Mary Branscombe (marypcb) wrote,
Mary Branscombe

Future in Review: how to succeed in China - move in

According to Cisco, the way to do it is to set up in China properly; relocate some VPs, hire lots of staff, design and manufacture there rather than just sending in plans. Although that exposes a lot more IP, it turns out you get viewed as a Chiense product and aren't then subject to the "alleged malpractices" that other companies have suffered in the past. There's something fundamental about the philosophy of doing business in China encapsulated there (maybe even the philosophy of China in terms of belonging and being foreign, which is interesting when Western business philosophy is just starting to acknowledge thta corporations act in their own interest, not the interests of their parent country) and it's contrary to the standard shortcut advice of 'don't take IP you don't want to lose to China'.

Tens of thousands of factories have shut down in China; 20 million migrant workers have lost their job, ten million have gone back to their villages - some of them pushed out almost deliberately to increase the manufacturing capability in the interior, according to Ira Kalish of Deloitte Research. The middle class in China hasn't lost jobs and they're still spending. That sounds like the recipe for a divided nation...

40% of the toxic US assets ended up on the books of European banks. Consumer debt as a proportion of GDP is higher in the UK than in the US, which I find hugely worrying compared to the popular perception that it's Americans who buy big cars and giant fridges and put them in huge houses (I said popular perception, remember). In 2006 US consumers got 200,000 billion dollars by 'cashing out' of their home equity; last year it was 20 billion; people don't move into smaller homes nearly often enough to earn that money. Interesting implications for the US/European recovery; all the predictions here at FiRE that don't rely on pseudo-phsyics say the US situation bottoms out at the end of 2009.

(In other news, if you get a Facebook message suggesting you check out some oddly worded site, do what I do with any spam that suggests a site without proving it's really from someone I know - don't click, delete the message and tell the alleged source they probably have a Facebook virus and should clean up their system (or get a better password, perhaps). Liam, this means you - amongst others.)

Tags: conference, fire, fire 2009, technology

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