Question

Your consulting company is now working with another company that would like to expand its business into other countries. You have been asked to provide a comparison of the different economic systems and how the company would need to operate in each country.

Select two countries and write a 525- to 700-word paper in which you:

• Compare the economic systems of the two countries and their impact on business growth/development.
• Identify the major economic/political systems of each country.
• Discuss which major economic/political system the United States uses and why.
• Discuss the problems a business may encounter when operating in each country’s economic systems.

Answer 1

China and Us have had longest trade relation and one of toughest experiences. Companies like Oppo and Vivo from China look to expand in US markets to tap mid segmented pricibg smartphone.

However the Us is more democratic political system as it believes in Constitutional powers and fundamentals rights lf people, and thus requires multiple approvals and sanctions before business gets nod. FDI laws and other taxation policies have to be either rejigged to allpw these companies.

On other hand, China is autocratic and adopts seamless licensing and FDi norms with fastest working styleand hence ease of doing business is best out here.

With rising tensions between Us China and continued trade wars due to tarriff both have stopped trade almost on high ticket goods. This has caused lower employment opportunities for China and rising deficit.

The biggest issue been surfaced is US China Trade War, Immigration Laws, US National Debt, Foreign Relations policy  

US and china have great history of trade wars however recent times has been largely due to sanctions been imposed on china by USA.

Recently, USA slpped tarrifs on 40% of chinese goods. which has caused prices of US goods to go up substantially becuase cheap imports fro china have been stopped.USA has also stopped cheap imports of steel and as a result Chinese government too has imposed substantial tarrifs on USA goods.

As a result, there has been currency devaluation in China to make it goods look more cheaper and attractive and has started selling Goods in emerging markets. US goods however have become more costlier and hence sales have decreased.

Chinese government has aggravated trade war by imposing fresh round of tarrifs , however before G20 summit which will be held in 2018, such issues will be resolved.

Since, China has imposed tarrifs we see there has been lack of entry of chinese workrs and visas in USA which has nullified the clear cut winner. Because of trade war, India has managed to export steel and aluminium to US markets and hence has been the greatest beneficiary.

Given the Presidential Power following economic strategies need best case implementation :

Resolution of NAFTA deal with negotiation as well as maintenance of great relationships with South Korea on denuclearization by maintaining an eye on all developments
US China pact and removal of tarriffsby signing of MOU and economic cooperation
Immigration laws been relaxed by allowing H1B for Indians who look to create startups IN UsA and generate more employment
Debt refinancing and additional taxation on corporates with large market Capitalization to decrease debt in short term.
Increasing interest rates to appreciate dollar and control inflation and money supply in market  

References:

Bailey, Martin Neil, What Happened to The Great American Job Machine!? The impact of trade and electronic Offshoring.

Cline, William R 2004. Trade policy and Global Poverty. Washington : Institute for International economics

Goldman Sachs, 2003. Dreaming with BRICS: the path to 2050. Goldman Sachs Global Economics paper 99

Zoelick, Robert B 2001. American Trade Leadership : What is at Stake? Speech before Institute of International Economics washing mton, September 24.

Schott, Jeffrey, 2004. Free trade agreements :US strategy and Priorities. Washington: Institute for International economics