The Hindu Business Line : China changes value-for-money equation

A world “where high technology, variety, and customisation, along with specialist products, are available to customers at dramatically lower prices” is no longer fantasy, say Ming Zeng and Peter J. Williamson in Dragons At Your Door.

Too busy with your own problems? If yes, it is quite likely that you have not have seen the Dragons At Your Door. And, for those who have just started noticing the fire-breath from below the door, Ming Zeng and Peter J. Williamson can offer a strategy: ‘forge a global alliance with a Chinese company — and use it to bolster your chances of success not just in China but in global markets’. The book from Harvard ( www.HBSPress.org ), which is about ‘how Chinese cost innovation is disrupting global competition’, explains how the challenge from the Dragon Land strikes ‘at the heart of what makes many businesses in high-cost countries profitable today’.

A world “where high technology, variety, and customisation, along with specialist products, are available to customers at dramatically lower prices” is no longer fantasy. The value-for-money equation offered to global consumers has already been transformed by Chinese multinationals, say the authors.

They begin with the case of CIMC (China International Marine Containers) Group, ‘global number one in terms of volume’ since 1996, and ‘six times larger than its nearest competitor, dominating the world of shipping containers with more than 55 per cent global market share’. Its corporate slogan is simple: ‘Learn, improve, disrupt’.

CIMC has been capturing one segment after another, including “products with sophisticated refrigeration, state-of-the-art electronic tracking, internal tanks, folding mechanisms, and customised features”. Graaff, a German firm that had licensed to CIMC its first refrigeration technology in 1995, became bankrupt and in 2005 it sold 77 of its patents to the Chinese giant. In 2004, CIMC bought up “60 per cent shareholding in Clive-Simth Cowley, the British company that invented the proprietary ‘Domino’ technology that allows empty containers to be ‘folded’ for ease of back-hauling…”

Compulsory read, unless you are too overwhelmed by your own woes.
Dynamism of the people

While the rest of the world worries about the power of China’s best factories to kill off jobs, the Chinese themselves must worry about how competition in their own country is spiking unemployment, writes Ted C. Fishman in China, I nc. ( www.crosswordbookstores.com ). For, the scene now belongs, not to government-backed juggernauts, but lean and mean enterprises, ‘planned and financed by investors who want to make money quickly.’ Since 1978, nearly 40,000 state-owned enterprises have been shut down, the author informs. “From 1996 to 2001, 53 million people working in China’s state sector lost their jobs. That is 7 million more people than the total employment rolls of 46 million at the 500 largest corporations in the world.”
Fishman sombrely narrates how the death march of the state-owned companies began when villages took it on themselves to take a run at the state monopolies and started their own businesses. “The Chinese leadership itself was unprepared for the dynamism of its own people.”

Fast-paced.
A difficult boycott

China is present almost everywhere, with its products saturating supermarket shelves and assembly lines. In protest, Sara Bongiorni and her family decided to stay away from Chinese products for the whole of 2005. A Year Without ‘Ma de in China’ ( www.wiley.com ) is her tale of the boycott.

“We had no idea what we were up against. China is the world’s largest producer of televisions, DVD players, cell phones, shoes, clothing, lamps, and sports equipment. It makes roughly 95 per cent of all the video games and holiday decorations imported into the US and nearly 100 per cent of the dolls and stuffed animals sold here — an inconvenient fact for a family like ours with small children,” reads the intro.

Bongiorni speaks of “a dream that seems like it’s about Wal-Mart but is really about the China boycott.” One day, Wal-Mart’s dark angling for ‘Low Prices’ will catch up with it and the company will implode, Enron-style, she foresees. “It may take 40 years, but, in the end, I’ll have the last laugh. It will be death by a thousand cuts. Just wait and see.”

Reminiscing the boycott, she writes, “Sometimes I miss the boycott. It feels like we’re caving in to something when we buy something with a ‘Made in China’ label. It feels too easy. But trying to live without China sometimes felt the opposite: Too hard, at least to stick with for good.”

Daring experiment in economics.
Falling behind and falling apart

Why are the poorest countries failing? Paul Collier explores the question in The Bottom Billion ( www.oup.com ).

“The book is about the Malawis and the Ethiopias of this world, the minority of developing countries that are now at the bottom of the global economic system,” he writes in the preface. “The decline of the countries now at the bottom is not just relative; often it is absolute. Many of these countries are not just falling behind, they are falling apart.”

Thus far, we have defined developing countries as all those besides the most developed, which account for only one-sixth of the earth’s people, explains Collier. “But not all developing countries are the same. Those where development has failed face intractable problems not found in the countries that are succeeding.”

The issue is not significant only to the billion people who are living and dying in fourteenth-century conditions, the author observes. “It matters to us. The twenty-first century world of material comfort, global travel, and economic interdependence will become increasingly vulnerable to these large islands of chaos.”

A book you can’t ignore.
Colluding against citizens

To conspire means to collude, and that’s what big corporates are doing, says Sharon Beder in Suiting Themselves ( www.vivagroupindia.com ). “Business coalitions such as the WEF, the European Business Roundtable and a range of US groups have ensured that through the WTO, the corporate goal of free trade will always have precedence over citizens’ goals such as environmental protection, improved working conditions and health and safety considerations,” she writes.

“The right of every member of society to take part in the conduct of public affairs has been usurped by corporations who have avoided and bypassed democratic decision-making and rendered it meaningless.”

And by the time the world’s citizens realise the consequences of their current losses, it may be too late, rues Beder.

Portentous.
Help build assets

One way to end poverty can be microcredit, argue Phil Smith and Eric Thurman in A Billion Bootstraps ( www.tatamcgrawhill.com ). Since traditional charity programmes can only provide short-term relief, we need to apply investment principles to philanthropy, they suggest.

Cases presented in the book show how microcredit helps in increasing personal income and also assets. “Lasting well-being comes as the poor gather assets such as savings accounts, equity in homes or land, successful businesses with higher income potential, and better job skills. These assets give borrowers realistic hope for a better future and the conviction that it is attainable.”

Forceful presentation.

D. MURALI
http://BookPeek.blogspot.com

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