INFRASTRUCTURE UNIVERSITY KUALA LUMPUR (IUKL)
IN COLLABORATION WITH
ALPHA COLLEGE OF TECHNOLOGY (ACT)
SUBJECT CODE: BUSS3420
SUBJECT NAME: INTERNATIONAL BUSINESS
EN. SHAMSUL AMRAN ABDUL KHALID
SITI JULIA ZULIANA BINTI MOHD JAFFRI(16070230)
RABIATUL ADAWIYAH BINTI ABD WAHAB(16070225)
NIK ROZLEEN FAEZIN BINTI NIK MAHMOOD(16070182)
FATIN SYAHIRAH BINTI MOHD SETH(16070146)
6 August 2018 (MONDAY)
1.0QUESTION NO. 1
AmGeneral Insurance Berhad (AmG) is founded on a combined business of two former entities, AmG Insurance Berhad and Kurnia Insurans Berhad (KIMB) with the acquisition of KIMB by AmBank Group and Insurance Australia Group International Pty Ltd (IAG) in September 2012. With our strengthened market position, AmGeneral stands as a pillar of the industry, representing stability and strength with exceptional product offering, distribution and customer service.
As one of Malaysia’s largest motor and leading general insurance company in the market, AmGeneral has underwritten RM1.5 Billion Gross Written Premium for Financial Year 2017/2018 under its two well-known, trusted brands AmAssurance and Kurnia Insurans which are the face of the company to its agents, brokers, customers and the general public.
Together, AmAssurance and Kurnia insure one in every six cars in Malaysia and is ranked Top 2 in Motor with a market share of 15%. For overall general insurance, AmGeneral Insurance is Top 5 in overall market share as of 1st half of 2018. With over 4 million customers, the Company generates business from a comprehensive range of general insurance solutions distributed through a network of 33 AmAssurance and Kurnia branches, servicing 7,000 agents and dealers, as well as through AmBank’s branches nationwide.
1.2VISSION AND MISSION STATEMENT
The AmGeneral Insurance Berhad vision is preferred diversified and internationally connected financial solutions. The AmGeneral Insurance Berhad mission is connecting, growing and outperforming that accentuates their commitment in connecting with customers, people as well as stakeholders and continuous initiatives in growing to further cement their position in the industry as they aspire to exceed expectations by consistently outperforming.
The AmGeneral Insurance Berhad objective to their achievement is to be the most trusted insurer in Malaysia.
1.4TYPE OF AMGENERAL INSURANCE PRODUCTS
AmGeneral Insurance Berhad provides motor and general insurance products and services in Malaysia. The company offers motor accidents insurance, fire insurance, personal accident insurance, house-owner and householders insurance, private motor insurance, and household guard policies. It also offers medical insurance and business insurance in the areas of commercial and industry, engineering, construction, marine, liability, employee benefits, general, and packaged products. The company offers its products through a network of branches, agents, and dealers, as well as online. AmGeneral Insurance Berhad was formerly known as AmG Insurance Berhad and changed its name to AmGeneral Insurance Berhad in March 2013. The company was incorporated in 2008 and is based in Petaling Jaya, Malaysia with branches in Malaysia. AmGeneral Insurance Berhad operates as a subsidiary of AMMB Holdings Berhad.
1.5THE INTERRELATIONSHIP AND INTERDEPENDENCY OF INSURANCE PRODUCTS IN CONTEXT OF EXPANDING ASEAN MARKET
AmGeneral Insurance Berhad wanted to expand their business and have interrelationship and interdependence with Thailand. AmGeneral Insurance Berhad offers motor accidents insurance, personal accident insurance and private motor insurance in Thailand. This is due Thailand ranked Top 2 in Asian country in recording statistics on road crash rates in the world. Moreover, Thailand’s total population of 68.86 million in 2015 has recorded about 80 deaths per day. AmGeneral Insurance Berhad wanted to offers the medical insurance and business insurance in the areas of commercial and industry. We also planned to serve our client even they are outside of their home country, therefore, our client will be able to get their claim in depending on the insurance products that client purchases.
1.6THE ROLE OF AGENTS IN DISTRIBUTION OF INSURANCE SERVICES IN GLOBAL BUSINESS
An agent is a person who represents an insurance firm and sells insurance policies on company’s behalf. A captive agent can sell only the insurance policies of many different companies and attempts to find the best policy for the insurance buyer. The agent generally receives a commission for the service. The agent attempts to extract the maximum value for the insurance company in all dealings. Insurance agent a person or firm which acts as an intermediary in bringing together clients seeking insurance cover and insurance companies offering suitable policies.
In some cases the agent may simply introduce the two parties to each other and receive a commission from the insurance company or the agent may be employed by a particular insurance company to sell insurance policies on company’s behalf, partly on salary and partly on commission. Insurance agents are usually interdependent intermediaries who are able to negotiate with a number of insurance companies on behalf of clients on order to secure for them the most advantageous cover and terms, as well as handling claims and offering general insurances advice.
To be well-known company in insurance industries manager have to bear taking a risk. The overall attractiveness of a country as a potential market or investment site for an international business depends on balancing the benefits, cost, and risks associated with doing business in that country. Others thing being equal, the benefit-cost-risk trade-off is likely to be most favorable in politically stable developed and developing nations that have free market systems and no dramatic upsurge in either inflation rates or private sector debt.
1.7INTERNATIONAL BUSINESS STRATEGIES
AmGeneral Insurance Berhad offers insurance that have additional value on its contract. For example, others insurance offers protection or compensation in their home country, but AmGeneral Insurance offers life insurance outside of their client home country. Therefore, in any situation happen for examples, our client accidently injured, AmGeneral Insurance will cover and clients can claim compensation even though the client outside of their home country. AmGeneral Insurance also offers a combo insurance which means if our client purchases insurance for two persons, AmGeneral Insurance will give one free insurance contract to another person in their family. Our free means they didn’t have to pay in advance. AmGeneral will pay for them for 4 month.
Therefore, to make more people purchase or subscribe AmGeneral Insurance, the agents will have to promote and sell the insurance products and services to its potential client. Agents will let the people aware and know about the benefits of owning insurance. In other words, our clients will know that this insurance is useful for their future. Moreover, marketing strategies needs to be drawn and re-drawn from time to time, keeping in the mind the customer preferences. Agents must always update with current surrounding. For example, people nowadays concern about their health therefore, they will buy insurance to protect their life and property.
Agent is an intermediary person between insurance’s company and customer is to sell the product or service. Agent will promote insurance to the customer until it sold. By providing the added value and assurance to the customers, it will encourage them to purchase AmGeneral Insurnace both national and international. If every person has insurance, it will guarantee their health, lives and their asset in future.
2.0QUESTION NO. 2
International trade can be defined as the exchange of goods and services between one countries to another countries. It can give the world economy increase, such as in prices, supply and demand that is affected by global events. This topic was discuss in a few theory that can be divided into two sub group which are classical country based trade theory and modern firm based trade theory.
Classical country based trade theory have discuss into four other theory from different masterpiece which are mercantilism, absolute advantage, comparative advantage, relative factor endowment (factor proportion).
Adam Smith, the ‘Father of Economics’ had first used the word ‘Mercantilism’ in his famous book ‘Wealth of Nations’. Mercantilism means is “Governmental regulation of economic affairs, especially, trade and industry”. The exponents of Mercantilism opined that Commerce is the key to progress of every country and it can be achieved at the cost of the interest of other country but never wanted the intervention in politics.
Mercantilism theory stated that a country’s wealth was determined by the amount of its gold and silver holdings. Mercantilists believed that a country should increase its holdings of gold and silver by promoting exports and discouraging imports. In other words, if people in other countries buy more which an export than sell which are imports, then have to pay the difference in gold and silver. The objective of each country was to have the value of exports are greater than the value of imports, and to avoid a trade deficit, or a situation where the value of imports is greater than the value of exports.
For example, under the British Empire, India was restricted in buying from domestic industries and was forced to import salt from the UK. Protests against this salt tax led to the ‘Salt tax revolt’ lead by Gandhi because of that, the state promoted a controlled economy with strict regulations about the economy and labor markets in seventeenth-century France. Countries sought to reduce imports and also reduce the value of the currency by leaving the gold standard. Some have accused China of mercantilism due to industrial policies which have led to an oversupply of industrial production.
Second theory is absolute advantage is focused on the ability of a country to produce a good more efficiently than another nation. Smith reasoned that trade between countries shouldn’t be regulated or restricted by government policy or intervention. By specialization, countries would generate efficiencies, because labor force would become more skilled by doing the same tasks. Production would also become more efficient, because there would be an incentive to create faster and better production methods to increase the specialization.
For example, Absolute advantage refers to the ability of a nation to produce a product or service more cheaply than another nation which is in the result of inputs, such as natural resources, or because of the cost or productivity levels of labor. Absolute advantage may also arise from the level of available capital, such as factories or infrastructure. For reality situation, India has an absolute advantage in operating call centers compared to the Philippines because of its low cost of labor and abundant labor force.
David Ricardo in 1817 is developing comparative advantage theory. Ricardo suggests that countries should specialize in the production of those good they produce most effectively and buy good that they produce less effectively from other countries, or at the same time buying good from other countries that they could produce more effectively at home. The difference between these two theories is subtle. Comparative advantage focuses on the relative productivity differences, whereas absolute advantage looks at the absolute productivity.
For example, Ghana is more efficient in producing cocoa as compared to South Korea or comparatively more efficient at producing cocoa than it is at producing rice. If both countries engaging in trade, they can increase their combined production of rice and cocoa, those benefiting consumers in both countries as they can consume more of both country.
Ohlin’s theory begins where the Ricardian theory of international trade ends. The Ricardian theory states that the basis of international trade is the comparative costs difference. But he did not explain how after all this comparative costs difference arises. Ohlin’s theory explains the real cause of this difference. Ohlin did not invalidate the classical theory but accepted the comparative advantage as the cause of international trade and then tried to examine and analyze it further in a moral and logical manner. Thus, Ohlin’s theory supplements but does not supplant the Ricardian theory.
Ohlin states that trade results on account of the different relative price of different goods in different countries. The relative price commodity difference is the result of relative costs and factor price differences in different countries. The differences in factor prices are due to differences in factor endowments in different countries. It thus, boils down to the fact that trade occurs because different countries have different factor endowments. Ohlin’s theory is, therefore, also described as the factor endowment theory or the factor proportions analysis.
Ohlin’s theory is usually expounded in terms of a two-factor model with labor and capital as the two factors of endowments. The gist of the theory is: what determine trade are differences in factor endowments. Some countries have plenty of capital others have an abundance of labor. The Heckscher-Ohlin theorem is countries which are rich in labor will export labor intensive goods and countries which have plenty of capital will export capital-intensive products.
OLI stands for Ownership, Location, and Internalization which are three sources of advantage that may underlie a firm’s decision to become a multinational. The OLI approach to the study of foreign direct investment (FDI) was developed by John Dunning. It has proved an alternative way of thinking about enterprise (MNEs) and has inspired a great deal of applied work in economics and international business.
Ownership advantage is about why some firms but not others go abroad and suggest a successful of MNE that has some firm-specific advantage allow to overcome the costs of operating in a foreign country. Location advantages focus on location of MNE that can be chosen. Internalization advantage affect the firm to choose to operate in foreign country such as trading off the savings in transaction, hold up and monitoring costs of a wholly-owned subsidiary against the advantages of other entry modes which are exports, licensing, and joint venture.
The ownership is that the firm must own some asset that generates value to make it worth the extra costs of multinational production. This asset might be a blueprint, a patent and copyright. Other assets include are managerial talent, a brand’s reputation or some other intangible capital owned by the firm.
For example, China expands their smartphone in Malaysia’s market. China do enter their Huawei and others smartphone in Malaysia market. The host country is Malaysia which the demand of the smartphone is in highest level. Smartphone shipments still recorded activity as it was driven by consumers’ need to upgrade their phones to better ones that come with higher specifications such as larger memory size, battery capacity, camera quality, etc.
Meanwhile, vendors and resellers experienced minor setbacks as their profits were squeezed, mainly due to the weakening Malaysian Ringgit (MYR) against the greenback combined with other rising costs. According to Jensen Ooi, Market Analyst, Client Devices, IDC Asia/Pacific says that the market situation led local resellers to option to upsell brands that not only have better margins, but have become popular with consumers, mainly Samsung and China brands such as Huawei, OPPO, and vivo. Budget and brand conscious consumers are increasingly opting for brands that have become globally renowned via aggressive marketing initiatives and well-built devices.
A multinational firm means that the firms operates in more than one country that there must be some advantage from operating in the location. One type of location advantage is a saving in transportation and tariff costs. This kind of advantage is important for goods that are expensive to ship abroad which is export. Another location advantage might arise from differences in production costs across countries.
For example is America open their market in Malaysia such as KFC or Kentucky Fried Chicken as the best location to make the business. The main reason for this is to lower the cost and increase revenues. Another reason is about resources. The KFC know that they can get the resources at their target market. The chicken can be supply in Malaysia through Ayamas. Ayamas is the integrated poultry operators nationwide, specializing in the processing and retailing of chicken for local and export markets. This show that KFC from home country can easily get their resources from host country which is Malaysia.
The internalization advantages are gain from keeping the international expansion within the firm. Producing within the firm, rather than licensing to an outside firm, may make it easier for a firm to protect its assets. Another internalization advantage arise when it difficult to write a contract between two firms for a good or service to be produced. It is easier to produce within the firm and retain complete control over the process. .
For example, Mcdonald has opened branches nationwide for the purpose of expanding their market. In Malaysia, McDonald has introduced nasi lemak burger and nasi McD to customize and adjust the menu with culture in malaysia. It is just like in other countries, mcdonald will provide a menu that relates to the culture of the country so customers can buy and enjoy the menu that is familiar with their culture. As for malay is the majority of population in malaysia. The Mcdonald come out with the idea of Nasi Lemak Burger and other menu that suitable with the taste buds of Malaysian people. Below is some menu from McDonalds in Malaysia that might not in the menu of others countries.
2.4RESOURCE BASED VIEW (RBV)
RBV can be defined as a management device used to assess the available amount of a business’ strategic assets. In essence, the resource-based view is based on the idea that the effective and efficient application of all useful resources that the company can muster helps determines its competitive advantage.
Resource-based view theory has been discussed in strategic management and Information Systems. It identified the other organization issues such as corporate environmental performance, profitability, and strategic alliance. However, there still remains the issue of resource relations in an organization, the internal interaction of resources, especially IT resources with non-IT resources.
In Resource Based View theory, the resources possessed by a firm are the primary determinants of its performance. The resources may remain latent until the firm deploy its capabilities, with these may contribute to a sustainable competitive advantage. Resources based view in human resource management aims in providing justification for attaching importance to especially talent management and in enhancing the value of the Human Resource contribution in achieving competitive advantage by strategically fitting and bundling as HR best practices. Outsourcing is built from an organization that lacks valuable, rare, inimitable, organized resources and capabilities thus seeks for an external provider in order to overcome that weakness. In outsourcing, firm’s performance in the marketplace depends on the different characteristics of the industry in which it compete and through innovation, persistent improvement and management of relationship with external entities may lead to sustain competitive advantage and be above average performance.
For example, according to SHS Web of Conferences, China import coal from Indonesia because Indonesia’s coal resources are very rich, so it become China’s supplier of materials, such as coal,nickel ore, bauxite, and iron ore. Indonesia is more competitive advantage. According to Energy statistics in SHS Web Conferences show that Indonesia has proven coal reserves of 5.529 billion tons, accounting for 0.6 % of the world total, ranking 13th in the world, compared to 2010 to enhance the two. The coal resources and more storage were in Sumatra and Kalimantan.
Refers to the OLI Theory, Ownership and Location has been explained above. OLMA provides a complete set of concepts needed to study modern multinational firms. OLMA is stand for Ownership, Location, Mode of entry and Adjustment.
2.5.1Mode of Entry
Modes of entry in terms of international market is the channels that the organization can entry to a new international market. All organizations will have different reasons for going global market, which is they will choose entry mode for best solution. An organization will need to determine their desired level of commitment, flexibility, control, presence and risk when going global, in order to choose the entry mode and which best suits their situation. The factor that consider modes of entry into international markets such as the internet, exporting, licensing, international agents, international distributors, strategic alliances, joint ventures, overseas manufacture and international sales subsidiaries.
For example, according to University of Applied Sciences Essen research about evaluation of joint venture state about joint venture between Volkswagen and SAIC Motors. Shanghai Automotive Industrial Company (SAIC) entered into a joint venture with Volkswagen in 1984 to form Shanghai Volkswagen. SAIC is a state-owned Chinese automotive manufacturing company while Volkswagen group is a German automotive car manufacturer.
According to Holweg & Oliver (2009), Volkswagen was drawn into the Chinese market because of the opportunities it saw of growing its business while reducing its production costs significantly. For Volkswagen, setting shop in China would mean increasing access to the raw materials involved in cars production and cut down on production costs. China also has cheap labor due to affordable energy costs that are instituted and regulated by the Chinese government. China has huge power projects ranging from hydroelectric to solar power that it uses to encourage investments and spur economic growth. The Chinese government is responsible for setting power tariffs that are usually low to encourage investments. Low energy costs and a huge population that guaranteed affordable labor seemed very attractive to Volkswagen.
In terms of the market, Volkswagen saw a ready and growing market in the Chinese middle-class. Volkswagen was specializing in luxury limousines and family vehicles that are a common buy for the middle-class population. SAIC had succeeded in offering such vehicles to the population, but Volkswagen believed it had something unique to offer. The joint venture enabled SAIC to gain from Volkswagen’s expertise which is improved its brand power and consumer satisfaction in the market. Volkswagen also gained from the increased market presence that increased its revenues. It also benefited from low cost of production in its foreign market.
Adjustment must be the first to be considered before entering the market. The home country will be explore and understand the culture, religions, economic development, property rights, corruption, and politic of host country.
For example, Korean company of KIA which is car company need to understand the culture, property rights and corruption related in the host country before they enter the foreign market. If the KIA motors company wanted to do the business with Malaysia, they will change the position of driver. In Malaysia, the driver position will be on the right side meanwhile the home country the driver position is on left side..2.6THE PRODUCT LIFE CYCLE THEORY
Product life cycle theory by Raymond Vernon explain the manufacturing success in America. There are three stages of product life cycle which are new product, maturing product and standardized product. Product progresses are following according to this stage. According to Jeff Dunn, in Business Insider US stated that Apple currently has close to 500 stores and spread across 19 countries, covering most of the major global markets. According to Deloitte’s latest “Global Powers of Retailing” firm, that’s enough to make Apple a top-40 retailer in the world, and one of the 15 fastest-growing retailers beyond that.
Iphone has a strong rival like Samsung in the market. To stabilize the competition iphone started to launch the product worldwide. The business also use newer and update version of their product design. What makes Apple sell the most is the design of their products and the name that the business has made them internationally. This will make the Apple easy to get revenues from foreign country that has their branches even the iphone itself from the home country does not get best sell. Apple always incorporate with latest technology in providing new designs. The revenue from host country is 70% compared to the home country that only received 30%.
2.7NEW TRADE THEORY
New trade theory (NTT) suggests that a critical factor in determining international patterns of trade are the very substantial economies of scale and network affects that can occur in key industries. These economies of scale and network effects can be so significant that they outweigh the more traditional theory of comparative advantage. In some industries, two countries may have no discernible differences in opportunity cost at a particular point in time. But, if one country specializes in a particular industry then it may gain economies of scale and other network benefits from its specialization.
Another element of new trade theory is that firms who have the advantage of being an early entrant can become a dominant firm in the market. This is because the first firms gain substantial economies of scale meaning that new firms can’t compete against the incumbent firms. This means that in these global industries with very large economies of scale, there is likely to be limited competition, with the market dominated by early firms who entered, leading to a form of monopolistic competition.
For example, globalization has led to increased variety for consumers. The proliferation of brand clothing labels. Firms competing in the model of monopolistic competition and heavy branding. Neither UK or Italy has a particular comparative advantage in producing clothes, but consumers are attracted to brand image of Italian and British fashion labels.
In conclusion, each theory can be used in the business processes. Each theory can help and guide the entrepreneur to run their organization meanwhile they can produce profitability, enhance good services and also products in the international level of world with. Therefore, most of the theory must be implementing in an organization.
3.0 QUESTION 3
3.1INTRODUCTION ON ONE BELT ONE ROAD (OBOR)
One belt one road (OBOR), also known as the Belt and Road Initiative (BRI) is a project initiated by the Chinese President Xi Jin Ping. It was announced in the year 2013 with an objective to rejuvenate the ancient trade routes connecting Asia to Europe known as the Silk Road or the Silk Route. OBOR is an ambitious project and it encompasses almost 65 countries. China has planned around $1 trillion of investment in various infrastructure projects by providing loans to the countries involved at a low cost.
Its objective is to build trade routes between China and the countries in Central Asia, Europe and Indo-Pacific littoral countries. OBOR/ BRI is a network of roads, railways, oil pipelines, power grids, ports and other infrastructural projects meant to connect China to the world. Xi pledged at least $113 billion in extra funding for the initiative, and urged countries across the globe to join hands with him in pursuit of globalization. It’s all about building massive stuff, mostly around transport and energy: roads, bridges, gas pipelines, ports, railways, and power plants.
The Belt and Road Initiative aims to connect Asia, Europe and Africa along five routes. The Silk Road Economic Belt focusses on linking China to Europe through Central Asia and Russia and connecting China with the Middle East through Central Asia and bringing together China and Southeast Asia, South Asia and the Indian Ocean. The 21st Century Maritime Silk Road, meanwhile, focusses on using Chinese coastal ports to link China with Europe through the South China Sea and Indian Ocean and connect China with the South Pacific Ocean through the South China Sea.
Investment for the OBOR is tremendously huge for supporting all those infrastructures and sustaining development. China’s state-owned enterprises and largest financial institutions lead the charges of the OBOR development. All provinces in China have indicated their participation in the implementation of the OBOR with a wide range of specific projects. Sichuan province encourages its industrial enterprises to shift surplus production capacity abroad and facilitates the export of equipment, raw material and products from Sichuan.
The provincial government has committed to raising the “supporting level of credit” to help participating enterprises, including the offer to train local enterprises to apply for national funds. The OBOR holds rich promise for Chinese companies looking to expand overseas, but risks of continuing financial support funds and long term return of the infrastructure investment should be accessed more carefully.
China Smart Creation (CSC) Smart Eco-Valley in Bentong, Pahang, benefiting from the “One Belt, One Road” (OBOR) initiative, will be Malaysia’s first smart city. This was in line with the aspiration to turn the town into a smart eco-friendly city, in addition to its status as a satellite city. This will be the first 100% smart city in Malaysia that uses China’s latest smart technology. The project, which is expected to commence at the end of this year, will take 18 to 24 months to complete.
The project, with a gross development value of RM3.5 billion, will comprise a smart city township that includes homes, hotels, universities, and a wellness centre, which encompasses the smart industry, smart living and smart management, using the latest technology from China. Second, industry analysts are also anticipating the property sector to benefit from the BRI projects due to increasing housing demand as more jobs are created from the economic spur in the areas along the ECRL.
Kuantan in particular is expected to see a housing boom as the city is set to position itself as maritime hub in the east coast of Peninsular Malaysia as the ECRL is actually part of its maritime route that stretches from the Port of Gwadar, Pakistan to supply liquefied natural gas (LNG) to China’s cities in Pearl River Delta, Yellow River Delta and Baohao Rim. And in order to meet the housing demands, the research arm of Midf Amanah Investment Bank Bhd (Midf Research) is speculating that the Kuantan Township Kota SAS of which Gabungan AQRS Bhd (Gabungan AQRS) is a established developer of is expected to be one of the major recipient of increasing housing demand.
China’s ‘One Belt One Road’ initiative will impact industries, businessmen, farmers and even students in Malaysia especially when China has committed to step up investments for infrastructure projects and import more fresh pineapples and palm oil. ‘One Belt One Road Initiative’ would derive massive benefits to Malaysia in terms of excellent infrastructure, connectivity, social facilities, better living standards and abundant business opportunities.
Meanwhile, President Xi described bilateral trade between Malaysia-China “as being at its best” and praised the Malaysian government for its support and commitment towards the ‘One Belt One Road’ initiative.
China seeks to take the interests of all parties into account so as to generate mutual benefits, including environmental management and closer cultural exchanges. We wish to give full play to the comparative advantages of each country and promote all-around practical cooperation.
Firstly, geopolitical dimension of OBOR, which places China in the economic-political orbit of many Asian and European powers, has provided China with a political hold over land and possibly the maritime routes.
Secondly, OBOR acts as a link between economic and political partnerships in the region. Historically, nations tended to align themselves strategically towards their economic partners. However, in recent times, China has overtaken the United States to become the No.1 trading partner in the region. With this development, trading partners of China have to be more sensitive towards its political interests.
Thirdly, China’s soft power might lie in establishing OBOR through building infrastructure and harnessing connections in untapped markets in the partnering countries. OBOR is also based on China’s historical narrative of the golden age, which consisted of the ancient Silk Road and maritime routes.
Fourthly, with the OBOR intervention by the China into another country, they will create a job opportunities to the home and host country, therefore, their standard of living will be changed for the better and their infrastructure will be upgrading. Lastly, with better infrastructure and greater global connectivity, OBOR will make a boost in demand for tourism-related services in industries such as food and beverage, hospitality, leisure and entertainment, shopping, education and healthcare, therefore, the connectivity and cooperation with other nations expected will make a further grow.
A new “border belt road”, linking Cambodia and Vietnam that is now under construction will cut directly through Virachey National Park – a vast swathe of mountainous jungle, upland savannahs and deep river gorges, spanning 3,325 square kilometres. Many say a road through such an area would be extremely detrimental to the wildlife and the forest. Farms, poachers, loggers and industrial-scale plantations are sure to follow the construction of such a road, further contributing to the environmental impact.
More dams planned for construction on important tributaries feeding into the Mekong may cause more flooding, resulting in the destruction of great tracts of forest and will require the relocation of communities who depend on the rivers.
These dams will also impact the habitat of a variety of species in the rivers, such as the famous Irrawaddy dolphins, which used to be able to swim freely up and down the Mekong. Other wildlife at risk by the construction of dams include river otters, freshwater stingrays, Siamese crocodiles and the Mekong catfish, the largest species of catfish in the world which is now endangered.
AllBright Law Offices, believes that there are three ways that companies can set up a lawyer team: directly engage an international law firm; directly retain lawyers from the target country, use a combination of Chinese law firms plus lawyers from investment destinations. Each of these three options has its own pros and cons. For example, international UK and U.S. firms have relatively wide coverage with offices in Beijing, Shanghai as well as the destination countries. But he also stressed that since the OBOR initiative covers a vast land area that includes more than 60 countries and regions, it is impossible for international law firms to cover all of them.
In conclusion, China seeks to take the interests of all parties into account so as to generate mutual benefits, including environmental management and closer cultural exchanges. OBOR acts as a link between economic and political partnerships in the region and China’s soft power might lie in establishing OBOR through building infrastructure and harnessing connections in untapped markets in the partnering countries. .
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