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In this report explains that the geo-political and social issues about the Asian countries. In this further explains the Tensions in Sino-US Relations, Political, Economic, Inflation, Environment and Energy about the Asian Countries.
Internationally relations to the countries are started on the end of the twentieth century and the beginning of the twenty-first century due to change in geo-political and social structures.
Geo-political situation is not political but economic. It means it is not to separate economics from politics. We all know that economics is part of the substance and base of politics, and that political motivations have been and always will be primarily economic. Indeed, we know that to isolate economic factors from the broader fabric of social relations is to eschew and distort their human significance.
For the global economic crisis and financial meltdown all corporate will need to rethink and reengineer their way of doing their business. All international power structures are unsustainable corporate behavior. USA losing its Super Power in geo-political framework. At this point of time Asian nations corporations are stable and takes a leading role in the geographically. Asian nation's corporations are looking for sustainable in the form of long term perspective.
Most probably in the business scenario Asia is connected to the geopolitics. It is located in the geographic territory. In the business scenario if a country is located in a geographic territory and has high natural resources and its help to invite the foreigners. Asia is that it is situated in the hub of geopolitical and it is a bridge connecting eastern countries with western ones. Because of the high inflation and economic stability the European and western countries are looking to do business with the Asian countries .For the business point of view it is important to run the business in the long term, for this Asia is suitable for doing business.
Tensions in Sino-U.S. relations:
Tensions in Sino-U.S relations mean the relations between the People Republic of China and the United States where as the relationship between the fastest-rising emerging economy and world's super power. Most analysts today characterize the Sino-American relations as being complex and multi-faceted. The United States and the People's Republic of China are usually neither allies not enemies. The US does not regard the Chinese as an adversary, but as a competitor in some areas and a partner in others. The First contact between China and US occurred in 1784 where the US did the trading at Canton which leads to the trading of raw material to China from US and the trading of exotics from China to US which is the beginning of lucrative Sino-US relationship. Currently the US has the world's largest economy while China has the second largest. The two countries are the largest consumers of motor vehicles and oil and the two greatest emitters of Green House gases.
The United Nations was determined to prevent the People Republic of China from taking China's seat in United Nations and asked its allies not to support PRC. It also laid restrictions on trading with China and encouraged the allies to follow suit. Fortunately both the PRC and U.S government made disparate efforts to improve relations between two major powers. In order to counter balance the soviet threat the People Republic of China decided to enhance its relations with the U.S.
Tensions in Sino-U.S. relations mostly happened in recently are
TRADE AND INVESTMENT:
The US officials worried about the Chinese innovation programs which may create the barriers to the foreign companies. And China also made a complaint against the US regarding the investment barriers on US side and citing resource investments are blocked on the national security grounds.
Google company faced many problems in China that the Chinese Government had made a rule that all foreign companies should obey the laws of China to operate in china and which made the Google to shut its Chinese language portal and to began the rerouting the searches to Hong Kong site.
TAIWAN AND TIBET:
The Tibetan spiritual the Dalai Lama made a visit to US and met the President of US Barrack Obama on February and the Chinese Government expressed the strong disapproval Obama for damaging the ties for meeting and saying that it was up to the capital of US that is Washington to repair the relations. And even Taiwan also remained as a sore point. The Government of China also talked about possibility of sanctions that selling weapons by US to island fewer than 6.4 billion dollars.
DEBT AND CURRENCY:
US say that "China is unfairly helping the exporters and it keeps its currency artificially undervalued" while China says that "the World economic recovery can be done by using the stable currency". It is nothing but a discussion about loud lobbying and issues on exchange rates which will only delay the movement of Yuan. At the same time the Chinese government has concern about the US economic policies and it also fearing value of Chinese currency Yuan can be eroded by the massive debt issuances which make the China to fund the US stimulus.
These are the main sources which made the Tensions in Sino-US Relation. These Tensions may affect the business.
As the two most influential countries in the world, there have been suggestions in the US political circles of creating a G-2 (Chimerical) relationship for the US and China to work out solutions to solve Global problems together.
This may affect the industries bottom line, sales of the company may decrease consider the example of French wine at the time of war between Iraq and US the French wine sales has been reduced to 13%.
There will be negative effect on the economic growth because of these political tensions.
The consumers or customers may not be interested to buy the international products example: At the time of China Japan war the consumers stopped buying the products from Japan and trading partner has been replaced from Japan to United States.
Ever since the US presidential elections ended in 2008, the US had always endeavored to maintain a cordial relationship with China. Both have engaged in several agreements and trade deals in order to enhance the mutual benefits available to them. However there were apprehensions in US over the value of China's currency being deliberately set low to benefit China's exporters. A free trade was crucial to both nations and while China might have shared interests in the US, it did not share American values.
Uncertainty in the future leadership of North Korea and its political instability:
Korea divided into two parts as North Korea and South Korea during the war the Peoples Republic of China sent its troops to North Korea to fight against the South Korea but at the same time United States - South Korea force was driven out of North which shows that it may affect the relationship between People's Republic of China and United States that is Sino - US Relations.
Trade relations between China and North Korea have been beset by North Korea's failure to pay on time. The trade between the two countries succumbed to a low since the North Korean nuclear test and the inefficiency of the present government in handling crisis
North Korea is a single - party state which is placed last in the list of 167 countries as most authoritarian regime. Its political system built on the principal of centralization. Thus the public activities in North Korea mainly focuses on easy guidance of events and places which are related to the military by promoting NDC (National Defense Commission) members in official power.
North Korea joined the financial institutions like IMF (International Monetary Fund), Asian Development Bank and World Bank, North Korea also joined relations like Japan- North Korea and US-North Korea to improve its economy. The North Korea had adopted the number of liberal economic laws which were aimed to attract the foreign capital but the North Korea's system and internal economic regulations were not changed. Thus it shows that the microeconomics and macroeconomics were remained same. The president of North Korea Kim Dae-Jung also requested the countries US and Japan for economic relations with the North Korea to change it and make its economy open.
The Uncertainty of future leadership and political instability leads to:
North Korea's main task is to become top in nuclear plants but it is harmful to the neighbor countries.
The North Korea's centre of political system is military which will be the threat to Asian countries.
The industries in North Korea are weak when compared to military and nuclear plants which may cause economic instability.
With China's support, although certain reform moments were initiated in the North, they are distorted and insufficient. It remains as a host at the center and mediator of talks regarding the North Korean nuclear challenge. North Korea's display of military might in late November over the South lead to the killing of two South Korean military professionals which created troubled waters and further aggravated the already tense scenario. Pretty soon, South Korea retaliated by returning fire though no casualties were reported. It remains to be seen as to how the US and China would be bring about substantial changes in the North Korean political instability and bring to a closure the bitter relations between the two Koreas.
Finally China, Japan and South Korea should work together in tandem with the US to assist in developing the failed states in Asia. It might even prove useful in the event North Korea becomes unable to pursue economic reforms and maintain political stability. :
Inflation & economic instability:
Economic Instability refers to excess fluctuation in macroeconomics that is there will be high fluctuated employment, inflation and the unsustainable growth. The high inflation is responsible for the economic instability but there are other factors which cause the economic instability are volatile bank lending, volatile price of assets, unrest in labor market, volatile levels of growth.
Some of the emerging nations in Asia are showing marks of overheating, by underscoring the policy tightening and are more flexible foreign exchange rates to handle the growing inflationary pressures, said by the Asian Development Bank. Increased inflation may show a threat for the Asian recovery. Developing Asia, some of the diverse group of economics included India, China, Azerbaijan, Thailand and Fiji, is anticipated to rise at 7.8 percent in 2011 and at 7.7 percent in 2012.
With this impact especially China could try to do more tighten the monetary policy. The rise of the inflation is a direct threat to stable and inclusive growth since the rise in the domestic prices can lead a way to social tensions.
Inflation has many effects, of which most of the effects are negative and they can hurt both the individuals and the companies. Some of the negative effects of inflation in the Asian countries are:
In this graph explains the world consumer annual percentage change to the Asian developing countries consumer inflation, annual percentage change. We can observe the rise in the inflation over a period of time.
Inflation is coming on in Asian countries. In particular the expansion of the Chinese economy owes a upward pressure on global raw material prices.
The economic instability in the Asia is caused by many factors. Some of the causes are the Sino-U.S relations, the recent pressure building in Tibet, the selling of nuclear arms to the Republic of China on Taiwan, the tensions between N.Korea and S.Korea, the recent scams seen under Indian political sphere, and the pressures building on the Middle Africa.
In the future, the ASEAN regional grouping can form a common market as ASEAN Economic Community (AEC). Singapore's former PM Goh proposed fir the establishment of an AEC by 2020 during the 8th ASEAN summit in Cambodia. Having a number of economic initiatives on trade, tourism and services, and a free movement of factors of production including capital and labor particularly professionals. In the near future there is essence of instability which disturbs the political and business environment of Asian countries.
Currency speculation is a commodious scapegoat for Asian governments which are arguing with domestic unrest. Most of the Asian economies have relatively thin currency which indicates the volume of transactions involving with their currency is little when compared to the total market.
The free trading of their currencies furnishes greater market liquidity which helps them to transact investment and trade with other nations.
Energy and environmental issues & increases in oil and gas prices:
Environment and Energy are closely interrelated with each other because the energy comes from environment and it can give negative effect on environment.
Because of increase in population and increase in the per capita demand which is placing a big strain on the natural resources. Resources include clean air, undammed rivers and retaining the natural landscapes. Thus the demand for the energy is unsustainable affected the quantity and quality of the natural resources.
The environmental issues affect the business:
As there is no availability of power which affect the business to run.
There will be climate changes which effect some industries
For example consider the climate changes like rainfall at odd times which affect the food industry and thereby affect the fluctuations in supply of food.
INCREASE IN OIL AND GAS PRICES:
The oil and the gas consumption is very essential for the sustaining growth of the economy in industrial world and it is the key for the progress in the nations working towards the prosperity. It is true that significant energy for efficient improvement. Thus as the demand increases there will be decline in the existing production. Thus it means the projected demand is not depended on the production that the challenges faced by the producers. There is flat growth in the oil demand from first five decades consider after world war II there is continuous rise on the fuel unprecedented economic growth. Similarly there is rise in demand for gas which is slightly faster than the oil demand.
The business challenges that we face in the industry that in recent years it shows that there is increase in the demand for gas and oil but there is decrease in discovery volumes when there is fluctuation but they are generally at higher prices.
There are 3 conditions which are present when the oil and gas prices are taken off are:
Inflation was accelerating.
The labor cost was squeezing margins.
The central banks were tightened.
In future gas demand is very high. According to global in gas demand the average of gas will be increased by 1.5 % per every anum.
According to my research i found that change geo-political may effects the change in economics. In this mainly explains the tensions in China - US relations that may affect the many countries. Both of them trading partners because they are super economy grow and fast growing economy. In this when the geopolitical can changes the economy also changes because the economy depends up on the political issues. Many western countries are looking to trade business in Asian countries. Because Asian economy is a standard economy. In this when the inflation increases interest rate decreases.
Asia is largely young, rural, and poor region. In Asian countries social protection has largely neglected. These results indicate that, while Asian economies cooperate in regional production and distribution networks, they also compete in the export of labor-intensive manufacturing goods to third markets. This competition makes individual countries in Asia resistant to allowing their currencies to appreciate unilaterally relative to the currencies of neighboring currencies.