Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Sunday 28 June 2020

A Seven Year War – Redux ?




The Seven Years' War was a global conflict that was fought between 1756 and 1763 …[ 7 years ]


World War I occurred from 1914 to 1918………………………………………………………[ 5 years ]


The Second World War occurred from 1939 to 1945…………………………………………[ 6 years ]



The Third World War is generally considered a successor to the Second World War…..devastating in nature and likely much more violent than both the First and Second World Wars


In 1947, Albert Einstein commented that,
"I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones."


On the face of it , although it is 75 years since end of World War II , we have been lucky , not to have witnessed World War III

At least, warring countries, are not using Nuclear Weapons to conquer lands of other countries

That is why , man-on-the-street does not get to feel ( at least, directly ), the ill-effects of the TRADE WAR , being waged quietly / relentlessly, since I sent following report to L&T’s Corporate Management, some 31 years ago :

=========================================================

January 5, 1989

Mr. S.R.Subramaniam ,

                                
CORPORATE DIVERSIFICATION


20th Century saw two world-wars between super-powers. The aim of both was territorial expansion.


21st Century will witness a similar war of global dimensions -but with a difference


It will be

*  a war of expansion of economic -territory involving nations,    
    large and small

                        
*  fought by mega-corporations


*  employing world-wide network of space-age technologies /    
    Alliances / resources / markets.


*  unrestrained by national boundaries


*  without an end


   
It will be a business-war in which the unprepared will be wiped-out and even those who have made definite survival-plans will find going tough.


I suggest that the Corporate Management sets aside one full day during the forthcoming Strategic-Plan Meetings, to debate this report and take necessary decisions.


=========================================================

31 years after I wrote this report, China seems to have captured much of that ECONOMIC TERRITORY , as can be seen from following :


Exporter Trade

      Country                  /   US$ Billlion   /    Partner share (%)


Ø  China                 /   2,750  https://wits.worldbank.org/images/tiny-icon-2.png     /   14.57
Ø  United States     /   1,573  https://wits.worldbank.org/images/tiny-icon-2.png      /     8.34
Ø  Germany           /   1,436  https://wits.worldbank.org/images/tiny-icon-2.png      /     7.61
Ø  Japan                /      807  https://wits.worldbank.org/images/tiny-icon-2.png      /    4.28
Ø  Korea, Rep.       /      601  https://wits.worldbank.org/images/tiny-icon-2.png      /     3.19


=========================================================


For past decade, all countries around the World, are trying very hard to increase their EXPORTS and reduce their IMPORTS ( - especially, from China )


They want to regain some of that Economic Territory captured by China , which it managed to WIN due to , what I call , a “ PQD Strategy “ :


P = Price ( lower than the cost at which the recipient country can produce a product locally )

Q = Quality ( better than the quality of product in recipient country )

D = Delivery ( faster delivery of much larger quantities than local manufacturers )


Now , as orders started pouring in from all over the World, Chinese Companies built-up huge manufacturing plants to increase capacities to feed the entire world- often with all kinds of incentives from , both the local State governments and the Central Chinese government ( including various kinds of Subsidies and Export Incentives )


Neither was there any pressure from rising “ Labour Wage Costs “, in absence of Trade Unions


Many companies insisted that its workers live in dormitories built by Companies on factory premises and work in 2 shifts of 12 hours each ( without any overtime payment ! )

=========================================================


Now what could happen if countries around the World ( - not just India ),


Ø  Cut back on imports from China

Ø  Start manufacturing locally, products so far imported from China ?


Irrespective of how much such “ Cut Backs “ would help revive the economies of those countries ( - and be able to create local jobs ), one thing is certain, viz:


Ø  Manufacturing capacities of Chinese factories would remain grossly “under-utilized



How would Chinese companies react ?

Ø  Go back and re-visit the “ P ” in their PQD Strategy

Ø  They would lower their “ Prices “ still further ( while further improving Q and D )



 How would they do this ?

Ø  Since there is little that they can do to reduce their “ FIXED COST “, they will try to lower their “ VARIABLE COST “, viz : manpower cost


Ø  They will lower Manpower Cost by ,

     #  Cutting back on number of workers / supervisory staff

     #  Introducing ROBOTS to replace humans, wherever possible

     #  Reducing salaries / wages , across the board and / or restricting annual wage
         increases , well below the percentage rise in CPI ( Consumer Price Index )


     #  Replacing fossil-Fuel base electric power with Solar Power ( @ Re 1 / Kwh ? )


     #  Even “ mandate “ WFH ( Work from Home ) for most office-workers . To make
         this possible, connect Gigabit Internet in every home


     #  Insist that Companies encourage its workers to set-up “home industries“, by
         outsourcing manufacture of components / sub-assemblies and help them with
         machines and finance ( encourage “Self Employment “ from every home )


     #   Make a “ Strategic Shift “ 

        > from being Factory to the World ,

        > to becoming Back Office of World


        [ a marked shift to SERVICE SECTOR– services which can be delivered to the
          World, remotely from small Chinese towns / villages ]



     #  Abolish Paper Currency altogether by introducing Govt sponsored / controlled
         Crypto-Currency. This will eliminate Black Money / Corruption by making all
         transactions ( Sale / Purchase ) only digital ( including salary-wage payments )


    #  Introduce “ Hire – Purchase “ schemes for foreign buyers of Chinese products


Ø  When Chinese companies drop their Prices still further, that powerful Economic Equation of C > P > V ( Low Costs > lead to Low Price > lead to High Volumes ), will assert itself  
          
======================================================


My Countrymen,


Even as you listen to experts ( politically motivated or otherwise ), ask them :


“ Madam / Sir :


  Please, take a look at the following table , comparing how our economy grew vis-à-vis that of China, over the past decades. Starting at the almost same level as ourselves, China seems to have over-taken us, many times over


It is easy – and convenient – to dismiss China’s phenomenal growth to its dictatorial political system , where the decision-power is highly centralized among a few . No denying that this could be an important / relevant factor


But , certainly not the ONLY FACTOR


I urge you to debate whether that PQD Strategy which I described above, could also be an important factor in China gaining a large share of world’s Economic Territory “


======================================================

{source for following comparison: Not just Galwan, we need to win these 5 battles too  }

=======================
===============================
Srl No
Parameter


Readers: Add comments and share with contacts
1
GDP ( $ Billion )
1980
2018


         India
186.3
2,718


         China
191.1
13,608






2
Urban Population( % )
1950
2020


          India
17 %
34.9 %


          China
11.8 %
61.4 %






3
Poverty Headcount Ratio ( % )
1987-90
2015


          India
48.9 %
21.2 %


          China
66.2 %
  0.5 %






4
Rail Network ( Km )
1980-81
2017-18


          India
61,240
68,442


          China
51,700
127,000






5
Car Production/year
1999
2019


          India
5.3 Lakh
36.2 Lakh


          China
5.7 Lakh
213  Lakh








Dear Narendrabhai,


In your yesterday’s “ Man Ki  Baat “ address to the nation, you invited citizen to come forward and send you “ Innovative Suggestions

Please consider those listed above ( and at the link below sent to you earlier) , which no doubt, China will implement within 1 year !

     Boycott Chinese Products ? A Game Two can play  …………………………[ 09 June 2020 ]



With regards,


Hemen Parekh

hcp@RecruitGuru.com  /  29  June  2020

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