ENGLISH NOTARIAL COURSE

English Notarial Course

English Notarial Course

Between 2001 and 2006, Asia's economies accounted for over half the world's growth in gross domestic product (GDP). During this period, the United States contributed 19% of the total increase in global GDP; Asia's contribution was 21% (Economist, 2006). But even these statistics understate Asia's real importance in the world economy because current exchange rates do not take into account the fact that a dollar buys much more in most Asian countries than it would in America or Europe. Measured in purchasing power (PPP) terms, Asia would look even more important as a growth engine.

It is hardly surprising, therefore, that companies headquartered in developed markets, where economic growth is no more than 3% or 4% in boom times and zero or negative when things are slow, are looking to tap into Asia's rapid expansion. China, which has consistently notched double-digit growth rates for more than a decade and, more recently India, which grew by 8% in 2006, look particularly attractive—especially as together they are home to over 2.4 billion people. That is not to forget the Association of South-East Asian Nations (ASEAN)—which has an additional population of 560 million—and Japan, which has a population of 120 million and is still the second-largest economy in the world. But what will it take for Western companies to benefit from Asia's potential, as it becomes an ever more powerful force in the world economy?

Four Major Shifts In The Asian Competitive Environment

Four shifts occurring in today's Asia are particularly significant: the demise of asset speculators, China's scattering of the pattern of orderly Asian “flying-geese” development and India's recent takeoff, the breakdown of national economic “baronies,” and the decay of “me-too” strategies.

The Demise of the Asset Speculators

Profitable strategies are supposed to draw their lifeblood from creating new value by finding ways to provide customers with goods and services that either better fit their needs or do so more efficiently than competitors' goods and services. If we are honest, however, that was not the way a lot of companies in Asia made money during the 1990s boom. Instead, they grew rich through asset speculation: buying assets ranging from real estate to acquiring rival firms or building large manufacturing facilities and letting the rising prices of these assets swell the market value of their companies. Even as they continued to benefit from asset price inflation, too many senior managers in Asian companies were happy to bask in the illusion that they were creating new value through world-beating competitiveness and thriving in a dynamic, open market. The same was true for many of their multinational counterparts operating in the region whose management was more inclined to attribute their success to brilliant strategy and execution than to favorable market conditions.

The Asian financial crisis of 1997 shattered those illusions because, almost in a stroke, it removed the windfall of rising asset prices that had been the unspoken secret of success in many Asian businesses. Instead of capital gains, as asset prices rose year after ...