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Essay on International Business (New Zealand vs China)

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Added on  2019-11-26

Essay on International Business (New Zealand vs China)

   Added on 2019-11-26

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Running head: INTERNATIONAL BUSINESSInternational Business Name of the Student:Name of the University:Author note:
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1INTERNATIONAL BUSINESSEssay 1The international relationship between China and New Zealand started since December1972. The relationship improved so much that New Zealand is the first developed country to signthe Free Trade Agreement with China. Currently, China is the biggest trading partner of NewZealand in merchandise goods. While doing business between two countries, the culture andsocietal pattern must be considered. While China has a collectivist society, New Zealand followsthe individualistic pattern of the society. Hence, the business cultures in these two countries arequite different (Fang, 2012). Collectivism refers to communism. In this society structure, the welfare of the society isprioritized over the individual welfare (Chhokar, Brodbeck & House, 2013). In China, peoplepay attention to the relationships in both personal and professional affairs. The greeting style inChina is different. During the exchange of business cards, it is mandatory to present the cardwith two hands and accept it with a bow. This way the card represents respect. The backgroundof the person, participating in the deal, must be taken into account, such as, the familybackground, effects of political or economic conditions on the family, etc. (Liu & Woywode,2013). Any business deals should not be rushed, as the Chinese like to know their businesspartners very well before going for a deal. First they like to build a strong relationship and thenthey would like to know about the values, honesty and thoughts of the business acquaintance.Once they are convinced about the integrity and credibility of the business acquaintance, theywould go ahead for the business deal. Apart from that, the Chinese people expect the oppositeparty to be extremely well prepared about the meeting, with minimum of 20 copies of theproposal and presentation made only in black and white. Small talk at the beginning of themeeting is important. While making the decision, the Chinese do not like deadlines and delay theprocess. The patience of the partner is appreciated. The hierarchical order while entering theroom and in any business meeting is very important in the business world of China. It must bemaintained by everybody. The first person to be walked into the room is the head of thedelegation. During the lunch break, almost everything halts too (Chhokar, Brodbeck & House,2013). New Zealand follows individualistic culture in the society. Individualistic culture ischaracterized by prioritization of the individual over a group. In this culture, people are more
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2INTERNATIONAL BUSINESSinterested about self, than for the group. However, the business etiquettes do not reflect thatentirely. The New Zealanders are very reserved people and do not like to be overfriendly at thefirst meeting. The dressing sense is considered to be very important, especially in the businessmeetings. Maintaining hierarchy is good but not compulsory in the meetings or any businessdealings. Punctuality is very important. People expect to make an appointment before meetinganother person (Sturman, Shao & Katz, 2012). Small talks before the meetings are done to breakthe ice. Building trust and a good relationship is considered to be essential for any deal. For thepresentations, New Zealanders expect simple and precise language rather than any flowerylanguage. Bargaining is not practiced here, therefore a deal should not be started with a very highprice. Value for money is significant in any business deal. While greeting people, a firmhandshake with good eye contact is appreciated. Women are expected to initiate a handshake.First impressions play a very major role in New Zealand. During first meeting, people areexpected to use title and surname of the business acquaintance, until they are permitted to use thefirst name. Discrimination in work place is illegal in New Zealand (Gao, Knight & Ballantyne,2012). From the above discussions it can be said that New Zealand business managers shouldkeep in mind the hierarchical order maintained in China, the punctuality, small talks before themeetings, and presenting the business card with two hands should be maintained by the businessmanagers for a business deal. They should also not talk about delays in deals and deadlines whilemaking a deal with the Chinese. The Chinese like to think long term about any business deal.However, one of the biggest cultural differences is the language difference between the twocountries. As the two languages are sharply different, and Chinese prefer to use their ownlanguage for the official purposes also. The New Zealander business people must take intoaccount this fact (Li & Zahra, 2012).
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3INTERNATIONAL BUSINESSEssay 2 The Free Trade Agreement (FTA) between New Zealand and China is a bilateralagreement of free trade, signed in April 2008 in Beijing. This is the first free trade agreementsigned by China with any developed country. For New Zealand, this agreement is the biggesttrade deal after the Closer Economic Relations agreement with Australia signed in 1983. Beforesigning the agreements, the negotiations spanned for more than three years and fifteen rounds.The agreement provisions will fully become active in 2019. The agreement included theconditions that, 37% Chinese exports to New Zealand and 35% New Zealand exports to Chinawould be free from tariff by October 2008. By 2016, all tariffs for the exports from China wereto be eliminated and 96% of the New Zealand exports to China would be free from tariff by2019. This agreement also included the clause that 1800 skilled workers from China can go toNew Zealand for up to three years. However, this is limited to 100 workers per sector, except inthe sector for Chinese medicine practitioners, Mandarin teaching aides and Chinese chefs. NewZealand would also establish a scheme for working holiday, which would enable 1000 Chinesecitizens to work in New Zealand and travel for up to 1 year. The business visa processing andconditions would be improved by both the countries (Song & Yuan, 2012). BenefitsThe major benefit of FTA between New Zealand and China is the saving of the money,spent in the form of tariffs. When fully implemented, the FTA would save almost NZ $115.5million annually on 96% New Zealand exports to China. The immediate tariff removal on worthof NZ $200 million of the current exports include a particular type of fibreboard, scrap metal,fish meal, iron slag and coking coal. 5 years of tariff, worth of NZ $621 million of the currentexports, would be eliminated on infant milk formula, frozen fish and fish fillets, yoghurt,methanol, casein, animal fats, apples, oil and wine. 9 years of tariff elimination, worth of NZ $77million, includes sheep and beef meat, sheepskins, kiwi fruits, and edible offals. 10 years of tariffelimination, worth of NZ $50 millions, include tariffs on cheese, butter, liquid milk and 12 yearsof tariff on skim milk and whole milk powders, worth of NZ $305 million. These items have topay an entry duty of NZ $36 million in China. Country specific Tariff Quota (CSTQ) has beenimplemented for wool exports and 75% has been made duty free (Aggarwal & Urata, 2013).
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