, Technological and Industrial development. The GDP on agriculture is fallen 4% from 20% and GDP on mining is 5%, so Australia is putting more attention on research and development effort on both of these two. Australia is also putting attention on the contracts of necessary petrochemical supply with countries such as Malaysia, Papua New Guinea.

Recent and dynamic changes occurring within the government-business relationship in Australia

Very recently Australia has changes some strategy in law and policy to flourish the economic growth. Australia has opened many of its markets to trade, reconstituted the taxation system and financial policy and also reduced the national debt and increased flexibility and productivity in the labour market. No “legislative changes affecting the APS (Australian public service) arises from the ongoing necessity for the Service to reflect the times and the environment in” (Howard, 19 June 2001) which it operates the values and priorities of Australians, and the specific needs of government. Another dynamic changes in firm level which driven the aggregate productivity growth. The big challenge is that it has lost much of the confidence and dynamism for the worst economic growth since World War II.

Areas of subsidizing petrochemical advantages and the disadvantages for citizens of the government-business relation in Australia.

Australia has also petrochemical opportunity. It has a developed research and technological background. But the main problem is it has not enough human resources. It has to import human resources.

The government-business relationship in China under the operation of socialism with Chinese characteristics is more inclined to deliver better outcomes for the majority of its citizens.

The main characteristic of socialism is to do for the citizen equally. If anybody want to be rich by a socialist government it is not possible. Because, socialism maintain the law of equal distribution of wealth. A socialist government only work as a partner of its citizen. This is operated by the Chinese government for its citizens. Though China is a large populated country and most of the citizen has no big capital, socialism characteristic is perfect for the country as well as for the citizen. Under socialism every citizen can claim equal right for any purpose. China is emerging car industry day by day. Less than 10 years ago, “China’s annual car production did not match the output of a single large auto company in a developed country, but recent years have seen quite a transformation” (Businessweek. 12 April 2007).

Domestic companies like Geely, Chery and Changfeng have learned quickly, expanding production capacity and developing new models. BMW also want to get approval for establishing no.1 foreign luxury car industry in China.

Local and global challenges faced by government-business relationship in China

By this time China is suffering by unemployment challenges. The Chinese government is taking action to tackle the growing problem of urban unemployment. The city government provides tax breaks, financial rewards and loan guarantees to new, labor-intensive private businesses, as long as they hire laid-off workers. “China’s plans to build an “eco-city” of 500,000 people on a huge island in the Yangtze Delta have been widely heralded. That the local planners are more concerned with raising the income and standard of living of the region than ensuring ecological development” (Schifferes, 5 July 2007).

“China in recent months has taken center stage in the international debate over global warming. It has surpassed the United States as the world’s largest source of greenhouse gases, and it became developing nations’ diplomatic champion at the recent United Nations climate negotiations in Bali. Now China may become the target of a full-fledged trade war that could destroy, or perhaps rescue, the chances of bringing rich and poor nations together to fight global warming.” Collier, 6 May 2008).

Car manufacturer’s advantages and disadvantages

Though now a day China is emphasizing on scientific and technological research, as a result car manufacturing is developing day by day. BMW the German car company show their interest on establishing their branch in China. If they get the approval it will be the biggest foreign luxury car manufacturer. It will also flourish the Chinese economy. With the advantage of car manufacture at the same time it has some disadvantage also. It is continuing the human resource program, but not yet reached at the final stage. But human resource (skilled & experienced) is the precondition for any kind of industry.

“Hyundai wants to compete with other foreign and domestic car makers that already have begun producing hybrid electric vehicles in China. Japan’s Toyota Motor Corporation kicked off production of the hybrid-powered Prius sedan in Northeast China’s Jilin Province with First Automotive Works Corp. It meant Toyota became the first foreign car manufacturer to build hybrid vehicles in China. General Motors (GM), Volkswagen and Chinese car firm Geely all plan to make hybrid-powered vehicles in China in 2008. Analysts have predicted China’s vehicle market will total 10 million units a year by 2010. … As this blog previously noted, a number of new hybrid models are entering the China domestic market from Chery, Dongfeng Motor Corporation, Chang’an Motor Corp, China FAW Group Corporation and Geely. This year General Motors (GM), Volkswagen and Chinese car firm Geely plan to make hybrid-powered vehicles in China. China car makers are focused upon more efficient, advanced technology, to include more efficient drivetrains.”

Local and global challenges being faced by government-business relationship championed by Australia

To face the recent challenges Australian government have to take the following steps:

“the need for governments to be more flexible in designing and administering programmes to meet the unique and varying circumstances of different regions;
the need for improved access to federal programmes and services as part of a sustained effort to make inroads into the service deficits country people experience in essential areas such as health, education and telecommunications;
better coordination and cooperation between the different spheres of government and genuine opportunity for country people to have input into government decision-making processes;
the improvement of physical infrastructure in regional areas to stimulate community and/or local industry development;
Identifying opportunities for leadership development and community capacity building so communities are empowered to find solutions to the challenges they face.” (The Commonwealth Budget 2000-2001).

Car manufacturer’s advantage and disadvantage in Australia

The car manufacturing industry in Australia has grown well in the past few years, with trend in Sport Utility Vehicle (SUV) model. The most advantage of Australian car manufacturing is the availability of energy resources. It has also a skilled human resource for the car industry.

“Mitsubishi has already closed shop and now Ford Australia has discovered that the engineering for a new RWD platform will be done in the US. Ford Australia can only survive in Australia as a manufacturing concern with government subsidies. It has no export market and the only niche vehicle it manufactures for the Australian market is having the engineering done in the US.” (The Rest, 2004-2008).

There are some advantages and disadvantages exist in Car manufacturing of China.

Systems and compares the advantages and disadvantages of both systems of government-business relations

Companies usually use four basic strategies to compete in the international environment: an international strategy, a multidomestic strategy, a global strategy, and a transnational strategy (Bartlett & Ghoshal, 1989). To compare between Australia and China we can say that, Australia has modern research and technology but lack of human resources. At the other hand China has enough human resource but lack of modern research and technology.

From the view point of advantage Australia is fully capable for developing car industry with scientific and technological supply. But China is also developing car industry by supporting the foreign investor with its labor supply. From the view point of disadvantage in Australia few foreign companies has been closed their business. And in china the main problem is technological backwardness.

China delivers better outcomes for its citizens because of its collective approach

Joint ventures and wholly owned subsidiaries both belong to the form of foreign direct investment (FDI), which is equity funds invested in other nations (Rugman & Hodgetts, 2001). A socialism characteristic is operated in Chinese business relation model. Its main characteristic is collective approach. It provides the equal rights and opportunities to the citizens.

References

AustAsiaCo. (2007). Australian – Chinese Import. Export, Risk Management and Business Relation Consultants. AustAsiaCo. 2008. Web.

Bartlett A. C. and S. Ghoshal. (1989). Management across Borders. Boston: Harvard Business School Press.

Bishop. Julie. ACBC (WA) Australia China Business and Trade Foundation. 2006). Web.

Businessweek. (2007). China’s Emerging Car Industry. 2008. Web.

Collier, Robert. (2008). China faces trade war climate challenge. Asia Times Online (Holdings), Ltd. Web.

Commonwealth of Australia. (2005). Australian Government- Department of Education, Science and Training. Commonwealth of Australia. Triennial Research Plan. 2008. Web.

Howard, John. (2001). The Australian Public Service. Australianpolitics.com. 2008. Web.

Ministry of Commerce of P.R. China. (2004). Chinese President Hu begins state visit to Australia. Tuesday, 2007. Web.

Mok. Ka-ho. (n.d.). Embracing the Market: Changing Social Policy Paradigms in Post-Mao China. pp. 1-31. 2008. Web.

Palamedia Ltd. (2007). Land of Opportunity. 2008. Web.

Rugman M. Alan and Hodgetts, M. Richard. (2001). International Business – A Strategic Management Approach. McGraw-Hill.

Schifferes, Steve. (2007). China’s eco-city faces growth challenge. BBC News. Web.

The Commonwealth Budget 2000-2001. Regional Australia: Making a Difference Overview. 2008. Web.

The Rest (2004-2008). South Sea Republic. Car Manufacturing in Australia. Web.

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