Professional Documents
Culture Documents
China
Napoleon: Let the Chinese Dragon Sleep
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China
Fastest growing country in the world for nearly 30 years Shows no signs of slowing Liberated millions of people from poverty and unlocked massive segments of demand 2004 China accounted for 12% of the worlds total energy consumption and 15% of fresh water consumption; consumed 50% of the worlds production of cement Within a decade will surpass both the EU and US in GDP Under Hu Jintao CCP remains in controlall major banks remain tightly linked to the state; same with key sectors such as oil, petrochemicals, and steel. SOEs still produce more than 1/3 of total output. State involved in all key aspects Development path capitalism with socialist characteristics
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Old Shenzhen
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New Shenzhen
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Top 4 cities*
35%
43%
5,000
BJ
Next 10 cities**
SH HZ NB WZ QZ XM
QZ SD ZS
DG SZ
GZ Population Income
* Top 4 cities = Beijing(BJ), Shanghai(SH), Guangzhou(GZ), and Shenzhen(SZ) ** Next 10 cities = Zhuhai (ZH), Shunde (SD), Dongguan (DG), Wenzhou (WZ), Foshan (FS), Zhongshan (ZS), Ningbo (NB), Xiamen (XM), Huzhou (HZ), Quanzhou (QZ)
Source: China City Statistical Yearbook 2000; McKinsey analysis
Role of the family. Reverence for age, focus on education & self improvement
J Garner. The Rise of the Chinese Consumer. 2005
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Urban Household
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Guanxi
Guanxi describes the basic dynamics in personalized networks of influence, and is a central concept in Chinese society
(Work Unit)
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Arbitrary rules and regulations Lack of transparency Relationships govern business interaction, not laws & regulation, lack of political institutionalization Inadequate protection for intellectual property Lack end-to-end logistics, effective infrastructure, strong regulatory systems Inadequate mechanisms for resolving disputes Emphasis on effort, not on outcomes Emphasis on imitation, not on innovation Managerial effectiveness lags Western leaders Lack of customer focus & understanding Lack of financial controls & discipline Lack of experience with process, change and project management Everything is negotiable
Low
LOW CONTEXT
(Explicit)
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Offshore manufacturers
Types (Based on reasons)
Cost Cutter Market Builders Talent Seekers
10
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11
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12
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India
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IndiaBasic Facts
Area: 3,287,590 sq. km 29 states, 6 union territories Population: 1.08b (2004, est.); 1.5b by 2050, i.e., more than China Currency: Rupees (Rs); exchange rate: 1 $US = 44 Rs Largest cities: Mumbai (Bombay) 16.4m Kolkata (Calcutta) 13.2m New Delhi 12.8m Chennai (Madras) 6.4m Bangalore 5.7m Hyderabad 5.5m
Indias Diversity
Sikhs, 2, 2% Christians, 2.3, 2% Muslim, 13.4, 13% Buddhists, 1, 1%
Jains, 0.4, 0%
Religion: Hindu (80.5%); Muslim (13.4%); Christians (2.3%); Sikhs (2%); Buddhists (1%); Jains (0.4%) Language: More than 1,000 dialects and 16 officially recognized languages Languages: Hindi, Bengali, Telgu, Marathi, Tamil, Urdu, Gujrati, Malayalam, Kannada, Oriya, Punjabi, Assamese, Kashmiri, Sindhi, Sanskrit (English widely spoken and taught in high school) Official Language: Hindi Custom (food habit, dress pattern, greeting style) is different in every region Public Holidays: January 26, August 15, October 2; also major Hindu, Muslim, Christian, Buddhists, Jain, Sikh religious holidays and regional holidays
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BJP; Congress
1998-1999-2005 Continuing Reform FDI encouraged NRI Incentives Privatization mandate accelerated Share buybacks allowed Insurance reform proposed Patent law enacted New telecom policy
4.5%
6.5%
6.5%
% of Households
0.6
# of Households (millions)
1.2
Population (millions)
6
10,001- 20,000
5,50110,000
6.2
12.2
61
3,0015,500
15.2
76
20013,000
13
26.3
131.5
Aspiring
1,000 or <1000
32
64.4
322
Total
197.7
988.5
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Caste Hierarchy
High
Brahmin (Priest) Kshatriya (Warrior) Status Vaisya (Merchant/Trader) Sudra (Servant)
Low Wide
Scope
Untouchables
Narrow
Macroeconomic Statistics
China
Population (millions) GDP/Capita USD Purchasing Power Parity (PPP)/Capita GDP Growth % Inflation rate (Consumer Prices) % Current Account Balance %GDP Forex Reserves (EOY 2006) R&D Expenses %GDP National Innovative Capacity Ranking Worldwide Corruption Index Ranking Poverty (% below national poverty level) Literacy rate % of population age 15+ # of Engineering graduates (yearly) Mobile Phone Penetration Rate Legal Institutions Language of choice for business 1,320 $1,096 $5,600 9.9% 1.8% 9.2% $470B 1.3% 40 78 10.0% 90.9% 125,000 51.80% Weak Chinese
India
1,095 $610 $3,800 9.4% 4.2% -1.1% $131B 0.77% 44 88 25.0% 61% 300,000 14.20% Solid English English is widely used Large # of Eng. graduates Large # of people in poverty Corruption is rampant in public sector Rapidly growing economy
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Demographics
Due to its one-child policy, China's working-age population will peak at 1 billion in 2015 and then shrink steadily. China then will have to provide for a graying population that has limited retirement benefits. India has nearly 500 million people under age 19. By mid-century, India is expected to have 1.6 billion people and 220 million more workers than China.
India's long-term potential is greater.
CNY vs USD
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