Asia has been brought up in the news quite a bit in the last decade because they're becoming significant players in the global markets.
But I'm doing a brief blog to discuss the where a few cultural mindsets, government and various scenarios will play into economics. Most Americans blindly chase the almighty dollar and ignore the world around them. It's rumored that most Americans don't know about the world outside of our country. Being aware of cultural differences and history is beneficial, especially in business.
I want to start out with China. If Americans don't remember the tale of Marco Polo and the opium trade, they should read up on it. If anything, China is a very old civilization. It's also a very densely populated civilization. The population density is always something to take note of.
China was so protective of their country, or maybe so annoyed by the opium users that they stopped trade altogether with the West and became an isolated country.
As I know Asians, this still holds true today. They're very densely populated, heavily disciplined and protective. This is reflective in their recent policies. China in recent past has imposed trade barriers to the U.S. and imported from their friends. Meanwhile they counterfeitted technology and bought our Treasuries purposely to keep the value of the Yuan below the U.S. Dollar. One might also note that both China and Japan both claimed a trade deficit with eachother in the same year.
This is really food for thought when reading statements from that country. Americans will bluff about the performance of the country's finances while Asia is more likely to exaggerate the plight of their economy. China still has a surplus and the development of infrastructure is a natural means of growing their economy. They have a lot of human capital (education) and the ability to thrive independant. But they're still milking the world for surplus.
As far as Japan is concerned, it's almost silly to compare our economy with theirs outside of the credit bubble. Japan had a federal deficit and trade surpluses from the U.S. in the auto market. Again, they enacted trade barriers to the U.S. Since Japan had a surplus, they're economy had real value to fall on. Again, Japan like China is a disciplined, protective country. The japanese had a recession in the 90's that lasted a while. And then again, a stimulus can't work with deficits (which is the mistake that Bush and Obama made).
But let's note the other differences between the U.S. and Japan.
1. The population density. If you can't see it, run through Tokyo during rush hour. I did, it leaves a life long impression, NYC won't ever see these crowds. Because of the density, the value of the real estate will skyrocket with a good economy. Space is a real commodity.
Culturally, it's normal for three generations of the same family to live under a roof. This is something that they've expected. The U.S. can't claim the same type of demand for housing.
2. Collective society vs. a society that thrives on individualism. Let's elaborate. In the U.S., when a CEO bankrupts his company, he gets a taxpayer funded bailout to blow on lavish parties while he loses billions more. In Japan, when a CEO bankrupts his company, he commits suicide to save face. Japan isn't a perfect country, but as you can see why Japan has outperformed the U.S.. The incentive for success is misplaced in the society that thrives on individualism.
3. Most importantly, in Japan their politicians are forbidden to be lobbied by special interest. In America, special interest runs the country whether the politicians are republicans or democrats.
Japan has arguably the most competative tech and auto industry in the world. In America, the tech (i.e. Microsoft) and auto industry have convinced our politicians to allow them to be monopolized and somehow bureaucracy was allowed to interfere with wealth creation, innovation and the basic quality of the products manufactured here. Thus the American consumer was forced to turn to imports to get quality for our declining real wages. The auto bailout can't be a guaranteed success unless the monopolies were broken up and the quality of the products were subject to competition within the U.S. How can our products compete globally if they can't compete within our borders?
With that being said, it took Japan 10 years to get over their bubble crisis. America is at a severe disadvantage to Japan in the 1990's. I will get into the details later, but I'm not going to hold my breath and wait til the credit issue is fixed because our government holds less incentive to fix the problems.