International Business Issues and Policies

Running head: INTERNATIONAL BUSINESS ISSUES AND POLICIES
International business issues and policies
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INTERNATIONAL BUSINESS ISSUES AND POLICIES
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The war between US and China has adversely affected the business, especially from
the perspective of economic parameter. In this context, assistance from ASEAN is a much
needed option for the restoring normalcy in the operations. Some of the countries are in the
process of indulging in strategic alliance with ASEAN in terms of strategizing the operations
according to the targets. Signing treaty is one of the means for improvising on the public
relations between the countries, indicative of financial aid and support. Typical evidence of
this lies in the Treaty of Amity and Cooperation (TAC). Strategic alliance with ASEAN
would enhance the financial flexibility of the countries like US and China. This is due to the
GDP over US$ 2.8 trillion (Asean.org 2019).
According to the 2019 report, Chinese economy is flexible, which is reflected from
the nominal GDP of 12.2 billion and $27.3 billion PPP GDP. The growth rate for GDP is
6.2%. The labour force is also stable. Indulging in alliance with ASEAN would act assistance
for China to achieve economic growth in terms of regional peace and security (Luo 2016).
Regional diplomacy is one of the other factors, which would upgrade the standards and
quality of the expansion transactions. Communication in this context would be crucial for
enhancing the professional relationship between the states. Outsourcing the information can
be beneficial for transmitting the knowledge regarding the efficient and effective means of
conducting the trade.
Fig: China GDP growth
(Source: Gov.cn 2019)

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INTERNATIONAL BUSINESS ISSUES AND POLICIES
Political instabilities are one of the major concerns, which have stalled the
productivity of the business, especially in the field of import and export activities. This has
deprived the foreign customers of quality products. Mention can be made of the Cambodia-
Thai disputes and claims by Filipino politicians regarding the disputes with the Malaysian
counterparts. On the contrary, Tjosvold (2017) argues that self-radicalization in the terrorism
is one of the serious concerns, which is an obstacle in executing the businesses in an efficient
and effective manner. One of the recent surveys indicate that only 30% of the commitments
made by the ASEAN member states are implemented (Asean.org2019). This contradicts the
objective of promoting cooperation, peace and security.
Fig 2: China-ASEAN trade volume
(Source: Asean.org 2019)
Solving the problem of South China issues reflect the absence of unification and
hotlines. Non-compliance to the standards and protocols of communication contradicts the
aspect of hospitality between the nations and add to the instabilities. Apart from this,
potential naval clashes in the disputed waters can be related with the disobedience to the rules
and regulations of the contracts, deals, trades and transactions with other countries.
Implementation of the agreements is still in the progress stage. Absence of central mechanism
to enforce the compliance indicates improper infrastructure, which would be an issue for the
businesses to standardize their operations (Asean.org 2019).
According to the Corruption Index, China is placed 77th position. Typical evidence of
corruption lies in graft, bribery, embezzlement, backdoor deals, nepotism, patronage and
statistical falsification. Corruption adds to the complexities in economic inequality and social

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INTERNATIONAL BUSINESS ISSUES AND POLICIES
unrest. Dishonest CPC officials degrade the unity and integrity of the workplace. Negligent
approach towards curbing the corruption would be harmful in terms of preserving the
economic and political stability. The cases of bribery, kickbacks, thefts and exploitation of
the public funds accounts for 3% of the GDP. Opinion surveys of the party officials are
identified as the great concern of the public. In the era of 1999 to 2004, corruption was
considered as the second problem, affecting the social welfare. Typical example of this lies in
the violation of loyalty in case of the employees towards the employers (Gov.cn 2019).
As a matter of specification, there are three types of corruption- graft, rent seeking
and prebendalism. Graft attains commonality and equates with the characteristics of bribery,
illicit kickbacks and others. Rent seeking is the adoption of illegal means for gaining
autonomy and power. Prebendalism refers to the situation when incumbents of the public
office acquire priviledges through the officials of that office.
Fig 3: ASEAN tie-ups with China, US and Japan
(source: Asean.org 2019)
United States economy comprises of the gross domestic product of 19.39 lakhs
according to the annual report of 2017. The minimum wage is 7.25 USD per hour, this is the
calculation based on the report of 2019. This depicts the unemployment rate of 3.6%. The
GDP per capita is 59531.66 USD and the annual change was reported at 2.3%. Improvements
were made in the tax burden and government integrity, which outpaced the declines rates in
fiscal health, labor, monetary and trade. The economy is considered as wealthy and
diversified. Tax Reform Bills have reduced the burden of heavy tax legislations. 80% of the
GDP is accounted for the production of manufactured goods, which tags United States as a
leader in research and development (Usa.gov 2019).