Variety of capitalism in an institutional context of china

The market economies are dissected into a system based on the liberal market economy such as the United States of America, United Kingdom, Canada, New Zealand, and Australia. On the other hand, there is a system based on a coordinated market economy such as German, Japan, Austria and Sweden (Prevezer, 2017). The two systems represent a distinction which defines the efficiency and capacity of an organization to thrive in a specific economy due to some underlying characteristics of a given economic setup. Capitalism provides incentives for organizations to invest in research and development that improves the quality of output to yield extensive growth across several market segments. Capitalism breeds innovation due to the competitive pressure is introduces in lucrative business prospects thereby enhancing the quality of products and services.

Institutional evolution relies on the economic structure employed to foster better outputs such as define elaborate industrial relations, employment protection, mobility and quality of labour, and accessibility of funding for businesses. The funding should be analyzed as either from the issue of shares for public traded entities, sourcing from financial institutions and approaching equity markets. The growth of an economy depends on how countries put out a competent institutional framework which cultivates the existence of a positive relationship between firms and other stakeholders to attain their growth objectives collectively. The stability of the economy would be better achieved by employing measures that breathe life into the economic system by ensuring government action and other institutions is premised on the need to improve the trading environment.

A fair platform for organizations to compete based on ingenuity and innovation contributes immensely to attracting better outcomes for firms across different market segments. The two countries growth from 1980 to 2010 has a ten-fold difference despite having operated under a controlled economy by the state machinery. The capitalist institutional framework in China extensively focused on creating an environment that provides unlimited opportunities to State Corporations towards attaining growth. The coordinated market economy like the model applied by China operates under a system that fosters employment protection, controlled wage bargaining, lengthy job tenures and specialized training for providing employable skills to improve growth. The institutions in China are mostly either controlled by the state responsible for their financing and organizations have equally maintained a close relationship with state banks for funding (Prevezer, 2017).

Public listing of companies is not extensive in China as opposed to other countries since institutions rely on state funding and banks to raise capital for their development and expansion projects. Analysis of China Economic Framework China has shifted from a socialist economic system to a capitalist institutional framework recognizing the need to put in place market incentives and tools for progressive development. The global economy requires countries to grow their economy through market incentives informed by creating an enabling trade environment to attract investment around the world through foreign direct investment. Markets have conventionally required countries to apply tools such as putting in place institutions focussed on asserting the protection of private property rights and assurance of security from state expropriation of assets (Prevezer, 2017).

China has demonstrated disregard of the conventional market incentives and failed to recognize the need to put in place a mechanism for putting in place protection of property rights and enforcing of contracts. China’s legal regime does not represent a strong recognition of the rule of law together with an indication of policies that strictly advocate for separation of business and government like most western countries. The skilled human resource in several fields contributes significantly in advancing the capacity of organizations to improve their outputs quality at less cost due to the increased supply of labor in the market. Huawei Strategies and Policies Huawei delivered an incredible input to enhance the Chinese brand as a multinational aiming at delivery of quality output for the growing market of telecommunication and networking services.

The growth of the business largely depended on the availability of skilled labor and the determination to establish a Chinese multinational. China provided a broader market for the consumption of telecommunication and networking services thereby inspiring the commitment to take on the lucrative market and pride in serving China and the world by extension. The growth of the Huawei Technologies business was premised on the massive investment when it comes to research and development to use innovation as a tool to penetrate the market and gain consumer’s attention. Huawei technologies took an extra commitment to take care of the employee’s welfare and adopt the employment of better corporate management that fit the international standards reminiscent of global multinationals. The company has from time to time engage the services of consulting firms such as IBM which contributed to the re-engineering of their business processes and supply chain models.

Huawei Technologies growth was inspired by the strong and integrated Chinese network that created a large market for their services and products. The consumers provide a greater market niche for the organization especially the large corporations charged with the responsibility of responding to the telecommunication needs. The growth of Huawei Technologies is due to the understanding of market expectations hence formulating the business model for better outcomes. The Chinese government support did not just end through funding expansion strategies but continually put out policies that favored Huawei technologies growth objectives against external competitors (Naughton, and Tsai, 2015, 34). The government provided a mechanism that allowed Huawei to undertake strategic growth models outside the Chinese market by improving their competitiveness internationally. The Chinese government policy effectively protected Huawei’s business hence allowing it to rise despite the existing competition from international giants with massive assets and brand name such as Cisco.