The different cultures in the Asian region have given rise to a complex, yet simple, financial structure of exchange economies. Unlike most exchanges in the western hemisphere, countries in this area of the world would often take into account some religious events which can impact the financial exchange. This is why on days leading to religious festivities like the Eid el Fitr, Obon and Good Friday, Asian exchanges would be very busy with some companies taking a plunge while others rise in stock prices. Despite this, the fundamentals of its financial structures remain the same and in synch with the rest of the world.

The Finance Policy In Most Asian Countries

Most of the finance policies in countries within the Asian region are centered on agriculture. Different Asian governments and businesses alike recognized the necessity to provide backing to small, yet high-yield farms so as to maximize the combined farm output. The economic managers in the region see this method as better than maximizing the returns on money invested through big corporate farms. Part of these countries’ finance policies also identified the need in the industrial sector to delay profits until such time that a satisfactory industrial learning process has happened. In short, financial policy usually accept small near-term returns on investments in the industrial sector so as to build industries that can produce in the future a much higher return.

Alternative Finance Policy

One of the things that economic managers in the western hemisphere would like to see happening in Asia is an increase in consumer lending. It is after all the focus of various financial systems in advanced economies like the United States and Britain. If consumer lending is encouraged in poorer and developing countries in the Asian region, it can lead to industries and other businesses experiencing higher profits. The problem with this, however, is that there are certain sectors in Asia’s financial communities that would rather maintain the status quo. This is because while the technology in industries located in many Asian countries lag behind its neighbors, its banks continue to be very profitable. In fact, the most profitable banks in Asia are those in the most backward countries in the region such as Indonesia, Thailand and the Philippines.

Advanced Economies In Asia

Not all countries in the Asian region follow principles like those being observed in Thailand, the Philippines and Indonesia. In countries like Korea, Taiwan and Japan, consumer lending is at its highest. Nevertheless, it was not always like that in these countries. Post-war Japan and Korea governments lost control over their respective financial systems and with dire consequences too. Japanese economy during that time was controlled by zaibatsu business groups who own and also manipulate many banks towards profitable, albeit, selfish ends. In Korea, the government decided to privatize banks in a manner that nearly all manufacturing development were hindered. In the end, however, these advanced economies managed to pull through the chaos and emerged as one of the leaders, not only in the region but also in the world.

The Finance Policy Of Advanced Economies In Asia

After emerging from the chaos caused by World War II, countries like Japan, Korea and Taiwan required that funds should be channeled to industrial projects that are viewed as less immediately profitable compared to consumer lending and manufacturing investments. Banks in these countries were closely watched and kept under tight control. Capital inflows and outflows from foreign investments were limited through government policy in such a way that domestic capital was controlled by the state. Interests that citizens earn on their bank deposits as well as their other passive investments were usually limited to a minimum, thus increasing the surplus cash which is at the disposal of the country’s financial system. While others may view the moves of these advanced economies back then, it worked well in their favor.

If you are an investor and you are looking at putting your money in various businesses in the Asian region, it would be most beneficial for you if you first study the various financial policies in the region. While the exchange market’s fundamental policies may be the same, you will find out that there are slight differences. It may be true that the differences are slight, but it may mean a lot for your investment.

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