AbstractUsing an institutional matrix, this article explains how different factors in each country interact with each other and how these factors constitute the business system in China and in Japan. In addition, this article also compares the differences and similarities of business systems in China and Japan. Business System In order to understand the business system, we must first look at the most important element, people. After recognizing the pattern of individual activity, we can apply this pattern in a broader sense and understand the system as a whole. The Japanese tend to be more collectivist than the Chinese. Historically, Japan and China have governed according to the idea of ​​Confucianism, which emphasizes the importance of conformism and collectivism. The Japanese inherited collectivism while the Chinese adopted conformism. The idea of ​​collectivism was taught during education in Japan, although it has some benefits, this idea has caused Japanese people to lack critical and creative thinking. In addition, due to the high competitiveness of the global market, it is difficult to integrate good companies. To get hair in good companies, you have to get into a certain privileged university, and in return to get good universities, you have to get into a certain high school. This system has shaped the education system to be test-oriented, meaning that the score is the main concern of Japanese schools, parents, and students. This orientation therefore leads to a lack of questioning of routine (lack of creative and critical thinking). Unfortunately, we can also see the same pattern in the Chinese education system and global market. Chinese students also face severe competition as the education system becomes increasingly test-driven in China...... middle of paper ...... economic slowdown (Wartzman, 2009). These measures increase employee loyalty and also shape their identity. Japanese workers often present themselves as “business men.” Individualism dominates China and business exists solely for profit. People rarely identify themselves as a business person. In the minds of most Chinese people, family is the most important thing. Moreover, a long-term view dominates the Japanese business world, companies, banks and shareholders (mainly institutional shareholders like pension management programs) do not only look at current figures like cash flow. flow or profit, they tend to focus instead on the long-term returns of the business. Since major keiretsu are listed on stock exchanges, a system of cross-shareholdings is developed for the common good, one company holds the shares of another company for a long time and prevents hostile takeovers..