china shakes the world
TRANSCRIPT
China Shakes the World
The rise of a hungry nation
Presented by
Akhil Bhardwaj
Content
Introduction
Present china
The impact
The cost
Summary
Introduction
Writer - James Kynge
Published in - 2006
Award – Business book 2006
Most growing economy
Most populated nation
Most polluted nation
About book
About nation
Introduction to chinaSpecifications In year 2011
GDP $ 11.29 trillion
GDP real growth rate 9.2%
GDP per capita $ 8400
Population below poverty line ($ 363) 13.4%
Labor force 795.5 million
Unemployment rate 3.5 %
Investment 54.2% of GDP
Commercial prime lending rate 6.56%
Industrial production growth rate 13.9%
Contribution to world output 2012 16.4%
Contribution to world GDP growth 2012
1.2% out of 3.2%
http://www.indexmundi.com/china/economy_profile.html
http://www.conference-board.org/data/globaloutlook.cfm
Evolution of china has
revolutionized the world
The Impact
Chapter 1
Germany’s largest steel mills reduced to a few mounds of twisted scrap
Ultimate chinese takeaway
250,000 tonnes equipment shipped with 40 tonnes of documents that explained the reassembly process
In 1978, more than 400 million people lifted above the poverty line
Economy recorded an annual average growth rate of 9.4%, the highest of any large economy in the world
Chapter 2
Chungking, china’s wartime capital
Picture had changed in malls and restaurants
Similarity between chicago and choungking
Choungking is growing 8 times of chicago ( took 50 years to increase to 1.7 million)
Infrastructure development
Travel time reduced to 2 hour covering 110 km
In 1998, hefei to wuhu journey took 6 hours and in 2002 took only 1.5 hours
Over 700 million people are thought to get by on less than $2 a day
Labour cost
Chicago: $196-$294
3 times of chinese wages for similar manual work
China population is more than Europe
Economy size China Europe
By 1400 GDP $ 37 billion 1985
$ 18.4 billion 1985
By 1400 PCI $ 500 $ 430
1820 $ 500 $ 1034
1950 $ 454 $ 4902
Electricity production
By 2004, china has built enough power plant to supply all electricity to Italy or Spain
Women suicide
Suicide among young rural women rank as one of china’s greatest social ills
500 women are committing each day
Chapter 3
Industry revolution
By 2010 to 2020, china will have autos equal to population to germany 500 millions
In 2005
200 million middle school student
22000 marriage every day
44000 babies are born every day
Eat 1.6 million pigs and 24 million chicken every day
Mainland university produce more graduates each year than US
China grows old before it is rich
Job opportunities: even economy grows at 10% but fails to create 24 million new job required each year
Yin mingshan’s career: Chinese manufacturer
Piracy at large
American, japanese and european companies may have been losing $60 billion a year
Commercial banks don’t believe in bankruptcy
Unemployment
Slump in consumer spending
Example of microwave and AC manufacture
Bank cares
if company is getting bigger and stronger
If increasing scale and reducing unit cost
Haier with 86 products
Chinese manufacture expects only 2 to 3 % margin only
Yiwu becomes largest wholesale market in world
Chapter 4
Prato, center of european textile for more than 700 years
Business setup by chinese in prato
Only one part of making a garment outsourced to china in history but now every step of production is outsourced
Shoe making, stitching, silk, tie business
Year Chinese run firms
1992 212
2003 1753
An Italian company had decide to close one unit out of two and built near shanghai
Demand of chines skilled labor and engineers hired abroad
Chapter 5
Rockford
Wal-mart affect on rockford, sourcing products from china
Auto machine tools & Automobile parts
Undervaluation of currency
Banking system
Cheap credits
VAT rebate to exporters
USA China
R&D 2.7 % of GDP 1 % more
Added value 22 % Less than 5%
Technology emergence supported by commerce more than research
Car company joint venture
Expensive Engine structure: banks were willing to finance it
Semiconductor and computer chips
The Cost Air pollution
Fuel Problem
Crisis of trust
Grey area
Privatization
Corruption
International affairs
Chapter 6
Air pollution:
380000 people dying each year by 2010
Every 3rd lake and quarter rivers polluted with mercury
Fuel problem:
20 year ago largest exporter in east asia
Now second largest importer in the world
Huge requirement
Forest cutting
A belgium was cut down during the year 2004, six football fields every minutes
Fastest growing market for timber products and paper pulp
Chapter 7
Crisis of trust was rated as one of the top 10 ills
Story of Qi yuling presents the breakdown of trust
Qi yuling name has been used by a party secretary daughter and by president of Bank of china “’Big 4”
Ph. D in rocket science can be purchased for less than $ 100
Hundreds of thousands of unlicensed factories operating in twilight of relationship with local officers
Informal economy is one third of economy
Sale of fake baby milk powder
Transfusion of HIV- contaminated blood to villagers
Lenovo paid $ 1.75 billion to IBM for personal computer unit
Not pushed by US market but by the need of defend itself at home by Dell and HP
Chapter 8
Story of “Mr Bankruptcy” cao
Arrested “ Black Hands”
Concentrating on career as an adviser for his companies
“Government is servant”
Cao suggested
Bankruptcy law
People in national people’s congress
Privatization
Only 40 companies Out of 1600 listed companies are private
Organization structure : stakeholders don’t have rights to influence the decisions of the board
Story of reed flag company and chairman Baiwen
$190 billion cost to clean up balance sheet of two members of “Big 4”
Corruption
All 38 central government ministers and organizations are cooking their books
Chapter 9
Joke of a zoo in taxi: Comparing between westerners and monkeys (“Hou”)
Waishi or foreign affairs as soviet union
Handbook when olympic games are hosted in 2008
Contribution of
Foreign technology
Expertise
Access to foreign markets
Infusions of overseas capital
Foreign reserve in 2005: $ 710 billion
To buy US treasury bonds
Help in public spending and war in iraq but assisted in keeping interest rate low
Imports
Aluminum, copper and iron
Risen from 7% of world demand to 40% by end of this decade
In 1997, sudan became largest overseas oil project with 40% stake in sudan’s oilfields and china has turned into sudans’s biggest supplier of arms
Relation with
Tehran
Pakistan
Bangladesh
Burma
Japan
China is much wedded to the world, too dependent on others to bite the hands that feed it
Summary
Chapter one to five presents studies of chinese successes in manufacturing and industry with Europe and US
Drawing some examples of vehicle production, textiles, steel etc.
Chapter six to nine assess the impact of china revolution from a variety of perspectives
Environmental cost: on rivers and forest
Social costs to individuals and families in china as well as in west who feel they are “ losing to the rising chinese state”
Thank you !!!