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BUS243 Chinese Business Unit Information and Learning Guide TMA, 2017 Professor Malcolm Tull Ms Sreeparna Saha School of Business and Governance © Published by Murdoch University, Perth, Western Australia, January 2017 .
T his publication is copyright. Except as permitted by the Copyright Act no part of it may in any form or by any electronic, mechanical, photocopying, recording or any other means be reproduced, stored in a retrieval system or be broadcast or transmitted without the prior written permission of the publisher. CONTENTS UNIT INFORMATION ONE Introduction 3 TWO Resources for the Unit 7 THREE Assessment 9 LEARNING GUIDE Topic ONE Introduction: Why Chinese Business? 16 Topic TWO History and Culture of China 17 Topic THREE China’s Socialist Market Economy 18 Topic FOUR China’s Foreign Trade Regime 19 Topic FIVE Chinese Business Structure 20 Topic SIX Chinese Management Systems 21 Topic SEVEN Marke t Entry Strategies into China 22 Topic EIGHT Negotiating with the Chinese 24 Topic NINE Chinese Competitiveness 25 Topic TEN Intellectual Property Rights in China 26 Topic ELEVEN China’s Financial System 27 Topic TWELVE Overview and Revision 29 Workshop Prog ram 30 Appendix 33 BUS243 Chinese Business BUS243 Chinese Business Unit Information 2 Unit code Unit information ONE Introduction How to use this Learning Guide This Learning Guide contains topic by topic information including: • Objectives and introductory notes to each topic • List of required readings • Key concepts • Workshop /discussion topics • Written activities • Other learning activities This information is designed to help you move through the unit in a way which will lead to thorough, critical and reflective learning. Unit overview This Unit will introduce the students to the business culture of China that has emerged after the end of the Mao Era, and will provide an essential tool- kit to establish productive business relationships with the Chinese, be it o utside or in side the People's Republic of China. The unit will teach students how to establish, negotiate and manage business enterprises, particularly joint ventures, in China. It is designed to equip students with the necessary cross -cultural skills to operate efficiently when doing business in China, or travelling in China. Also, the Chinese legal and regulatory system, together with conciliation and arbitration procedures in case of business disputes will be other areas of learning in this unit . All this will be approached with in the corpus of a borderless economic and commercial world. The first three lectures will introduce students to the broader issues of Chinese history, cult ure and political economy. This historical, cultural, and socio -political background is essential to any foreign entrepreneur or negotiator to conduct business in China successfully .
Welcome to BUS243: Chinese Business! Acting Unit Coordinator The acting coordinator for this unit is Ms Sreeparna Saha.
Mob: +61 415951527 Email: [email protected] This unit guide was originally written by Dr Ameer Ali. It was r evised by Professor Malcolm Tull, January 2017. BUS243 Chinese Business Aims and Learning Objectives The broad aims of this unit are to : • Develop a robust understanding of Chinese cross -cultural issues and business negotiation practices. • Equip students with the theoretical tools and knowledge to operate with confidence in the Chinese business environment .
• Make students understand the uniqueness of Chinese business behavior so that they are made aware of the limitations of existing theoretical knowledge about commercial enterprises. The learning outcomes/acquired skills of this unit are : • A concise knowledge about Chinese business culture. • Lesson s of success and failure s by foreign companies that have ventured into China • Familiarity with the Chinese hierarchical structures, its decision making and approval processes and officialdom • Knowledge about the Chinese Joint Venture and other business related legislation s impacting upon Chinese Business Enterprise Development • Aware ness of the principles of trust and interpersonal relations that lay the foundations for the ultimate success of business ventures in China.
Students in this unit will be required to actively participate and demonstrate the capacity of critical thinking, both during class time and in their written assignment work. Graduate attributes This unit will contribute to the development of the following Graduate Attributes: 1. Communication: The ability to communicate effectively and appropriately in a range of contexts using communication, literacy, numeracy and information technology skills. 2. Critical and creative thinking: The ability to collect, analyse and evaluate information and ideas and solve problems by thinking clearly, critically and creatively. 3. Social interaction: A capacity to relate to and collaborate with others to exchange views and ideas and t o achieve desired outcomes through teamwork, negotiation and conflict resolution. 4. Ethics: An awareness of and sensitivity to ethics and ethical standards on interpersonal and social levels, and within a field of study and/or profession. 4 Unit code Unit information 5. Global per spective: An awareness of and respect for the social, biological, cultural and economic interdependence of global life. 6. In-depth knowledge of a field of study: A comprehensive and in -depth knowledge of a field of study and defined professional skills where appropriate Prerequisites Nil.
How to study this unit The lecture topics are set in a sequence starting with an overview of China’s history, geography, culture and economy. Topics relating to contemporary Chinese business structures and practices follow the historical overview. Printed lecture notes are pro vided for each topic and should be read before each workshop. It is recommended that students keep abreast of current global trade and financial developments published in the relevant newspapers and journals as these relate to China. Learning activities There is a two -hour workshop in each of the teaching weeks. All students are required to give a workshop presentation. Topics will be allocated at the first workshop. The workshop topics are listed at the end of reach topic. Time commitment As this is a 4 credit point unit, we expect you to spend on average 13 hours per week for the total weeks of this teaching period (or 200 hours overall) working on this unit. Attendance requirements Students are expected to actively participate in their own learning. Attendance at all workshops is expected. Workshop participation and presentations are assessed. Unit changes in response to student feedback This unit is updated each year to take account of changing economic issues and policies and student feedback.
BUS243 Chinese Business Study schedule Session Topic Assessment items Due 1. Introduction: Why Chinese Business? Chinese Business in Regional and Global Contexts 2. History and Culture of China 3. China’s Socialist market Economy 4. China’s Foreign Trade Regime 5. China’s Business Structure 6. Chinese Management System 7. Market Entry Strategies into China 8. Negotiating with Chinese Mid-semester test Week 8 Date TBA 9. Chinese Business Competitiveness 10. Intellectual Property Rights Essay Week 10 11. China’s Financial Structure 12. Overview and Revision 6 Unit code Unit information TWO Resources for the unit Unit materials To undertake study in this unit, you will need: Essential textbook Liu, Hong (2009) Chinese Business: Landscapes and Strategies Routledge, New York. Roger A. Philips, Eugene P. Kim (2016) , (eds.) Business in Contemporary China Routledge, New York. You are expected to purchase th ese text s. Business in Contemporary China is, however, available online via My Unit Readings. There are also hard copies of both texts in the Library. Other references Other recommended texts are: Min Ding and Jie Xu, The Chinese Way, Routledge, 2015.
Barry Naughton, The Chinese Economy , The MIT Press, 2007.
Min Chen, Asian Management Systems, Thompson, 2004, 2 nd edition. Ambler, Tim and Morgen Witzel (2004) Doing Business In China, 2 nd edition, RoutledgeCurzon, London. Story, Jonathon (2003) China: the race to market, Prentice Hall, London. Tian, Xiaowen (2007) Managing International Business in China, Cambridge University Press, Cambridge. Tubilewicz, C. (2006) Critical issues in Contemporary China, Routledge, Abingdon, UK. Wu, Jinglian (2005) U nderstanding and Interpreting Chinese Economic Reform, Thomson, Mason, Ohio, USA. Zheng, YongNian (2004) Globalization and State Transformation in China, Cambridge University Press, Cambridge, UK. BUS243 Chinese Business Online resources including web pages The Unit Welcome Page, Online Unit and lecture notes can all be accessed from your My Units page. Plea se note that the lecture notes are meant to provide only a guide to your own reading and do not cover in detail every aspect of this unit .
There a large number of useful resources on the internet . A few are listed below :
The following monograph, available online, is a useful general reference for this unit: World Bank and the Development Research Center of the State Council, P. R. China.
2013. China 2030: Building a Modern, Harmonious, and Creative Society .
Washington, DC: World Bank. DOI: 10.1596/978- 0-8213 -9545- 5. World Bank, Ease of Doing Business in Chi na http://www.doingbusiness.org/data/exploreeconomies/china/ World Economic Forum, Global Competitiveness Report http://reports.weforum.org/global -competitiveness -report -2015- 2016/economies/#economy=CHN The Ten Principles For Doing Business In China - Forbes http://www.forbes.com/sites/insead/2012/03/06/the -ten -principles -for- doing - business -in -china/#46544fa31176 Library resources Electronic Course Material & Reserve information:
All essential readings are available on My Unit Readings https://murdoch.rl.talis.com/index.html. Past Exam papers: These may be accessed via the Library’s database. 8 Unit code Unit information THREE Assessment Assessment for this unit is conducted in accordance with the Assessment Policy. The Assessment Policy can be found at: http://www.murdoch.edu.au/index/atoz/A#assessment. Schedule of assessment items You will be assessed on the basis of:
Assignment Mark Due Date 1. Mid-semester test 15% Week 8 Date TBA by Kaplan PM Team 2. 3. Essay Workshop discussion and participation 25 % 10 % Monday of Week 10 4 . Examination (t wo hours) 5 0% Date TBA Assessment details Workshop Presentation/Participation Internal students will have a weekly workshop session beginning in session 2 of the unit. All students are required to give a workshop presentation. Topics will be alloca ted at the first workshop. The workshop topics are listed after Session 12 .
Assessment Criteria Workshop presentations should be 10 -15 minutes long. Students need to exp lain the topic they have been studying, why it is important and how the topic has been examined in the references they have read. In order to facilitate discussion, students must distribute a one or two page handout to all members of class. Students may wish to provide tables and/or graphs as part of their handouts. The use of PowerPoint is encouraged but not required. After each presentation there will be a general class discussion. Everyone in BUS243 Chinese Business the class should be prepared to offer constructive comments and criticisms. At a minimum it is important that all students read the essential references for each topic. See the Appendix for a marking guide. Mid -Semester Test This test will take place during Week 8 at a time to be advised . The test will cover material from sessions 1 to 7 of the semester. You will be required to write concise notes on FIVE of TEN topics. In your answer you should: (a) Show that you understand the meaning of the topic (b) Briefly illustrate the use/importance of the topic to C hinese Business The time allowed to complete the test is 1 hour and 10 minutes. Kaplan will advise on the timing and venue for the test. If you have any questions about the test please contact your lecturer. If you miss the mid -semester test for a legitimate reason such as illness , the weight of the test will be added onto the weight of the final exam. There will be no make -up for this test. The Essay Internal students are requi red to complete one essay of 2, 000 words. These word limits exclude footnotes, graphs, tables and bibliography and should be regarded as an absolute maximum. Assessment Criteria The essay is intended to test your ability to critically analyse arguments and issues in Chinese Business. When marking the essay your tutor will be looking for evidence of wide reading and an ability to present a cogent, reasoned argument. A concise essay directly answering the question will score higher marks than a lengthy one containing a large number of irrelevancies. The essay must be fully referenced using the Chicago system. For details of this style of referencing see http://libguides.murdoch.edu.au/Chicago . The essay will be assessed using the standard Kaplan individual essay paper mark sheet. Essay Topics Students can choose either of the following topics: T opic 1 : Outline the main features of the ‘new normal’ phase of China’s economic growth. OR T opic 2 : What is ‘shadow banking’? Does it pose a threat to the stability of China’s financial system? 10 Unit code Unit information The following apply to all students. • Extensions of time to submit assignments will normally be granted only to those students whose work has been significantly affected by illness and who apply for an extension BEFORE the scheduled submission date. • Please note reasons which are insufficient to warrant an extension include: computer failures; car failures or other transportation difficulties; work conflicts and other study commitments. “Losing” work through “computer failure” is not accepted as a reason for late submission of an assignment; students using a computer should know to frequently save and backup, and always have done so. • The deadline for submission is 5 pm on the due date. Late submission will be penalised at 5 per cent per day or part thereof. • No essays will be accepted two weeks after the due date as assignment return will have begun. • For your own protection, students should keep a copy of all submitted work. • Students are encouraged to use the Urkund plagiarism -checking software prior to submission of their essay. Urkund is a pattern -matching system designed to compare work submitted by students with other sources from the internet, journals/periodicals, and previous submissions. Its primary purpose is to detect any submitted work that is not original and provide a thorough co mparison between the submitted document and the original sources. • Urkund replaces Turnitin (the previous pattern -matching software used by Murdoch) in 2016. • More information about how to avoid plagiarism is contained within the Murdoch Academic Passpor t (MAP) unit https://moodleprod.murdoch.edu.au/course/view.php?id=2684 . • University policies on academic integrity can be accessed here: http://our.murdoch.edu.au/Educational -techno logies/What -you -need -to -know/ Electronic Assignment Submission - all students - LMS online • When submitting assignments electronically, please use the Electronic Cover Sheet available at:
Murdoch website via Search function type in Assignment Coversheet • All assignment submission is online via the 'Assignments Tab' in LMS. Please note the date and time of the online submission is Perth Western Australian time and students are responsible to allow for any time difference. The BUS243 assignment box will be closed at the time and date specified of the session it is due and after that time the assignments are then to be submitted into the late box. Therefore, unless students have already negotiated an extension, any assignment is late after the specified t ime and date and is subject to a late penalty per 24 hours that it is late (this includes weekends and public holidays). • All assignments are to b e submitted in Microsoft Word. The coversheet and assignment should be submitted as a single file. BUS243 Chinese Business • So your wo rk does not get mixed up with that of other students use a file name which follows the following convention: unit code, assignment number, the first three characters of your surname, your first initial and your student number e.g., BUS243Assign1ChoJ1234567 8 for student Jun Chong. • You must wait for confirmation from LMS that your upload has been successful and you should keep a copy of both your assignment and the confirmation from LMS. It is suggested that you log out and log in again to make sure it is th ere. A Guide to LMS online assignment submissio n is located on the Murdoch web. Final Examination The final examination is designed to provide you with an opportunity to consolidate what you have learned in this unit. The exam marker will be looking for evidence of wide reading and an ability to present cogent arguments on aspects of Chinese Business. The mechanics of the exercise are such that you must answer 4 essay questions in two hours. You will be given ten minutes to read the paper before the exam starts. Past exam papers are available on the Library’s Website .
For those of you not used to taking exams the following points may be helpful: • Read the question carefully . A concise essay directly answering the question will score higher marks than a lengthy one containing a large number of irrelevancies. • Plan your answers. Make a note of all the points which seem to be relevant to the question. Remember to give your essay an introduction and a conclusion. • Allocate your time. You are required to answer four essay questions in two hours which means that you should spend approximately 3 0 minutes on each essay. If you are short of time, finish an answer in note form. • Try and leave time to read your answers. This is so that you can correct any errors.
If you have any questions about the examination please do not hesitate to contact the Unit Coordinator or your tutor. The examination will be held during the normal University assessment period. For further information about examinations refer to http://our.murdoch.edu.au/Student -life/Get -organised/Abou t-exams/Exam - help -and -support/. 12 Unit code Unit information Determination of the final grade Assessment is continuous and students are not required to pass the final exam to pass the unit. Your final result will be reported by the following letter grades. In order to achieve a particular grade you will need to attain the corresponding percentages listed in this Guide. Seethe Assessment Policy regarding grades. Notation Grade Percentage Range HD High Distinction 80 -100 D Distinction 70 -79 C Credit 60 -69 P Pass 50 -59 N Fail 0-49 DNS Fail Fail. The student failed to participate in assessment components that had a combined weighting of 50% or more of the final mark. SA Supplementary Assessment 40 49%* *The award of the grade of SA shall be at the discretion of the Unit Coordinator except where clause 11.8 applies. SX Supplementary Exam 40 49%* *The award of the grade of SA shall be at the discretion of the Unit Coordinator except where clause 11.8 applies. There is a possibility of marks being moderated to ensure equity of marking by different tutors on the same unit and/or to ensure consistency across assessments and examinations on different offerings of a unit. BUS243 Chinese Business Academic Integrity Murdoch University encourages its students and staff to pursue the highest standards of integrity in all academic activity. Academic integrity involves behaving ethically and honestly in scholarship and relies on respect for others ’work and ideas. Lack of academic integrity, including the examples listed below, can lead to serious penalties. Find out more about how to reference properly and avoid plagiarism at : http://www.murdoch.edu.au/teach/plagiarism Plagiarism Inappropriate or inadequate acknowledgement of original work including:
• Material copied word for word without any acknowledgement of its source • Material paraphrased without appropriate acknowledgement of its source • Images, designs, experimental results, computer code etc used or adapted without ackn owledgement of the source. Ghost writing An assignment written by a third party and represented by a student as her or his own work. Collusion Material copied from another student ’s assignment with her or his knowledge. Purloining Material copied from another student ’s assignment or work without that person ’s knowledge. Adapted from the Assessment Policy, Plagiarism and Collusion http://www.murdoch.edu.au/admin/policies/assessment.html 14 Unit code Unit information Chinese Business BUS243 Learning Guide Introduction This Learning Guide contains information on how to study each topic, including: • Introductory information • How the topic contributes to the unit’s learning outcomes • Resources required for the topic • Learning activities/tasks This information is designed to help you move through the unit in a way that will lead to through, critical and reflective learning. The study questions will help consolidate your learning and assist you to become an independent learner. The learning outcomes help to pinpoint what you need to understand from your readings. The detailed information about the learning activities and readings is available on the LMS site. The LMS site presents information on a session -by -session basis. This session structure corresponds with the study schedule in the unit guide. Stu dents are expected to visit the LMS site regularly for updates and instructions. 15 Unit code Learning Guide SESSION ONE Introduction: Why Chinese Business? Chinese Business in Regional and Global Contexts After an overview of the Unit, together with an explanation of the objectives to be achieved during the semester , the lecture will begin by answering the question why China and Chinese business have become topics for international dialogue and discussion today? To place the study of Chinese business in historical and cont emporary context s the regional and global economic and commercial development over the last one hundred years or so will be discussed. To understand the Chinese economy and business environment of 201 6, it is necessary to see how it has reached its current status , and consider the role of the main players who have shaped China’s recent history. Concepts to Learn Eurocentricism; sinocentricism; regionalism; globalization; Maoism; planned economy; unequal treaties; national humiliation of China; Cultural Revolution; The Great Leap Forward ; Mandate of Heaven; the ‘new normal’ .
Learning Objectives After studying this section you should be able to: • identify major landmarks in the history of modern China • understand how the Chinese economic system evolved after 1978 • understand the impact of globalisation on China’s economy Essential Readings Set Text (Liu): Chapter 1 Set Text (Philips and Kim): Chapter 1 , esp.pp.11-18. Recommended Readings One cannot study contemporary China comprehensively without learning about Mao Zedong and his role in shaping the history of that country and society. There are number of books on Mao’s life and achievements. I recommend all students read the book below ; it is short and easy reading. A copy of this book will be placed in close reserve at the Murdoch University Libr ary. Rebecca E. Karl, Mao Zedong and China in the 21 st Century World, London: Duke University Press, 2010. For an overview of China’s growth see ‘China’s Path: 1978 –2030’, pp.4 -14. In World Bank and the Development Research Center of the State Council, P. R. China. 2013. China 2030: Building a Modern, Harmonious, and Creative Society . Washington, DC: World Bank. DOI: 10.1596/978- 0-8213- 9545-5. Audio -visual media 2017 China Macroeconomic Outlook: Goldman Sachs Research's Andrew Tilton. https://youtu.be/MlV5dqeGrAg 16 Unit code Learning Guide SESSION TWO H istory and Culture of China Although t his lecture covers the history of China from the ancient past to the present the main focus of the lecture will be on the significance of history to the Chinese people and their leaders, including business entrepreneurs. China is one nation that feels prou d of its history and its leaders expect foreigners to have some knowledge and understanding of the Chinese past. The same applies to Chinese culture. The lecture will discuss the Confucian foundations of Chinese culture and will relate it to the broad er issue of ‘Asian Values’. It will be shown that familiarity with and an understanding of these values will become handy for foreigners when negotiating business deals in China. Concepts to Learn Right Historian; Left Historian; Grand Historian; Confucianism; Asian Values; capitalist spirit; Guanxi, Mianz; Ren; Li. Learning Objectives After studying this section you should be able to: • understand the main features of the Asian cultural doctrines of Confucianism, Japanese communalism and Buddhism • Identify key Asian values • Explain Chinese business culture and guanxi Essential Readings Set Text (Liu): Chapters 1 and 2; Chapter 4 pp.184 -187; Chapter 6, p.255. Set Text (Philips and Kim): Chapter 1, esp.pp.11 -18 and Chapter 3, esp.pp.113 -117 and pp.134 -151. S. Rosefielde, Asian Economic Systems (Singapore, 2013), Chap 3, pp.48 -60. http://0- lib.myilibrary.com.prospero.murdoch.edu.au/Open.aspx?id=486888. Recommended Readings ‘Timeline: South China Sea dispute’, Financial Times July 12, 2016 Availab le on My Unit Readings. Ding and Xu, The Chinese Way , 2015, parts I – VII Jonathan Fenby, The Penguin History of Modern China, 2009 Frederick Wakeman, Jr., The Fall of Imperial China, London: Macmillan Press, 1975.pp1 -3,pp 65 -69, pp 111 - 129, pp225- 255.
E dward Moise, Modern China: A History , New York: Longman, 1986. ppviii -xv, pp 1 -27. Audio -visual media 20 Tips on Chinese Culture for Successful Business. https://youtu.be/H6g7tUcoF3I 17 Unit code Learning Guide SESSION THREE China’s Socialist M arket Economy This lecture covers the current political and economic structure. The reforms of Dang Xioping will be the particular focus of this topic . The changing economic and political scenario in the world in general and in the Asian region in particular will be highlighted. How China exit ed from a planned economy will be discussed in light of the experience of Russia. The final part of the lecture will deal in detail on the decline of “Washington Consensus” and the rise of “Beijing Consensus”. Conce pts to Learn Market Socialism; Bird -cage economy; Big -Bang approach; gradualism and pragmatism; Washington consensus; Beijing consensus; Janus -faced state -led growth; Newly Industrialized Economies (NIEs); ope n-door economic policy .
Learning Objectives After studying this section you should be able to: • understand the contribution of the state to Chi na’s economic development • explain the main features of Chinese market communism • understand the Washington Consensus and the Beijing Consensus Essential Readings Set Text (Liu): C hapter 5.
Set Text (Philips and Kim): Chapter 1, esp.pp.11 -18 and C hapter 2, esp.pp.39 -46. Williamson, J. ‘Is the “Beijing Consensus” Now Dominant?’ Asia Policy, number 13 (January 2012), 1 –16. Recommended Readings Stefan Halper, The Beijing Consensus , New York: Basic Books, 2010 Scott Kennedy, ‘The myth of the Beijing Consensus’ in S. Phillip Hsu et. Al., (ed) In Search of China’s Development Model , Routledge Contemporary China Series, London, New York: Routledge, 2011, pp. 27- 44. Audio -visual media http://video.ft.com/4791614289001/The -end -of -the -Chinese -miracle/World?cat=china- slowdown& connectionsapac=y 18 Unit code Learning Guide SESSION FOUR FDI and China’s Foreign Trade Regime When China opened its economy to the world one of its main objectives was to attract foreign investment and modern technology. FDI and foreign trade are inseparable and t his topic covers the recent history of China’s foreign trade and FDI , from the ‘lean to the East’ policy of the post -liberation period to the ‘open door policy’ after 1976. T he role of foreign investment and the significance of Special Economic Zones will also be an alysed.
In discussing FDI the crucial position of Hong Kong and the role of the Chinese Diaspora will be highlighted. Concepts to Learn Foreign Direct Investment; portfolio investment; flexible, fixed, and managed exchange rates; Special Economic Zones; technology transfer; dumping; bilateral and multilateral trade; current account balance; comparative advantage. Learning Objectives Aft er studying this section you should be able to: • define FDI • understand the contribution of FDI to China’s economic development • explain the role of Special Economic Zones • understand the role of the Chinese Diaspora Essential Readings Set Text (Liu): Chapter 6.
Set Text (Philips and Kim): Chapter 2, esp.pp.68 -79. Recommended Readings Barry Naughton, The Chinese Economy, chapters 16 and 17. Lida Yueh, The Economy of China, Cheltenham UK, Northampton MA, USA, 2010, pp.206 -229. Jun Zhang et al., Trans formation of the Chinese Enterprises , Gale*Asia, 2010, chapter 7. Audio -visual media Sens, A., University of British Columbia, Multinational Corporations http://www.youtube.com/watch?v=FCojpFwWuG0 What can the iPhone tell us about China's Trade? - RES 2016. Arie Lewin, Duke University's Fuqua School of Business, China's Innovation Challenge: Overcoming the Middle -Income Trap.
https://www.youtube.com/watch?v=7ePl91A42M4 19 Unit code Learning Guide SESSION FIVE Chinese Business Structure The categorization of Chinese enterprises and the impact of the reforms in transforming those enterprises will be the chief focus of this topic. The emergence of Township and Village Enterprises ( TVEs), Joint Ventures of various sort s, and some indigenous innovations in Chinese private enterprises wil l also be discussed.
Concepts to Learn Contractual Joint Ventures; Equity Joint Ventures; Wholly Foreign -owned Enterprises; Township and Village Enterprises; State Owned Enterprises (SOEs). Learning Objectives After studying this section you should be able to: • understand the contribution of SOEs to China’s economic development • explain the main features of Township enterprises • explain the main features of foreign -invested enterprises • explain the main characteristics of joint ventures and the reasons for their popularity Essential Reading Set Text (Liu): Chapter 6. Set Text (Philips and Kim): Chapter 2, esp.pp. 73-79 and pp.96 -107 -107 ; Chapter 7. Recommended Reading ‘Dealing with zombie enterprises in China’, http://www.eastasiaforum.org/2016/11/20/dealing -with -zombie - enterprises -in -china/?utm_s ource=newsletter&utm_medium=email&utm_campaign=newsletter2016 -11- 20 Ding and Xu, The Chinese Way , Part XI.
Jun Zhang et al, Transformation of the Chinese Enterprises, Gale Asia, 2010. Audio -visual media CGTN America, A look at China's state owned enterprises. https://youtu.be/TrR_oTmdEaE 20 Unit code Learning Guide SESSION SIX Chinese Management Systems One of the objectives of the po st-19 92 reforms was to bring the Chinese public and private enterprises under modern management systems. Com panies can be divided into three categories: s tate-owned enterprises (SOEs), people -managed companies (PMCs) and foreign capital companies (FCCs) . One aim of allowing FDI into China was to learn from foreigners how to manage an enterprise efficiently. This lectu re will deal with this issue in the context of some of the modern theories on management. Concepts to Learn M -form and U -form o rganizations; S&T Administration in China; R&D investment; patents; investment in human capital; ren. Learning Objectives After studying this section you should be able to: • have a broad understanding of Chinese management systems • explain the differences between the state- owned enterprises (SOEs), people-managed companies (PMCs) and foreign capital companies (FCCs) • understand the r ole of FDI and SEZs in bringing in modern management techniques to China • assess the benefits of modern management techniques system in advancing science and technology in China Essential Readings Set text (Liu): Chapter 7 Set Text (Philips and Kim): Chapter 2, esp.pp.96 -107 and Chapter 5 pp.214 -219 and pp. 237-239.
Recommended Readings "Made in China: three ways Chinese business has evolved from imitation to innovation", http://theconversation.com/made- in-china -three- ways-chinese -business -has -evolved -from - imitation -to -innovation -67236 Lu De -ming, Development of China in the Modern World System , Gale*Asia, 2010, chapter 7.
Chen, Min (2004). Asian Management Systems. 2 nd ed, Thomson, London, chapters 1, 8 & 9. Audiovisual media The Open University, East- West Management - Management in Chinese Cultures (3/6). https://youtu.be/zjGWYNvr9ZE 21 Unit code Learning Guide SESSION SEVEN Market Entry Strategies into China Introduction Chinese and Foreign joint venture enterprises have become very popular over the past 25 years. While some foreign companies regretted the day t hey ever ventured into China, others are beginning to reap the rich rewards they expected when teaming up with China. This lecture inves tigates the types of agreements and China's fairly recent J oint Venture (JV) legislation. We will investigate the tedious process of finding the right partner, the right site from which to operate and the long drawn out process of obtaining all the approvals at the various levels of Chinese bureaucracy.
Infrastructure costs are o f vital importance for cost/ revenue projections of JV enterprises and the SEZ's (Special Economic Zones) have gradually outpriced themselves to all but the big multi- national corporations.
We will also examine why joint management is the preferred modus op erandi for a JVC (Joint Venture Company). We will ask the question if and when a foreign joint venture partner may expect to get returns on the invested capital and what issues are involved with the repatriation of capital. Lastly, we will examine the Ch inese taxation system in relation to JVC's and their foreign investors. Concepts to Learn Market research; communication barriers; letter of intent; Sino -foreign JV -law; feasibility study; partner compatibility; China-specific cultural skill; legal registration and license; exit clause. Learning Objectives After studying this section you should be able to understand: • The c onditions required to make the establishment of a JV enterprise in China a feasible proposition. • Infrastructure requirements for the establishment of a JV enterprise in China • Staff management requirements and problems JVC's might encounter. • Joint venture and other Chinese laws that impact upon a JVC. • Chinese taxation system and how it affects JVC's and their staff and management. • Advantages and disadvantages of basing your JVC in a Chinese SEZ (Special Economic Zone) or SAR (Special administrative region). Essential Readings Set text (Liu): Chapters 6 and 9 Set Text (Philips and Kim): Chapter 7 Further Reading Ahmad Bashawir A. Ghani; Muhammad Subhan ; Malcolm Tull, ‘An empirical study of foreign direct investments of Malaysian multinationals: wholly -owned subsidiaries and international joint ventures’, Int. 22 Unit code Learning Guide Audiovisual media UK Trade & Investment, 5 steps for building a marketing plan for successful market entry to China. https://youtu.be/VBsqAa_FyOg J. of Strategic Business Alliances, 2011 Vol.2, No.4, pp.287 - 306. Bath, Vivienne (et al.); editor Duncan Freeman (1993). The Life and Death of a Joint Venture in China. Hong Kong: Asia Law and Practice. Liu, Geng (1995). Joint Venture Laws and Practice in the PRC (late 1979 to 1992). PhD Thesis, Murdoch Library Lee, Fook Hong (1999). Investment and Taxation in China. Singapore: Federal Publications. Tian: Chapters 4 & 5 23 Unit code Learning Guide SESSION EIGHT Negotiating with the C hinese Successful business managers are usually effective communicators . Effective communication and cross -cultural skills are essential for successful business negotiations. When we deal with others we are engaging in some level of relationship, and conflict is almost inevitable, and even potentially beneficial. How we, and others, handle conflict will determine whether it is constructive or destructive, but handle it we must. Being aware of personal styles of handling conflict may increase the likelihood that co nflict can be used positively. This dictum certainly applies to business negotiations with the Chinese, where students need to be aware of the Chinese style of communication and negotiation. We will now investig ate how the Chinese use the time factor in their favour and as a major bargaining chip when squeezing out ever greater concessions from their western business partners. There is nothing dishonest about this practice; it is simply the style in which the Ch inese have transacted business negotiations for millennia. Learning Objectives • Outline specific communications strategies that can be used to successfully negotiate a business or joint venture deal. • Describe the types of conflicts, which may arise, when conducting preliminary and final negotiations with Chinese business partners. • Determine what bargaining margins you require and how to skillfully play your trump cards during negotiations. • Clearly identify the laws, rules and regulations that China has in place and is planning to implement in the future in relation to setting up international business in China, including JVs. Recommended Readings The arrest in 2016 of employees of Crown Casinos in China raises some interesting issues regarding the rule of law in China. See Crown employee arrests show danger of assumptions about China’ http://theconversation.com/crown -employe e-arrests -show -danger -of -assumptions -about -china -67148 Businessman seeks pardon for China conviction’, Weekend Australian 09 July 2016: 4.
Available on My Unit Readings. Blackman, Carolyn (1997). Negotiating China. Sydney: Allen & Unwin. McNeilly, Mark (1996). Sun Tzu and the Art of Business. New York: Oxford University Press. Mann, Jim (1989). Beijing Jeep: T he Short Unhappy Romance of American Business in China. New York:
Simon & Schuster. Wee, Chow- Hou and Lan, Luh -Luh (1998). The 36 Strategies of the Chinese. Singapore: Addison Wesley. Audio -visual media Cultural difference in business | Valerie Hoeks | TEDxHaarle m. https://youtu.be/VMwjscSCcf0 Essential Readings Set text (Liu): Chapter 9 Set Text (Philips and Kim): Chapter 2, esp.pp.39 -40 and Chapter 7 pp.304 -331. 24 Unit code Learning Guide SESSION NINE Chinese Competitiveness This topic covers the various strategies that the Chinese government and private enterprises are adopting to maintain their competitiveness in the world stage. Multi -dimensional measures of competiveness will be discussed. Chinese industrial policy will be discussed in connection with Chinese foreign policy. An important section of this topic will be devoted to Chin a’s overseas direct investment and foreign economic assistance. It will be shown that the historically famous principle of comparative advantage that determines international competitiveness plays somewhat of a subsidiary role to Chinese principle s of competitive advantage. Concepts to Learn: Industrial policy; competitive advantage; energy -driven and security -driven economic aids; undervalued and overvalued currency; US -China trade rivalry; string of pearls strategy ; 21 st Century ‘maritime silk road’ ; ‘soft power’ .
Learning Objectives After studying this section you should gain knowledge about: • Comparative and competitive advantages • Chinese Industrial policy • Chinese economic assist ance to foreign countries • Link between Chinese foreign policy and economic aid • International tensions arising from Chinese competitiveness Essential Reading Set text (Liu): Chapter 8 Set Text (Philips and Kim): Chapter 3, esp.pp.113 --147. Recommended Readings For a brief introduction to soft power see Nye, Joseph S. Jr., ‘The Rise of China's Soft Power’, Wall Street Journal Asia, December 29, 2005. http://belfercenter.hks.harvard.edu/publication/1499/rise_of_chinas_soft_power.html . Availab le on My Unit Readings. Steffan Halper, The Beijing Consensus , New York: Basic Books, 2020. Eva Paus et al., Global Giant: Is China Changing the Rules of the Game ? New York: Palgrave Macmillan, 2009, chapters, 6 , 7, &8. Audio -visual media China: Global Competitiveness Report 2014 -2015 . https://youtu.be/EOhKE5KlbAY Asian View, How rising wages affect China's competitiveness. https://youtu.be/jnqRsqqEccc 25 Unit code Learning Guide SESSION TEN Intellectual Property Rights in China Introduction This topic is generally seen as an area impeding trade and business with China. Infringements of copyright still remain a concern for international business. The first section of this lecture will deal with the clash between post -1976 and pre -1976 legal systems. The cultural aspects of Chin a’s traditional legal system will be discussed in depth. The l egal challenges to China after joining WTO and the nature of Chinese legal reforms will also be considered . Concepts to Learn TRIPs and TRIMs; private property and public property rights; intellectual piracy; legal reforms; legal convergence. Learning Objectives After studying this section you should be able to: • Understand the history of IPR in China • Understand the measures taken by China to conform to international law on IPR Essential Readings Set text (Liu): Chapters 7 and 8 Set Text (Philips and Kim): Chapter 7, esp. pp.304 -312 and pp.318 -331. Hunter, Kate Colpitts Here There be Pirates: How China is Meeting Its IP Enforcement Obligations Under TRIP , San Diego International Law Journal , Vol 523, 2006-2007. (available via HeinOnline) Audio -visual media PBS NewsHour, Intellectual Piracy in China . https://youtu.be/33sI -Z1A9og 26 Unit code Learning Guide SESSION ELEVEN China’s Financial System The financial system plays a key role in China’s development by promoting monetisation, mobilising savings, allocating investment, distributing risks and managing economic stability. Under WTO membership requirements China has introduced major reforms of its financial and stock markets including greater liberalisation of interest rates, reforming the state -owned banks, easing entry restrictions on financial institutions and capital flows, and upgrading corporate governance. Nevertheless, d espite these reforms, the system “remains repressed, unbalanced, costly to maintain and potentially unstable” (World Bank, China 2030). The Asian Financial Crisis and the Global Financial Crisis focussed attention on the risks of liberalising financial markets and the global need for improvements in systems of corporate governance. In the case of China, further reforms are needed to create an efficient and sound financial system. Concepts to Learn Financial broadening, financial deepening and financial repression; stock -market; bad debt; currency issue and credit control; recapitalization ; shadow banking; financial reform . Learning Objectives After studying this section you should be able to: • Understand the development of China’s financial system • Identify the main institutions in China’s financial system • Understand what reforms are needed to create a more efficient and stable financial sector • Appreciate the dilemmas facing China in reforming its financial system as well as co nforming to WTO entry requirements .
Essential Readings Set text (Liu): pp.113 -118 and Chapter 8. Set Text (Philips and Kim): Chapter 2, esp.pp.58 -68 and pp.79 -96. ‘Financial System Reforms’, pp.115 -127. In World Bank and the Development Research Center of the State Council, P. R. China. 2013. China 2030: Building a Modern, Harmonious, and Creative So ciety. Washington, DC:
World Bank. DOI: 10.1596/978- 0-8213- 9545-5. Recommended Readings Special Report, ‘Finance in China’, Economist May 7 th 2016 (several articles from this report are available on My Unit Readings). Joshua Aizenman, Hiro Ito, ‘East Asian economies and financial globalisation in the post -crisis world’, 23 June 2016. http://www.voxeu.org/article/east- asia-s-financial- future#.V4YEWuQuB64. Kaiji Chen, Jue Ren, Tao Zha, ‘Unintended consequences of monetary and regulatory poli cies on banks’ risk- taking behaviour: A closer examination of China’s shadow banking’ 27 Unit code Learning Guide http://www.voxeu.org/article/causes-and -consequences -china -s- shadow -banking ’, 24 March 2016. Available on My Unit Readings. Barry Naughton, The Chinese Economy , 2007, ch. 19.
Wu, Jianglian Understanding and Interpreting Chinese Economic Reform (2005), Thomson South Western, Ohio, USA. (Chapter 6). Audio -visual media The Financial C risis in Historical Perspective: An Interview with James Boughton,October 11, 2008 http://www.imf.org/external/mmedia/view.aspx?vid=79160974001 Tng Boon Hwa, Senior Economist at Bank Negara Malaysia, Preventing a Financial Crisis http://www.worldbank.or g/en/news/video/2016/05/27/preventing -a -financial- crisis 28 Unit code Learning Guide SESSION TWELVE Overview and Revision Introduction The final session revises what has been covered in this unit by reviewing the topics studied, and considering what students have learned about the process of economic development in Asia. You should prepare for the final exam by going back over your notes, and reviewing the advice on the exam given earlier in this Unit Guide. 29 Unit code Learning Guide Workshop Program NOTE: In order to answer these questions it is necessary for you to have read all of the Essential Readings. Week 1: Workshop Q uestions 1. Why should we study about China and about its economy and business? 2 . What was the nature of the global and regional economic environment when China opened its doors for business in 1976?
3 . What were the impacts on Chinese businesses of the 2008 global financial crisis? How did the Chinese gov ernment react to th at crisis ?
4 What is the ‘new normal’? Week 2 : Workshop Q uestions 1. How does China’s Confucianism differ from Japanese Communalism and Theravada Buddhism? 2. How do Asian and western cultural systems differ? 3. Is culture relevant to do business? How does the Chinese culture promote or impede its business activities? 4. Is an understanding of China’s culture useful in gaining insight into contemporary Chinese behaviour? Discuss with reference to t he China South Sea dispute Week 3: Workshop Q uestions 1. Compare and contrast Russia’s exit from its planned economic model with that of China ’s experience.
2. How do you define a socialist market economy? What are the Chinese characteristics of the socialist market economy? 3. Is the Beijing Consensus an alternative to the Washington Consensus? Week 4: Workshop Q uestions 1. What made China become the main attraction for foreign investment after 1978? 2. What difficulties do foreign investors face in China? 30 Unit code Learning Guide 3. China has had significant growth in foreign trade since the 1980s. Provide some explanations for this growth. Do you think that it is sustainable? Week 5: Workshop Q uestions 1. Explain the reasons for the early success and the eventual failure of the TVEs in Chinese business structure ?
2. What are salient the features of China’s SOE reforms? 3. ‘Grab the big and let the small slip away’ . What does this imply in the Chinese style of reforming State Owned Enterprises? 4. How private are the Chinese private enterprises? Week 6: Workshop Q uestions 1. What is so unique about the Chinese management system? 2. List two approaches to get closer to your Chinese business contact. Use examples to illustrate your answer(s). 3. What do you consider to be taboo when attending a Chinese banquet hosted by your Chinese business contacts? 4. What will you observe, when giving gifts to /or receiving gifts from your Chinese business contacts (partners). Week 7: Workshop Questions 1. What do you understand by industrial policy ? 2. What do you think are the main reasons for Chinese success in international business competitiveness ?
3. Can China sustain its business competitiveness ?
4. Is there a link between China’s foreign policy and its business competition po licy? 5. Why is the world so nervous about China’s business success? Week 8: Mid- trimester Test Week 9 : Workshop Questions 1. Is there a clash between the Western legal system and the Chinese legal system? 2. How is the rule of law being implemented in China today? 31 Unit code Learning Guide 3. What specific problems do foreign investors face in China with regard to legal matters? How can they overcome these pro blems?
Week 1 0: Workshop Questions 1. What are Intellectual Property Rights (IPRs)? Why are they important? 2. What are the main IPR rules imposed on China as a result of joining the WTO? 3. To what extent is China’s enforcement of IP Rs a matter of “ The Emperor is Far Away ”?
Week 1 1: Workshop Questions 1. Why does a modern economy need a sound financial system? 2. Explain the main characteristics of the Chinese stock exchange. 3. Examine some of the banking reforms that were introduced by the Chinese governm ent and discuss their relative success or failures. 4. Do you think that the Chinese Yuan will become the global currency t his century?
Week 12: Revision 32 Unit code Learning Guide Appendix BUS 243 Marking guide for Student Presentations Student Name:
Objective/Criteria Needs Improvement Met Expectations Excellent Exceptional Marks Allocated Delivery (voice) - Communicates well, keeps audience attention, talks with confidence (no reading) 1 2 2.5 3 Delivery (visual) - Good eye contact’, confident posture and appropriate attire 1 2 2.5 3 Audio Visual Aids and Props, PPP - Clear logical progression, imaginative 1 1 1.5 2 Handling of Q and A session 1 1 1.5 2 Total Possible Marks 4 6.0 8 10 33 Unit code Learning Guide
