Transcript Global Dynamics of a Rising China Andrew Leung International Consultants Limited

Global Dynamics
of a Rising China
Andrew Leung International Consultants Limited
‘The World is Flat’ Thomas Friedman
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Walmart Symphony
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UPS synchronisation
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105m registered users,
190 countries
Turnover US35 b
Rolls Royce
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2% of world GDP
240 aircraft, 11th largest fleet
In-sourcing – 3rd party logistics e.g. internet retail + repair + delivery
DIAD (Driver Delivery and Acquisition Device)
E-Bay – ‘International community’
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EDLP (‘China Price’)= global supply chain super efficiency
$260 b, 108 hubs, > 3,000 stores, Swiss GDP from China p.a.
RFID
Just In Time manufacture and delivery (e.g. hurricane signals)
Without Intermission or Finale
Competency from cars (licensed to BMW) to gas turbines
75% components and > 60% R&D outsourced
‘A German company? A Singapore company?’
Boeing - outsourcing includes Russian MIG engineers
HP – 142,000 employees in 178 countries
Lenovo – Chairman/CEO/COO/CFO
- My consultancy input
Rising Elephant Ashutosh Sheshabalaya
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The World’s Back-Office v The World’s Factory
60% of offshore white-collar jobs
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3.3 million US jobs outsourced by 2015; I/T component 23% by 2007; to surpass US in software and tech-service jobs by 2010
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HSBC, Lloyds TSB, British Rail, Aviva (UK’s largest home & car insurer); BT; legal documentation, British Trade Union:
‘Only up to 5% service jobs are geography-tied’
Helps to reduce the West’s pension burden?
Bangalore > Silicon Valley in high-tech employment
85% of India covered by broadband
Intel/Cisco/IBM/TI R&D centres >1,000 patents
CMM Level 5 certification > US
Indian computing companies training > 20,000 students in China
Vinod Dham, ‘Father of Pentium’, Vinod Khosla co-founding first CEO Sun Microsystems;Amar Bose, founding CEO of Bose Group;
Indian engineers 20% US Microsoft & 25% Ciso staff
IIT rivals Harvard/Princeton/ MIT; > 800,000 I/T professionals; 2 million university graduates p.a.; 54% population under 25 (555m)
250,000 ‘accent-neutralised’ call centre staff e.g. AOL
400,000 US tax returns
Remote PA/EA
BPO (e.g. GE’s US 35 b global invoices)
Wireless, end-to-end business solutions, composite materials, MRI scans, genetic engineering, econometric modelling, book
publishing, Wall Street research, computer-aided designs for cars, aircraft, IC, supercomputers, fast-breeder nuclear reactors, state-ofthe art remote-sensing satellites, fifth-generation combat jets and stealth warships etc
Top medical care at low cost :heart surgery @US$8,000 inc airfare and a month’s hospitalisation (Blue Cross/Bleu Shield/BUPA ?)
Bioinformatics (image analysis; data mining; workflow) e.g. GSK + Ranbaxy (early clinical trials)
National Telemedicine Network accessible by 600,000 villages
World champions:
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Mittal, world’s single largest steel group
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Tata (developing people’s car @US2,200)
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Largest exporter of generic drugs (60 FDA certified manufacturers
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NIIT expanding IT training in China to 500 centres by 2007
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Newgen sells more advanced colour-compression technology to Canon
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Nokia mobile brain-chips
But High-Tech sector + Manufacturing = 2% of employment
New business paradigms
• Individuals empowered
• Value Migration
• New value creation
• Originality & creativity
• Ideas & Insight
• Cutting-edge knowledge
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Competing with the World
Race to the Top
No job is indispensable/immutable
Attitude, Aspiration, Ambition + Hard work
Energy
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US consumes 25% v China 8% of World’s oil
China accounts for 1/3 of World demand growth but consumes @ 1/25 of US
Both sit on < 3% of world’s oil reserve
World proved oil reserve largely in Middle East: Saudi Arabia (22.1%), Iran
(11.1%); Iraq (9.7%); Kuwait (8.3%); UAE (8.2%); Venezuela (6.5%); Russia
(6.1%); Others (28%)
China imports 40% of its oil but relies on highly polluting domestic coal for
77% of its power
Vehicles consume 1/3 of China’s oil, rising to 65% by 2015
China’s uses 4.3 x US and 11.5 x Japan per unit GDP
China to up nuclear power dependence from 2.3% to 4% by 2020 (30 x plants)
China is World’s 3rd largest bio-fuel producer:
• Heilongjiang, Jilin, Liaoning, Anhui, & Henan produce 1 b g ethanol p.a.
• Mandatory use of mixed fuel in some farming provinces
But renewables (inc hydro, wind, solar, biomass, subterranean, ocean etc)
account for only 3% power consumption
China’s external oil acquisitions causing increasing tensions with competitors
especially US (over ‘rogue’ countries) and Japan (East China Sea)
China, US, EU, Canada, Japan, and Russia on ITER (International
Thermonuclear Energy Reactor) project on hydrogen fusion
Shanghai to build World’s first eco-city in Dongtan in 2010.
Development Imbalances
• Within China :
• 2005 NPC: Rural v Urban; Human v Environmental; Economic v Social; National v
Local; Inward v Outward Investment
• Coastal v Inland
• Export v Consumption
• Rich v Poor
• Growth v People
• In the World :
• Western consumption v Eastern saving
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Globalisation v jobs
Tradition (Entrenched culture) v Modernity
Interdependence v Conflict (China/US; China/Japan; Mainland China/Taiwan)
Oil power v Geopolitical stability
Nationalism v International harmony
Growth v Environment
Energy v Sustainability
Fundamentalism v Tolerance
Cultural Diversity v Alienation
Prosperity v Poverty (1990- 2015: Asia -500M, Africa + 120M)
11th Five-year Plan 2006 -2010
• Coordinated Balanced Development
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GDP to grow at 7.5% p.a.
Population to stabilize at 1.36b
Urban social security insurance to reach 223m people
Rural medical care coverage to reach 80%
• Resource efficient and environment-friendly society
• Energy consumption per GDP unit to decrease by 20%
• Water consumption per GDP unit to decrease by 30%
• Main pollutant discharges to reduce by 10%
• New Socialist Countryside
• Productivity; Well-being; Civilised culture; Cleanliness; Democratic Governance
• Arable land to be maintained at 120m hectares
• Forest coverage to reach 20%
• Restructuring Growth – Service sector including consumption
• Building a Nation of Innovation – R & D expenditure to reach 2% GDP
• Scientific Development; Productivity/Efficiency > Scale; Sustainability;
Harmony; People and Civil Society
• Deepening Market Economy Reform and Opening-up
China’s paths in the 21st Century
• Technology & Trade
• Harmony between growth v environment; people in society; between
countries; modernisation v heritage
• Democracy with Chinese characteristics
• National Branding
• Rule of Law; Transparency; Accountability; Civil Society
• History & Confucianism
• International Partnership:
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USA & EU
Japan, Russia & India
Asia : ASEAN plus, Asian Currency, Asian Community
Less Developed Countries especially Middle East, Near East, Latin America &
Africa
• ‘Responsible stake-holder’ in global affairs:
• Global Security
• Climate Change (e.g. Alternative Energy, ITER)
• Poverty Relief
Thank you
www.andrewleunginternationalconsultants.com