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Globalization, Trump, 'Jhina', and the 'Clash of Civilizations'

Discussion in 'Asia' started by Seavoyage, Dec 23, 2016.

  1. Seavoyage

    Seavoyage Been here awhile

    Joined:
    Dec 20, 2011
    Oddometer:
    144
    Location:
    San Francisco but mostly in Asia these days
    I recently posted on a trials bike released in China: http://advrider.com/index.php?threads/tenaci-wong-tw200s.1194012/
    "Reporting from Asia... thought you fellas might find this EFI w/ e-start 200cc 4T model interesting. I'm thinking about grabbing a couple as play-bikes to lure friends/family/fools ('F3') into the fold... maybe crazy enough to do a group order..."

    The responses were quite 'interesting', so I thought I should port the thread to the Asia Regional Forum:

    Thanks y'all for the interesting responses. I didnt expect the thread to evolve to a Globalization or Economic discussion. But since this is ADVrider for global trekkers, here's my take on things, which I'll assume no one is interested in.

    I've been 'Shangheid' to Asia to run a NewCo for the past 18-months; and it really makes me appreciate what we have at home. Don't ever take it for granted. I'm really jealous y'all have the freedom to ride.

    I was in Dubai last month in a BMW 5-series made in China. I was in shock!!! First class quality: http://www.bmw-brilliance.cn/cn/en/pr/brand.html?insitebutton=1-Homepage-Little teaser-BMW Brilliance Products-1
    The Chinese automotive industry is the largest in the world, having surpassed Japan in 2006, and the US in 2009. China manufactures cars for: BMW, Audi, VW, Mercedes-Benz, Ford, Toyota, Infinity, Nissan, Honda, Mazda, Peugeot, Citroen, Fiat, Skoda which are exported... to guess where?

    On a side note: Unfortunate Xispa AKA XPA was made in China and assembled in Spain but failed as a business. [​IMG]
    Here's a review: http://www.mychinamoto.com/forums/showthread.php?1322-Xispa-X250K . Kind of the same business approach as Apple iPhone
    http://www.macworld.co.uk/feature/a...-made-how-much-does-iphone-cost-make-3633832/

    I travel throughout Asia with operations in Japan, China, Australia, New Zealand, Indonesia, the Philippines, Malaysia, HK SAR, and Singapore.

    In Singapore, where we base our company, Dirt Bike riding is non-existent. Public land to ride on, and private land ownership is virtually non-existent since it is so scarce. For the most part off-road motorcycling is illegal. I cross into Malaysia to ride dirt bikes. It's like having to go to Mexico just to ride dirt bikes.

    Are we complaining about the cost of Ownership? Singapore locals have to pay $80,000 for a Certificate of Egibility to purchase a car; and cars are almost twice the price in the US. Any vehicle over 10-years old is heavily penalized to the point its cheaper to buy a brand new car. You don't know how good we have it back in the US.

    The trade off, if there is any, : the vehicle restriction = no traffic congestion, and a 1st class public transportation system. I'd say only the Netherlands is on par, but then the Dutch will ban the sale of all new gas and diesel fueled vehicles by 2025.

    Singapore infrastructure and technology/economic growth is a real eye opener. 9% income tax cap, 0% Capital Gains Tax. It takes 20-minutes online to launch a company in Singapore. If you are in the Tech sector and in a promising field the Government will match you $5.60 for every $1 you invest. 1GHz Internet connectivity (3x the fastest we have in the US) is only $23/mo. There is virtually no crime: Put your iPhone down on a table in a 'public food court' to save a table... no one is going to touch it (except for foreigners). No homeless since everyone is provided housing, no unemployment. At least thats the Government propaganda. Health care and housing is covered from your income tax (9%). It's a strange exercise in Utopia but the price is a 'unique mindset' in the populace. I'll leave it at that so I don't offend anyone.

    The contrast is in neighboring South-East Asia countries (Malaysia, Thailand, Philippines, Vietnam, Indonesia, etc.) where a new mass produced <200cc motorcycle can be had $300 and used bikes for $150. Our Japanese clients outsource their Software Development to Vietnam at $250/month. Thats insane! Thats Globalization for you and the Japanese and Chinese are scrambling to get these labor rates.

    My Japanese clients, having endured decades of economic recession are resigned that cash rich China has overtaken them, and they cannot compete. Tokyo cost of goods is so much cheaper than US coastal major cities (NYC, LA, SFO).

    They say that as of 2016 there are more Millionaires in China than any other country in the World. Chinese capital is overflowing, and they want to invest outside of China due to concerns on liquidity and the value of the Yuan (CNY). It isn't uncommon for Venture Capital offers from China in the $10M-$20M no questions asked. One of my associates just raised $20M for 20% at a $100M Valuation on a Powerpoint. I use to be in Silicon Valley so I'm confident to say this was a real wake up call.

    The Chinese market is huge. We have a client that has over 800 Million customers. Thats almost 3x the total US population. Another client opens 200 Pharmacy branches each month (at the quality level of a US CVS Pharmacy). What results in rapidly emerging wealth that is very discerning on quality.

    The Chinese companies that have to work with Foreign Corporations are very concerned with changing the International perception of Intellectual Property theft and Theft of Trade Secrets. The realize that their future growth is dependent on it.

    Dealing with the Chinese (and the Japanese) is a cultural exercise in 'Lost in Translation'. The Chinese are in your face no BS business. The Chinese will tell you , sometimes in what we perceive as rude, exactly what they want and at what price, and put the cash or write the check right in front of you on the first meeting. There is no ambiguity. They don't subscribed to the the Western BS pervasive in the US with over marketed sales or over leveraged finance. It's a straight forward cash transaction or take a hike...

    The Chinese will find your business on Social Media, call you, fly out to your location, and make a blatant offer to acquire your company that has been in the family for 3 generations. They really don't care. It's just business.

    The challenge is for the Chinese to gain the trust of Foreign clients. But at the end of the day you have to appreciate the Chinese mentality. The Mandarin words for China translate to 'Central (or Middle) Kingdom'. The Chinese are very ethnocentric, and are 'very proud' that their Civilization outdates the West and of current economic might . They really don't give a 'F' what any non-Chinese thinks.

    Caveat: Im not a Sinophile. I'm just trying to navigate the business opportunities.
    #1
  2. DittyBag

    DittyBag A bag of dirty stuff

    Joined:
    Mar 24, 2015
    Oddometer:
    1,132
    Location:
    Worry, NC
    Hey, thanks for the information.:beer
    #2
  3. Farang Paul

    Farang Paul A Late Convert

    Joined:
    Mar 29, 2013
    Oddometer:
    145
    Location:
    Krabi, Thailand
    Thanks for your input Seavoyage - I hope you don't get flamed to badly! I took issue with a member here over his outdated and one-eyed views on quality in Asia and got kicked off for my trouble.
    I have spent the last 30 years in Asia, India and Central America sourcing product for all the major players in Europe and the USA. Trying to persuade some members here that quality of output from well run factories here in Asia exceeds that in the USA by a long way (and Europe too) is like pushing water uphill.
    Anyone with knowledge of economic history will recognise that tariff barriers, quotas, additional taxes etc. are only a short-term solution and often kill the very business they set out to protect - unless immediate steps are taken by that protected business to become globally competitive. With reduced manufacturing costs offshore, money can be diverted to improving the quality of parts (just compare the quality of finish on a Triumph Bonneville ex Thailand versus the previous UK finish) and the specification of the product. Sadly the USA has a history of companies going broke because profits from protectionist moves that many inmates here shout out for, are diverted to the financial market as profit, rather than re-invested into the company to improve quality and price, as the usually are in Asia. For example: in the seventies I purchased at least 30% of production from Hong Kong and 5% from Singapore. Both countries have long since ceased manufacturing in any of the sectors I purchased from, but both countries have boomed economically why? Because the companies in those countries were dynamic and moved upstream to higher skilled/value sectors and outsourced their manufacturing.
    Singapore, where I have spent many years, is great for work and not a lot of fun for play. I now live in Thailand where biking (dirt, touring or track) is fun and readily available if a little hairy at times!
    #3
  4. Seavoyage

    Seavoyage Been here awhile

    Joined:
    Dec 20, 2011
    Oddometer:
    144
    Location:
    San Francisco but mostly in Asia these days
    Nice call sign 'Farang' ( no where close to ชาวต่างชาติ )

    China used more cement between 2011 and 2013 than the U.S. used in the entire 20th Century. :
    https://www.washingtonpost.com/news...-than-the-u-s-did-in-the-entire-20th-century/

    Here's Bill Gates tweet:
    The most staggering statistic in @VaclavSmil’s new book: http://b-gat.es/1oYsC7G and Gates Notes:
    https://www.gatesnotes.com/Books/Ma...?WT.mc_id=06_13_2014_smilc_tw&WT.tsrc=Twitter

    [​IMG]

    Gates plucked the statistic from the historian Vaclav Smil, who calls cement “the most important material in terms of sheer mass in our civilization.”

    What's fueling this consumption? "the country is urbanizing at a historic rate, much faster than the U.S. did in the 20th Century. More than 20 million Chinese relocate to cities each year, which is more people than live in downtown New York City, Los Angeles and Chicago combined. "

    Shanghai 1987 to 2013:

    [​IMG]

    Smil's conclusions are often bleak. He argues, for instance, that the demise of US manufacturing dooms the country not just intellectually but creatively, because innovation is tied to the process of making things. (And, unfortunately, he has the figures to back that up.)
    #4
  5. Seavoyage

    Seavoyage Been here awhile

    Joined:
    Dec 20, 2011
    Oddometer:
    144
    Location:
    San Francisco but mostly in Asia these days
    Ever since Mao Zedong's "Great Leap Forward' (1953-1957) China articulates its Five-Year Plan. These Five-year Plans Socialist Economies establish and details the countries' social and economic development initiatives.

    China is on it's 13th consecutive 'Five-Year' Plan: A quick scan should capture Americans attention... it's highly probably China will have their act together by 2020. Thats only 4-years or 1 Presidential term away.

    Focus areas:
    • Innovation: Move up in the value chain by abandoning old heavy industry and building up bases of modern information-intensive infrastructure
    • Balancing: Bridge the welfare gaps between countryside and cities by distributing and managing resources more efficiently
    • Greening: Develop environmental technology industry, as well as ecological living and ecological culture
    • Opening up: Deeper participation in supranational power structures, more international co-operation
    • Sharing: Encourage people of China to share the fruits of economic growth, so to bridge the existing welfare gaps
    Policies
    • "Everyone is an entrepreneur, creativity of the masses" (大众创业,万众创新)
    • "Made in China 2025" (中国制造2025)
      • Aims to address four worrying trends in current situation:
        1. (Nationally) vital technologies lack a (domestic) core platform
        2. Chinese industrial products are perceived internationally as inferior quality
        3. Domestic industrial competition is fierce due to overly homogeneous structure
        4. Poor conversion of academic research results to practical application
    • "Economy needs a Rule of Law" (建构法制经济)
    • "National defense reform"
      • Organisational reform of the army, slashing number of highest generals, as well as concentrating branches' functions, moving some under Defence Ministry
    • "Urbanization with Chinese characteristics" (国家新型城镇化)
    • "Reformed one-child policy"
      • Now called "two-child policy"

    [​IMG]
    #5