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Choices of Essay Questions 1. “It has often been claimed that guanxi is a fundamental of Chinese society springing from the teachings of Confucius. Yet nowhere in the works of Confucius can we find...

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Choices of Essay Questions
1. “It has often been claimed that guanxi is a fundamental of Chinese society springing from
the teachings of Confucius. Yet nowhere in the works of Confucius can we find any
reference to, foundations for, or validation of, the practice of guanxi as it is experienced in
China today.” Critically discuss this statement (remember you do not have to agree with
A crucial issue, because the business and economic success of the Asian economies is often
attributed to cultural foundations – if that is true, we have to understand what these are. This
essay question is obviously related to Question 2 below, but is a much more explicit
challenge to those who argue that guanxi is culturally-based. Based on past experience with
Japan, as China grows towards becoming the world’s largest economy, concepts such as
guanxi will become as familiar in the West as ie, wa, and amae were in the 1980s. And from
past experience, most of you will be trying to prove the statement in the question about
guanxi to be wrong. The question encourages you to do this but if you disagree with the
statement, make sure you have evidence. Simply saying that you do not agree, doesn’t
make your disagreement valid. In the Japan as Number One period in the 1980s, many
scholars (and students) found it very hard to be objective; it seemed such an attractive idea
that lifetime employment and other Japanese employment practices were cultural in origin,
and explained Japan’s economic success, that there was too little discussion of the fact that
the evidence was actually very weak, especially for the first part of the argument. Similarly
now, much of the literature on China takes it for granted that guanxi is cultural (tracing its
roots back to Confucius) and provides a competitive advantage. It is often taken for granted
that both assertions are true, even by those who claim to be objectively investigating whether
they are true. They argue the case, by simply stating the case, and take it as a matter of fact
that since they just wrote it on a piece of paper, it must be right. This is a very harsh criticism
of the academic literature; if you disagree, then include that disagreement in your essay. And
remember, as important as they are, investigating these ideas is not the sole point of the
exercise – being able to construct a logical, cogent argument is a valuable business skill, as
well as an academic one, and as with all the essay topics, logic and cogency is what you are
aiming for here.
Warning!!: A question like this is always a little dangerous, because people have so many
preconceptions about the answer, including in the academic literature to which you’ll be
referring. It will be more dangerous if you don’t read the question! Note that this question is
asking you to do something that is too rarely done in the literature itself; it’s asking you to
look at the recorded works of Confucius, and secondary sources directly discussing those
philosophical works, to seek evidence as to the origins of guanxi. Don’t rely on the standard
guanxi literature to do this, although in the course of the essay you will probably refer to it.
Your focus is on the works of Confucius himself, and on the scholarly works which analyse
his ideas in depth (whereas the guanxi literature tends to mention Confucius in passing, with
no real analysis, and are absolutely convinced that his writings are the source of guanxi
behaviour without ever substantiating the claim). That task of looking at his original works
makes this a genuine research exercise and, as always, honest attempts at that difficult task
will be rewarded even if the attempt is not fully successful. Just keep in mind that assertion is
not proof. Once you get past that, this can be a fun and rewarding topic to attempt.
2. Japanese cultural traits such as an emphasis on harmony (wa) and teamwork, have been
widely seen as a source of competitive advantage for Japanese firms. To what extent
does the literature on the current Chinese economy see guanxi as a source of
competitive advantage?

Answered Same Day Oct 12, 2019 BBA 320


David answered on Nov 30 2019
140 Votes
    Asian financial crisis of 1997 was one of the most serious crisis situations for most of the connected Asian and nea
y economies. It started from the crisis situation of Europe’s exchange rate issues during 1992-93 which stretched it to two other crisis situations till 2000. The start of the Asian financial crisis was from the devaluing of the cu
ency of Thailand in 1997 which also affected the nea
y countries such as South Korea, Indonesia, Malaysia and Philippines in the same year. Moreover, it spread further to Russia next year and then lastly to Brazil in the subsequent year. The crisis of Asian economies is also called as ‘IMF Crisis’ because of a strong package of bailout was redeemed by South Korea from IMF to make the situation at ease for big banks and large scale enterprises. Also, it prompted the public to give their gold and other assets for the national treasure so that there will be minimum laying off of the workers and employees (Hayo and Shin, 2002).
The basis reason for the crisis was the existence of cu
ency woes and banking issues that were inter related and led to the crisis in few economies. In the paper, the main discussion will be about the growth strategy of South Korea before the crisis and its implications over the economies after the crisis situation which led to its fast recovery from the crisis. The comparison will also be conducted in terms of various macroeconomic parameters such as employment growth rate, GDP growth rate and inflation rate which will reflect the recovery process of South Korea from the financial crisis and its comparison with other economic growth process (Samant, 2013).
Pre-crisis economic situation
    Being one of the most developed economy of the Asian region, South Korea was worst hit by the financial crisis as mentioned by the industrial conglomerates of the country. The bail out of the country was very costly for IMF to get it recovered from the crisis situation which was around US $60 billion. During the crisis period, the financial expenses of around 27 big conglomerates were more than their operating profits with non-profitable growth performance of seven of these big companies since three years. Eventually, there was transfer of the accumulated loss to the financial sector on the basis of non-performing loans. Even if government raised its expenditure in the economy to boost up the aggregate demand by injecting 60 trillion which represented 1 per cent of country’s at that time into the system, there was still no reduction in the ratio of non-performing loans at an acceptable level. The burden over the government continued at that time and was expected to keep growing till chaebol’s of Korea would not have shown up positive profitability (Hutson and Kearney, 1999).
Figure 1 Source: Worldbank
    In the above graph, it can be seen clearly that the rate of growth of GDP in the country was above 8% before the Asian Financial crisis of 1997. It dipped to the lowest point between the year 1997-98 due to loosening of consumer’s and investor’s confidence in the market. However, the post crisis situation was positive as it instantly shows peaked growth rate of around 10% in next year, that is, in the year 1999-2000 (Min, 1999). Thereafter, due to fluctuations in the policy matters at macro level and inclusion of reform measures over a long period of time, the growth rate revolved around 4-6% (Growth Rate (Annual %)). Being a diligent economy, it worked out hard to implement hard core expansionary fiscal as well as monetary policies through reform measures which will reap the benefits of the rewards after few years when it was on the recovery process. As the financial sector of the country was the strongest one, it resulted into combined effect of the better regulatory features with that of greater open nature of the economy with the outside world. It rarely had any negative impact over the financial system of the country due to its improved measures of prudential reforms. It did not had any contagious effect over the credit lenders through its
oader policy measures of fiscal initiatives in 2003 (Quiggin, 2011).
Post-crisis scenario of Korean economy
    After the crisis, the economy promoted better reform measures which are even more transparent leading to lowering down of the interest rates as flexibility in the movement of the rates according to the economic situation pave its way to successful growth strategies. It also increased the foreign cu
ency reserves of the country to US $ 243 Billion during 2007 from that of US $...

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