INDIA And CHINA & The Rise Of Asian Economy.

The most common issue today discussed in the global MNC about the emerging markets, particularly in the Asian economy. The epée center of capitalism will come to Asia or in Euro Asia, loosing the prominence of U.S.

Twenty years down the line things in the economic frontiers will change dramatically.

Asian Advantage;
1. Huge Demography both in South Asia and China, and both are young demography.

2. Cheapest Manpower available in the world.

3. Manpower of all kinds, from low category to most efficient and most qualified manpower.

4. Adaptability to go global and global footprints of the Indian and the Chinese are present around the world, and they have been successful in all frontiers be it in business trade commerce to science and technology.

5. Low per capita consumption is one of the major factors to growth of the Asian countries particularly India and China.

6. One of the biggest markets still to be tapped, the global MNC will not find cake walk to enter these markets, they are challenged by local players and they pose tremendous threat to these MNC. All MNC bleed for several years in these markets and then reach break evens, but this is the future market, they can’t leave it too, it has be there in their new market expansion mode.

7. These countries had rich cultural civilization in the past, which according to some these are inherent strength if these country.

8. Both India and China missed the Industrial revolution in the nineteenth century, in one way that has been good for the world.
Major Problems.

9. In one conference some body told me if all Indians and Chinese starts consuming the energy like an average American two planets will be required, other wise the whole planet will melt down.

10. Both the countries are spending sizeable amount of their money in defense expenditure and have infrastructure problem , which is very much required to kick start a flying economy.

A very interesting figure I found out which I want to share with you all.

World’s Richest Government

Richest governments after 2008-2009 financial crisis:

1. Peoples Republic of China
National reserves: $2,454,300,000,000
2. Japan
National reserves: $1,019,000,000,000
3. Russia
National reserves: $458,020,000,000
4. Saudi Arabia
National reserves: $395,467,000,000
5. Taiwan
National reserves: $362,380,000,000
6. India
National reserves: $279,422,000,000
7. South Korea
National reserves: $274,220,000,000
8. Switzerland
National reserves: $262,000,000,000
9. Hong Kong, China
National reserves: $256,000,000,000

Out of the top nine countries only Swiss Government is not in Asia.
The rest are all in Asia.
Another very interesting fact "The USA" might have the biggest economy, but the American government is not at all rich; in fact, it can't even take out $150bn if asked to now without resorting to borrowing.

To date the US government has borrowed $14 trillion!!!!!.....

The UK, likewise, while the country/people are rich, the government isn't.
The UK government’s debt stands at $9 trillion now......

I was going through the IMD lectures and found interest lectures which I want to share with you regarding the forecasting an economy.

GLOBALIZATION 3.0,triggering effect for Change Management.

"The World is Flat" from Tom Friedman the NYTimes journalist
wrote after visiting B'lore in 2004,there has been a paradigm
shift in the attitudes all the firms and global corporates.

With price arbitrage in the global market place and
scouting for cheap labour both in manufacturing
and services, the trans national corporations
took dramatic and very smart management
decisions to to procure vendors both for production
and services, to remain competitive.

Identification of vendors, grooming vendors , keeping
in mind labour cost is known as OUT SOURCING.

Suddenly jobs flying out from Boston to B'lore to
make sure the U.S.MNC's remains financially fit ,
and can make the WALL Street happy.

Ruthless acquisition and mergers happens , many Asian
conglomerate buys EEU and American MNC at cheap price
Vi's a Vi's European and U.S MNC.

There was a mad rush for going Global, some firms
has been very successful, some failed miserably.



The Three Era Of Globalisation .

Business Futarist Peter Schwartz Says There Are Lot Of Other Major Econimic Problem Hidden Which Remains Unnoticed.

We’ve been so focused on the financial crisis that we’ve neglected
to pay attention to other issues, which, if left on the backburner,
could upset the status quo. That’s the view of futurist and business
strategist Peter Schwartz.

For one, Schwartz believes we could face “a high likelihood” of a
food price crisis “sometime in the next few years” – not because
he says, of a food shortage, but because of the nature of the
evolution of the commodity markets.
Courtsey : Insead Business School.
Yes today we find that the food product is going to the commodity
market and getting hedged.
In reply to this post I wrote a commnets which is as follows.

Excellent post, but it is going to be very unfortunate if you take
the food grains in the commodity market and speculate with it.

The poorest in the world are especially going to become poorer.

The basic need for food, shelter, clothing and primary healthcare
will be of the utmost need.

It is a global need; if these are not met, political and social unrest
will start and may lead to the unequal distribution of income and wealth.

We are already standing at the crossroads of capitalism. Just ten years
before, you were not sure what the future of India and China, Brazil,
Argentina would be.

But today, the emerging economies can't be ignored; CHINDIA will be
very important in the next 50 years. Latin America, Brazil and
Argentina cannot be ignored; they will be tomorrow’s market.

The EU role will change dramatically, the Anglo-American economic
supremacy will diminish.

Fossil fuels will be replaced by solar and wind power.

The Middle East problem will not be there anymore, waiting for a
multi polar world.

The rise of alternate fuel will diminish the power of the Arab world,
whereas the rise of Iran, Turkey and Indonesia will be noticed

Warm Regards,
Debashish Brahma.

Globality- Globalisation Can Really Benifit The World In the Long Run. We Are Really Staying In A Small World Where We Are All Shareing And Careing.

I was reading the the books of Prof Pankaj Ghemawat regarding
Globalization.

After the GATT was drafted and signed by all the countries in
the nineties ,many people felt very skeptical about the future
of their own countries in the future.

The agreement by Arthur Dunkell was a remarkable achievement in
the global economy.

Apparently it seemed the process economics of the world would benefit,
as it was said " The technologically forward countries will become rich
at the cost of the technologically backward countries" but in the long
run this idea is not true.

So called in nineties "Third World Countries" of the world has become the "Emerging Economies Of The World" the GDP growth rate are much
ahead of the developed countries of the world.

There were some very wrong ideas about these third world economies.

1.Low spending economies i,e poor consumption capacities.

2.Technologically backward heavily dependent
upon foreign technology, no capacity to develop own and
indigenous technology.


3.Academically weak and poor.


4.Don't have the power to innovate
new product or services of global standards.

But these economies are now plying a stupendous role in giving
boost to the global aggregate demand , one reason the high and
favorable demographic scenario.

If you consider"CHINDIA" China and India we have to watch it
very carefully.Identification of The BRIC economic block will
be a significant part of the world economy.

It’s the success of China’s manufacturing capabilities and
India’s service sectors which is playing a dominant role in
the global economy.

Apart for the BPO and KPO , Software which has given India
sizable aadvantages over other countries is due to labor
arbitrage , where as silently India has come out with
some social engineering practice like Arvind Eye Care,
Dr Debi Shetty’sNirlam Hridalaya, the whole world is
keeping a close watch on these success stories of India.

Indian manufacturing sectors in forging of Mr. Baba Kalyani’s
Bharat Forge supplying materials to all the major auto makers
of the world like BMW, FIAT etc has made a mark in highly
competitive globalauto market.. Mr. Sanjay Lalbhai’s ,
Arvind Mills Ltd has made aninroad in the denim manufacturing
in the world and in pharmaceuticals industry like Ranbaxy,
Dr. Reddy, Cipla, which has become the brand ambassador for a
highly competitive drug market and regularly getting
their molecules passed by the FDA in U.S.A.

The concepts of Micro Credit in order to eradicate poverty and
empowering the destitute and poor in Bangladesh has been
pioneeredand successfully executed by Md Younis in the case
of Gramin Bank.

In 1971 it was Henry Kissinger said Bangladesh is nothing but a basket
nation,but this poor country is trying to stand on it’s own feet..

So underprivileged countries tow decades ago are now the growing and
potential markets for the Western and U.S MNCs.

China's Role In the Global Economy.

In the last two decades globalisation has taken it's proper shape. Interestingly China's role has made the whole management world to rethink about the success that China has made in the manufacturing sectors. The cost effectiveness has prompted the Western conglomerates to shift manufacturing bases to China, in order to remain competitive in the global market.China's role in the BRIC economic block is significant and working as growth engine in the world economy.

There are many questions which comes to my mind regarding the super economic success and sustainable model of China's success.It's the china's central govt policies and its manpower planning and development has helped the economy to grow faster, but the main question still lies how it has motivated it's labor at such cheap price to remain competitive.

1. How can China turn around so fast into a world class manufacturing hub from a closed and command economy?

2. How can be the cost is so competitive by Global standard?

3. How can China motivates its workforce in SEZ, at such low cost, is it by stick or by carrot.

4. The basic principal of Economics is “Capital formation can only be possible through cheap work force"; it has become the manufacturing base of the western conglomerate because of international labor arbitrage market. How long it will be possible to maintain this phenomenon.?

5. Talk about Cisco which is outsourcing its routers from china , but many Chinese manufactured brands in the router segments like Huwai, Maipu ,are coming up very fast and doing brand positioning in the Global market. Which can be threat to many global MNC brands that are getting the contract manufacturing from them? Replicating a business success is not big issues. IBM checked out from PC business and Lenevo (Previously contract manufacturer for IBM) and has positioned its brand in the global market. Don’t you think Western MNCs will be in deep trouble, contract manufacturing, outsourcing can back fire? South Korea Brands like Samsung, LG, etc are giving tremendous fight to U.S and EEU brands.

6. The China is not only in manufacturing hub of the world, they are learning English and by 2012; many of the BPO and KPO jobs can shift from India to China. Soon it will be the service hub of the world and a stiff competitor for its neighboring India. Will it be really possible to be another cheap service hub of the world, next to India?

7. How meticulously they have reaped the demographic dividend, the quality and disciplined human capital has given them the huge dividend, transforming ordinary human capital to a productive and knowledge based human capital within a very short period of time. How this has been possible?

8. How China is maintaining and developing the SEZ, its land acquiring , developments in the infrastructures like roads, telecoms , housing of SEZ. Making SEZ and providing all the infrastructures for investors or contract manufacturing is also important and the central government must have worked proactively and have helped to make these SEZs, viable and productive.

Chapman Alliance To Enhance Talent Management For Indian Corporate Executives.

It is a great news that the Indian corporates are now planning to hire and give job training to their executives to increase their productivity.

The U.S. based Chapman Alliance LLC famous for their innovative and research centric talent management solutions has come to India in Bangalore along with an Indian partner 7X24.

Bryan Chapman founder and chief learning strategist of Chapman Alliance LLC is very bullish about the Indian Market and it can grow 100% Y-O-Y.

Chapman Alliance LLC has got the expertise and experience in training executives in American Express, Coca-Cola, Kodak, Daimler Chrysler, Microsoft, Unicef, and others.

According to Mr. Karthik of 7 X 24 the Indian market is growing at 80% Y-O-Y.
The present executive training market in India is about Rs 2000 Crores( US$ 500 Mn ) per year.

De Risking a Risky Business

One very old definition of profit: It is an award of taking the Risk.
Business is always Risky: Combating the risk is also a smart businessman ship.
For a Global Business operation different type of risk are there which are as follows
1. Economic Risk
2. Envoirnmental
3. Geo Political.
4. Societal
5. Technological.
Obviously all these thing are to be taken in to consideration and how business is being done.
Question is what to do if any the above things happen and business slows down even it may come to a halt.
Answer to this question can be very ambiguous and very complex depending upon the complexity of the of the business problem.
De risking or minimization of risk is very important for every business but the exit berries are very high for all global business
Reducing the Exit Barriers:
a) Out sourcing 70 %of the activities. Manufacturing and Inbound/Outbound Logistics are to be out sources.
2. Core Activities like R&D should be kept in hand the hand of the firm that’s develops the technology.
3. Process: Business Process should be kept in own hand and continuous working and
innovation and evolution should be made.
Confidence Creation in the mind of the Vendors:
1.All vendors who are supplying products or services has to have a great confidence and shouldon the right side, they should be be equally aware about by business, and the ultimate customers who are buying my product and services where vendors plays an important role.
2. Commercial transparency should be maintained with the vendor.
3. Multiple vendors’ creation must be a continuous activity keeping in mind the price point without compromising the quality of service or product.
Confidence Creation in the mind of the Customers:
The customer is the ultimate Boss, they should not shy away from taking my services or product, firm must be very much aware of the business the customers are doing and about the customer’s customers.
Bad times stays for a limited period and again good time comes , so even at customers bad times the firm may have to stand by side of old customers with lower margins. If you loose a US$ 1 Mn customer today just tomorrow you can’t create another US$1 Mn customers. New customer creation is a difficult and expensive task.
It is during the recession period the hyper activity of the marketing dept should start scouting for new markets new opportunities.
Right time for Business Acquisition:
Cash Rich firms can utilize their excess reserves in buying out firms which are aligned in their line of business activity, or acquisitions of small firms which can come at a very cheap rate.
Confidence Creation in the mind of your Employees:
The employee of the firm should be taken in to confidence they are the firm real assets, during bad times they may tend to leave you or instead you want to get rid of them, in the whole process you may loose out many of your best internal talents.
Proper counseling by the top manager should be done, listen to their grievances and anxiety and make them know about the external situation, even they may come forward and may willfully ready for pay cuts. Here The HR Depts challenge is to retain the workforce and holding them intact.
Confidence Creation in the mind of your Investors:
Here is the real smartness of the firm’s management .Firm’s stock values may melt but the management has to be smart enough to do all positive corporate communication with the retail investors ,FII, VC,MF and the Bankers. Firm’s past financial track records should be highlighted, go ahead and say you can repeat the performance once again and even better.
Resilience: Economic resilience of a firm is very important .Time bound plan must be made to fight back the adversities.


The above Risk can come at any time please go thru this extensive report in the
World Economic Forum.
Please Click: http://www.weforum.org/pdf/CSI/Global_Risks_2007.pdf