The differences of entrepreneurship in China and Japan Research Paper

The differences of entrepreneurship in China and Japan - Research Paper Example es is China; consequently, many American firms have set up their manufacturing firm there in order to take advantage of not only the low taxes but also the comparatively cheap labor. Considering this, one can identify a significant difference between the costs of doing business in China verses Japan. The tax rates in China is at 25 percent, which is one of the lowest in Asia, with some parts of China such as the Taiwan province where taxes are as low as 16 percent. As such, entrepreneurs do not have to pay much in taxes, and this encourages more people to invest therein, whether they are locals, or foreigners. In sharp contrast, Japan has the highest tax rate among the countries in the region, standing at approximately 40 percent (EU-Japan Centre for Industrial Cooperation, 2011). This is almost as high as that the United States being the second highest in the OECD member states after the USA. This inevitably has made it more difficult for small business to take off in Japan unlike i n China, and the international firms are more likely to choose Japan over China in an effort to cut costs. A decisive way in which the difference between Chinese and Japanese entrepreneurship can be differentiated is in their corporate cultures, the Japanese leverage their corporate culture with the intention of producing high quality products and services, by patiently building their global reputations on diligence and quality. When a Japanese firm employs someone, it is done under the assumption that the person will stay with the firm indefinitely and they take loyalty extremely seriously as opposed to the bottom line. For instance, a firm in Japan is expected to make decisions that will allow the firm to avoid laying off workers even in times of crisis; however, a Chinese firm may take... Entrepreneurship can be defined in among other ways, as a process that causes changes in economic systems through the innovations facilitated by individuals as they respond or generate economic activities opportunities that add value to both themselves and society in which they live and do business. Ultimately, the roles of entrepreneurs who run the small and medium sized business enterprises cannot be overrated. Entrepreneurship, especially in the small and medium size enterprises is undoubtedly an integral part of the economies of both Japan and China. Despite the many differences that exist in the entrepreneurship, in the two countries, it noteworthy that the business cultures in both countries are closely related and unlike their western counterparts, business transactions are personalized and people oriented. Foreigners wishing to start a small business in either country have to be well versed in the business cultures of the respective countries, and failure to do this can resul t in frustration. Personal trust is valued in both countries and especially in Japan, contracts are not considered final and are open to be renegotiated, and one needs to be introduced to clients and customers by someone who knows them, as opposed to just approaching them as is characteristic of business interactions in the west. However, despite the cultural similarities, entrepreneurs wishing to start or run a successful business in any of these two countries will encounter a variety of different situations depending on the country in question.