Summary Using the institutional matrix, this paper explains how different factors in each country interact with each other and how those factors constitute the business system in China and Japan. Furthermore, this paper also compares the differences and similarities of business systems in China and Japan. Business System To understand the business system, we must first consider the most important component, the people. After recognizing the pattern of individual activity, we can apply it 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, while it has some advantages, this idea has made Japanese people lack critical and creative thinking. Furthermore, due to the high competitiveness in the lobar market, it is difficult to get into good companies. To get hair in good companies, you need to get into a certain favorite university, and in turn get good college manes, you need to get into a certain high school. This system has shaped the education system to be test-oriented, meaning that scoring is the primary concern for Japanese schools, parents, and students. This orientation then leads to a lack of challenge to routine (lack of creative and critical thinking). Unfortunately, we can also see the same pattern in China's education system and lobar market. Chinese students are also facing stiff competition, the education system in China is increasingly test-oriented… midway… economic recession (Wartzman, 2009). These measures increase employee loyalty and also form their identity, Japanese workers often call themselves “company men”. Individualism dominates in China and companies exist solely for profit. People rarely identify as business people. In the minds of most Chinese people, family is the most important thing. Furthermore, a long-term point of view dominates the Japanese business world, companies, banks and shareholders (mainly institutional shareholders such as pension management programs) do not only look at current figures such as cash flow or profit, they tend rather to focus on the company's long-term returns. Since the main keiretsu is listed on the stock exchange, a cross-shareholding system is developed for the common good, one company holds the shares of another company for a long time and prevents hostile takeovers..