Term Paper: Best Practices Investment Promotion

Pages: 10 (3387 words)  ·  Bibliography Sources: 1+  ·  Level: Master's  ·  Topic: History - Asian  ·  Buy This Paper

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[. . .] The nation has over 120,000 sq. km of farmland, which means that around 10% of the total size of the entire country is land area which can be used for agriculture (people.com.cn, 2007). In fact, when it comes to agriculture, China is able to grow a wealth of cash crops such as wheat, rice and corn, among a range of other cash crops along with around 70,000 sq. km of fresh water lakes that offer aquatic crops as well (people.com.cn, 2007). China also has abundant rainfall each year (6 trillion cubic meters) which make it a strong candidate for theoretical hydropower "Theoretical hydropower resources provided by the country's rivers amount to 676 million kw, of Which 378 million kw can be exploited for power generation, ranking first in the world. The distribution of such hydropower resources is uneven: they are concentrated in southwest China" (people.com.cn, 2007). China also has deposits of all the mineral found on planet earth, many of which are high ranking such as tungsten, antimony, titanium, vanadium, zinc, and many others (people.com.cn, 2007). The plant and animal sources which naturally originate in China is also intriguing to the foreign investor as it makes China look like an exotic home to species like the giant panda and the golden monkey and the metasequoia and the dove tree (people.com.cn, 2007). In addition to the stunning array of plants and animals, the marine resources of China in conjunction with the sand and salt available, makes china an attractive investment. However, the picture isn't entirely ideal: "…owing to its huge population, its per-capita natural resources, such as land, water and mineral resources are not rich. Besides, the geographical distribution of its natural resources is not even. Take coal for example: of more than 760 billion tons of total coal deposits, more than 70% are concentrated in Shanxi, Shaanxi and Inner Mongolia, whereas only 1.4% is found in nine provinces in southern China" (people.com.cn, 2007). This means that while China has a true wealth of natural resources, they're not distributed with an equality or harmony or reason.

Japan: Infrastructure and Natural Resources

Unlike China, Japan's interior infrastructure is a picture of modernity and efficiency and absolutely attractive to the discerning investor. The infrastructure of Japan is consistently being expanded and upgraded and represents a paragon of advancing technology. The best example of this is Japan's shining network of roads and expressways which wind throughout the country. "It consists of 1,152,207 kilometers (715,981 miles) of highways, of which 863,003 kilometers (536,270 miles) are paved. They include 6,114 kilometers (3,799 miles) of expressways. The number of motor vehicles increased from 70,106,536 in 1995 to 73,688,389 in 1999. Major development projects to expand the Japanese highway network include a $32-billion project for the construction of a second Tomei-Meishin Expressway, connecting Tokyo and Kobe via Nagoya. The length of Japan's railways is 23,670 kilometers (14,708 miles), more than half of which is electrified" (nations, 2013). There's a reason why Japan is world famous for its high speed trains. These trains are dazzling an efficient and represent a truly cost effective and environmentally sound way to travel around the country. This is not to imply that Japan has not taken advantage of the fact that the country is surrounded by water and has thus created a highly advanced sea transportation system with ports and harbors all over its perimeter along with a roust fleet of merchant marines (nations, 2013). Furthermore, Japan also has an advanced and truly comprehensive air transportation system which serves all the major cities throughout the nation; Japan continues to update and expand these airports, making them safer and more accommodating (nations, 2013).

On the other hand, Japan does not have the wealth of natural resources that a country like China has. When it comes to agriculture and forestry, Japan generally has small farms, with just a portion of the land in the entire country idea for farming, with mountains covering the rest. Another issue with agriculture is that the bulk of the land that is useable for farming is in areas where many industrial sectors call their home, leading to fierce rivalries. "Japan was largely self-sufficient in rice up to World War I, but rising population pressure and poor soils combined to increase the need for food imports. Such imports came initially from the Japanese colonies of Korea and Taiwan, and elsewhere since World War II" (Healy). Though Japan has limited space for farming, the soil that is useable is very productive, growing cash crops like wheat, barley and oats; the land which is covered in forests makes forestry a major industry and an important import. However, fundamentally one can summarize that Japan has a poor amount of natural resources and its overall success depends on the raw materials which are imported. For instance, resources connected to energy are a major need for Japan; the nation has to import the bulk of its crude oil from the Persian Gulf (Healy). Oil is a major resource that Japan relies upon but which does not occur naturally in the country.

On the other hand, some scholars explain that one resource that Japan has that is superior to most nations around the world is that it has an educated and willing labor force. The country is populated by some of the brightest and most innovative minds on the planet, and all these people are committed to working hard and advancing the nation.

Rights of the Investor

The country that offers best investor protection is Japan. While Japan is a smaller country, with limited national resources, they have the track record of history to demonstrate progress, advancement and ease of business. One can base these criteria on the categories examined already, legal climate, business climate, regulatory bodies, natural resources and infrastructure. Japan is a country which simply doesn't have the developmental roadblocks that China is facing. While China has made improvements in leaps and bounds, it is still a developing country. The fact that it is still transforming means that it's more of a risky investment. However, in spite of the inherent risk of China, it could offer much more substantial returns. This is because China is a larger country which has so much more to offer in terms of natural resources and geography. However, the rights of the investor would be substantially compromised because China still has a treacherous amount of corruption at the governmental and local level, making anything from starting a business to investing in a business a frustrating process fill with bureaucratic issues.

Regional and Global Economy Issues

China, while still a developing nation, is truly ensconced in the global economy of the world and the regional economy of Asia. "Analysts and observers fear that China may not be able to bear the short-term slowdown and may turn back to the traditional model of growth" (Singh, 2012). Part of these concerns are as a result of the fact that China has invested so heavily in its infrastructure projects, just as its growth fell to a truly low point (Singh, 2012). "In recent months, China's economy has seen a 'rebound' engineered by looser lending and a renewed surge in investment… Markets have cheered, but others worry that China's new leaders may be shying away from the tough choices that must be made to get China's economy back on track" (Singh, 2012). China is a large enough country and dependent on exports enough that the rest of the world will acutely feel their highs and lows. China's economic decisions cannot help but influence the world economy.

Japan is incredibly integrated in the regional and global economy. The economic moves of Japan could have either devastating or uplifting impacts on the rest of the world, depending on what that country decides to do. For instance, just a few months ago, "the new governor of the Bank of Japan (BOJ), Haruhiko Kuroda, announced that the central bank would double the monetary base of the country -- adding an additional $1.4 trillion -- by the end of 2014 in an attempt to end the deflation plaguing the economy. To achieve that, Kuroda will buy government bonds and other assets to inject cash into the economy -- what has now become familiar as quantitative easing, or QE -- to bump inflation up to a targeted 2%" (Schuman, 2013). Some experts support this bold move, claiming that even unconventional monetary policies can help boost advanced economies and spur economic growth, something that the drastic measures proposed by the Bank of Japan might do (Schuman, 2013). This example just serves to show how truly ensconced Japan is within the global economy: any move it makes is felt by the rest of the world. This is important to the foreign investor as ultimately it means that any investment that's carefully strategized could benefit the world economy and have true trickle down and trickle around effect.… [END OF PREVIEW]

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