Firstly, East Asian countries are leaders regarding income inequality and poverty. Obviously, agricultural subsidies in rich countries are putting famers out of business in poor countries. Their incomes are also driving down by the fact that local produces in rich countries pay much less taxes than the ones import from poor countries (Make Trade Fair 2004). The inefficiency of allocation of FDI leading to the rising problem of inequality in labour costs, originate in 2000 from the 500 million poor people in Asia (Erenstein 2010).

Therefore, Western investors had to face many challenges in East Asia. Secondly, severe shortage of water mainly in northern parts, and pollution causing risk of diseases are important factors in environment issue (Erenstein 2010). Many China’s rivers had been turned into open sewers by decades of waste poured from factories and cities. A quality index of 3 or worse, of about 40% of water had been noted in the country’s river systems, so the human consumption becomes unsuitable.

Environmental problems of China are difficult to resolve. As expected by analysts, U. S. will be surpassed by China, Home of one-fifth world’s population. It will become, by mid century, the greenhouse gases largest emitter in the world (ELAW 2010). Thirdly, another big problem to consider is the Counterfeit goods. In 2006, China had been identified by European businesses as by far the most problematic market for counterfeiting and abuser of intellectual property right for European companies (Harvey ; Morgan 2007).

Counterfeit goods are supplied by many manufacturers, according to Yao (2006). The net difference between sales revenue and costs is their profits. Despite the risk of possible loss and being caught by law enforcement, investor will move in when the produced counterfeit goods profits are on the same level with average returns from the general market. In Chinese society, their life is a big problem, and their products offer less quality than quantity. Lastly, a big problem in East Asia is actually reflecting intellectual properties rights.

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The world production department is China. Nevertheless copied products increasing rapidly every year make China lose its reputation. In China, senior executives do not understand the complexities of intellectual properties, yet they make many “complaints” about intellectual properties system. They do not realize their own companies made possible mistakes in creating problems. For example, filing a weak patent application is similar to failing to register their intellectual properties at all (Harvey ; Morgan 2007).

In consequence, Australian companies possibly have their reputation fading away by cooperating with East Asia like China. Conclusion The major transformation of Asian countries after financial crisis in 1997 and the recent developments including the Global Financial Crisis was a big problem. The appearance of the financial crisis had actually brought advantages and disadvantages to Western businesses because of the structural transformation of the state, the business, the labour relation and the appearance of the regional integration of the economies in East Asia.

In the change of state, it has been played an important role in East Asian economies. In the change of business, the weakness of government financial support to domestic conglomerates has been recognized during Asian crisis. In the change of labour relation, it has been introduced that labour relations are westernizing, conventional practices are changing, the crisis had actually played a part of changing the culture, and a new HRM system.

In regional integration of the Asian economies, it has been to more interdependent to each other in the region, and FDI interdependence. Furthermore, the perspective of Western business seeking to enter the Asian market has four opportunities because of labour cheap, exchange culture, environmental benefits, and creates employment and finance. However, it also has challenges because of income inequality, pollution problems, Counterfeit goods, and intellectual properties rights. All of this, the opportunities in Asia are huge and so are the challenges.


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