What I Saw, Heard & Learnt About China (during my visits in 1988, 2006 & 2007) By Dr T.H. CHOWDARY...

What I Saw, Heard & Learnt About China

(during my visits in 1988, 2006 & 2007)

By

Dr T.H. CHOWDARY Director: Center for Telecom Management and Studies

Chairman: Pragna Bharati (intellect India )Former: Chairman & Managing Director

Videsh Sanchar Nigam Limited &Information Technology Advisor, Government of Andhra Pradesh

T: +91(40) 5567-1191/ 2784-6137(O) 2784-3121®F: +91 (40) 5567-1111, 2789-6103

[email protected]@satyam.com

Talk @ CESS: 23 Jan 2008

THC-CTMS S371_Jan'08 2

Indian Heritage Abroad

• Bankok’s New international Airport

Name: SUVARNA BHUMI

Mural: SAMUDRA MANTHAN

• Beijing International Airport

Mural: State that greets Arrivals :

Gautam Buddha

• Chinese Government gave 5 Acres to Sami Narayan Trust to build Akshar Dham in China


China Restructures Telecom

• China re-structured telecoms to conform to W.T.O; Globalisation and to evolve into a knowledge society

• It corporatised & broke-up telecoms to learn competition before it can allow foreign Telcos to compete in China

• In 2008/2009 China opens telecoms to FDI & ownership


China’s IT & Software Business

• 160 clients in Asia Pacific• 400 of Fortune 500 now source from China (same as in India)• China turns out 2.8 m grads with 10% Engineers• 10 X FRG• Now 92% Chinese• Svng 25 customers from Fin svcs, Telecom Mfg & govt verticals• 5000 Associates by 2011• But benefits 35%• Chinese IT demand is highly domestic• China sought TCS to set up a software co. with large scale offhsopring and role

model for Chinese IT industry• In China 75% of outstanding is form Japan• Japan kanji characters are Chinese• Behan University specializes in Aerospace Engineering • China produces 2000 Aerospace Engrs/yr• TCS has over 1400 Associates in China (Beijing Shanghai & Hanghow) 92% are

Chinese ; services 25 large customer ( Fin, Telecom Mfg & government)


China Telecom

China Unicom

China Mobile

China Netcom

JitongChina

SatelliteChina

Railcom

Local phone

● ● ● ●

Long-d call ● ● ● ●

Mobile ● ●

Internet ● ● ● ● ● ●

I-D call ● ● ● ●

IP phone ● ● ● ● ●

Sat-te call ●

Operation of the Telecom Service Market in China in 2002


2005 2006 2007 2008 2009

Subscribers of Fixed-line (million)

361.614 408.624 453.573 489.859 514.352

Density of Fixed Line (%) 27.7 31.1 34.3 36.8 38.5

Subscribers of Mobile (million) 383.371 433.209 480.862 519.331 545.298

Density of Mobile (%) 29.3 32.9 36.3 39.0 40.8

Subscribers of Internet (million) 119.250 137.138 153.594 168.953 182.470

Density of Internet Subscriber(%)

9.1 10.4 11.6 12.7 13.7

Density of PC(%) 5.6 6.5 7.7 8.8 9.8

Telecom Investment(US$ m) 12,456 12,118 11,661 11,302 10,954

The Development of China Information Industry


0

50

100

150

200

250

300

350

400

450

2000 2001 2002 2003 2004 2005

Year

Nu

mb

er o

f s

ub

scrib

ers

Fi xed Li ne Mobi l e

Fixed Line and Mobile Subscribers (Million), 2000-2005


Telecoms revenue as % of GDP

0

1

2

3

4

5

1991 1993 1995 1997 1999 2001 2003 2005Year

%

The Development of China Information Industry


The Revenue and Increasing Rate of Mobile and Date Service


数据来源：中国互联网络信息中心（CNNIC）

4560

5450

3630

2572

1613

1002

0

1000

2000

3000

4000

5000

6000

2001.06 2002.06 2003.06 2004.06 2005.06 2006.06

万台

The Total Number of Computers in Internet

Unit: ten thousand, Source: CNNIC



0

2000

4000

6000

8000

万人

专线上网网民数 857 1606 2342 2870 2970 2860

拨号上网网民数 2196 3657 4991 5755 5500 4750

宽带上网网民数 200 980 3100 5300 7700

2001.06 2002.06 2003.06 2004.06 2005.06 2006.06

Three Types of Internet Subscribers from 2001 to 2006

Connected by special, phone and B-band, Source: CNNIC



2650

4580

6800

8700

10300

12300

0

2000

4000

6000

8000

10000

12000

14000

2001.06 2002.06 2003.06 2004.06 2005.06 2006.06

万人

Internet Subscribers from Jun 30 2001 to Jun 30 2006 in China

Unit: ten thousand, Source: CNNIC


China Telecom

China Unicom

China Mobile

China Netcom

JitongChina

SatelliteChina

Railcom

Local phone

● ● ● ●

Long-d call ● ● ● ●

Mobile ● ●

Internet ● ● ● ● ● ●

I-D call ● ● ● ●

IP phone ● ● ● ● ●

Sat-te call ●

Operation of the Telecom Service Market in China in 2002


20

31

42

50

55

2002 2003 2004 2005 2006

Investment in E-Gov in ChinaUnit of measure Billion RMB


Status of Some Indian IT Cos. In China (Sept 2007)

Company China debut year

Current headcount

Targeted headcount*

Work being done Future plans

Cognizant 2005 370 N.A MNC clients Japanese and domestic market

Infosys 2004 700 4,000 Domestic and MNC clients

Japanese and domestic market

Satyam 2002 500 1,000 Japanese and Hong Kong comp.

Domestic market and MNCs

TCS 2002 1,000 5,000 Domestic and MNC clients

Japanese market

Wipro 2004 150 1,000.

-1,500

MNC clients Japanese and domestic market

(Source: Business World, 3 Sept 2007)


• India’s Exports of Software services in FY 2007 $ 31 bln

• China’s FY 2007 $3.59


Where Research is headed

0 5 10 15 20 25 30 35

Tiwan

Russia

Canada

France

Germany

India

China

India is the third most attractive foreign destination for non-equity R&D collaboration

(Source: Business World ,3 Sept 2007)


Ten-Year Trend in Engineering and Technology PhD Degrees in the United States, China and India

-

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

9,000.00

10,000.00

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

Academic Year

Gra

du

ates

USA China India

Source: The India Economy Review, 30 Sept 2007, Vol.4; www.iipm.thiktank.com


Ten-Year Trend in Engineering and Technology Master’s Degrees in the United States, China and India (Actual and Estimated Data)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

Academic Year

Gra

du

ate

s

USA (Engr/Techl) China (Engr/Techl) India(Engr/Techl) India(MCA)

Source: The India Economy Review, 30 Sept 2007, Vol.4; www.iipm.thiktank.com


China City-scape (1)

• 1988 - (with Rajiv Gandhi) Bicycles everywhere, few cars & Cranes and Cranes

• 2006 - Brood Avenues, tree-lined Sky-scrapers ( Offices & Residences)

• Glittering Shanghai• National Highways 6 to 8 lanes fly(ing) ovres on villages.

Min.Speed 100/120 kmph• Cars, cars…• Mao’s Mausoleum – no longer venerated by the young

professionals • Professors willing to take criticism• English understood in Hotels • Some taxis


China City-scape (2)

• 2007: Cars, cars everywhere• Traffic congestion• Old habitations being pulled down, M.S

buildings coming up• Hotel service improved remarkably, English

more widespreadly understood • Old & young exercising from 0530 Hrs. to 0800

Hrs.• Rail-Road & services to thasa commissioned –

Presscerised cars; track on permafrost!


17th Congress of the Communist Party (1)

• Membership 73 mln

• Capitalist Members 73,000

• Harmonius Society

• From party-building to nation-building

• Consultative ( not electoral democracy)



• Of 11 Members of the Polit-Bureau 10 are engineers & Scientists – Prez: hydraulic Engineer

• P.M : Geologist• Worrisome: Rich-Poor Gap

Rural Unrest (Acquiring of land for Industries) • Take over of land for industrialistion• China faces secessionist movement form Moslems in

Xing Xiang province; demography being changed as in Tibet

• China Russia rivalry for hegemony in central Asia • Decision to have 2 Children !



• Normalisation of relations: Russia, India, EU, UK

• Modernisation of Armed Forces– Laser-killing of Satellites – Man on the Moon

• IP Creation-HUWAI, ZTE etc.


Education

• 2000 Universities• Wants to produce 2.0 mln Engineers/yr• Telecom & Aerospace Universities• ‘Varsity education not for all ( no right)• Entry thro’ all-China exam• Students allotted to best Universities according

to scores• Scholarships for almost all• Compulsory Residence• Debit cards ( tuition fees, mess…)


Education (2)

• Huge libraries• Broad-band /Internet• Few printed newspapers but wall papers• Labs &Libraries open day & night• No Unions, no elections, no strikes• Bikes for internal movement• Grocer shops al around outside• Entry/Exit restricted Identity cards compulsory


Education (3)

• Professors outspoken about economics, education, society but reticent about politics

• “Pro-forma” political parties – 8 besides the communist party ( all tails like those of CPM in West Bengal”


General (1)

• Only one English TV ! Channel I Beijing CNN (China News Network)

• Nonsense as in India not shown• Party Member at work shown – Development • Minimum Living income guaranteed – Shortfall

subsidised thro’ debit card• Work for all and amelioration of poverty possible

only because of one-child norm 1978-2007• Huge migration from rural to urban• Millions out of job because of privatisation of

SOEs – 1500 slated for 2008


General (2)

• Extensive schemes of re-skilling• Health for all – failing Insurance• GDP contribution

Py Mfg/Sy Svces15% 55% 30%(18) (26) (56)

• Manufacture, Housing & Constructing – Engines of economy

• Huge trade surplus $ 350 bln• Huge Exchange Reserve ~ $ 1.0 Trl


Any Lessons for India?

• Population Stablisation• Population asset if brains are counted;

liability if mouths & bodies are counted• Education for all ( upto HSC)• Control rural to urban migration• Regulate TV channels (no prurience but

information, instruction & Inspiration by example)• Self-confidence, self-respect, pride in Heritage (100 Confucius Centers abroad – Not Marx, Engels, Lenin, Stalin; Mao)


Deng’s Re-orientation

• Glorious to be rich • Doesn’t matter whether cat is black, red or

white as long as it can catch the rats• Some people have to become rich before

the poor get out of poverty• Gainful work, not ”welfare-dependence”• Central Party School : Tens of thousands

educated; instructed; trained (Com.Mohit Sen taught there)


China-India-US-Russia Engagements

• Indian Ocean control (Malacca Straits) Gwadar (Pak), Cocoon ( Myanmar)

• Lhasa-Kathmandu Rail link• 3 airports along McMohan line in Tibet• India’s Exclusion form APEC &ASEAN –

Malaysia as catspaw• India &China compete for oil resources in

central Asia, Sudan….• Giants as neighbours-Buffers?


Dhanyawad:Thank You

Go to next for optional information


India X China

• Economic Reforms: China 1978; India 1991; China built human capital-education & health & controlled population

• China’s reforms gone farther; reaped bigger rewards• Regional disparities, unemployment & enduring

poverty of farmers common problems • Short of land, water, energy & face environmental

decay• China’s cities transformed out of all recognition;

India’s, in most visible essentials, stayed the same.


India X China

• GDP & PCI Growth:

Growth 1980s 1990s 2000-08 GDP 2007

China 9.3% 9.7% 10.0% $ 2100 bln

India 5.6% 5.8% 8.5% $900 bln

• National PCI of China has grown 70% richer than India


India X China

• China’s idle young look at Internet• India’s idle young look at the Idiot box, TV• Boys to girls : China 118 to 100 Ratio India 108 to 100 Delhi 122 to 100• In 1800 AD China was slightly richer than India

but poorer since then


India X China

• BPL ( < $1/ day) fell by 400m in China between 1981 & 2001 and by 20m

In India between 1977 & 2000 BPL fell by

17% and in China by 35%

Year China India

Undernourished 1992 194m 221

2002 142m 216


India X China

• ¼ of world’s poor in India

• 47% of India’s under Y5 are underweight

10% in China

China India

Infant mortality per 1000 30 65

Life Expectancy 71 63

Adult Literacy 91 57


India X China

ChinaIndia

Fixed & mobiles 850m 255

Mfg.firms owning Gensets 27% 61%

Cost of power is 39% lower in China than in India

• Workers in China 25% more expensive than in India but 50% more productive because of better & more education


India X China

• India more corrupt than China

• Transparency Intnl Year China India

1994 2.16 2.8 2004 3.4 2.8

[Anything below 3 is rampant corruption ]


India X China

• India more efficient in using capitalInvestment/GDP GDP GrowthIndia (22 to 23)% 8%China 45% 10%India’s employees in mfr. 6.2m

China’s 160m* India needs to invest 35% of GDP to get GDP

growth of (8 to 9)% but subsidies to poor are increasing


India X China

• India must move people from farm to factoryFarm productivity Y2001

China IndiaRice 6350 2904 kg/hectareWheat 3823 2742• Time taken 41 89 days to get business pmt:• Co. allowed: 2.4 Y 10Y to go


Big thinkersChina’s R&D staff and spending

0

50

100

150

200

250

300

350

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Spe

ndin

g, y

uan

bn

Sta

ff,

FT

Es*

, m

* Full-time equivalent man-years(Source: The Economist, November 10, 2007)


Electronic artisansTrade in ICT* goods, $ bln

0

50

100

150

200

250

300

350

1998 99 2000 2001 2002 2003 2004 2005 2006

United States exports China imports China exports

•Information and communication technology(Source: The Economist, November 10, 2007)


Routers to the toptelecom vendors’ equipment sales to

carriers

0 5 10 15 20 25 30

ZTE

Motorola

Huawei

Cisco Systems

Nortel

Alcatel-Lucent

Nokia Siemens Netwroks

Ericsson

(Source: The Economist, November 10, 2007)


SupernovoPC-makers’ market shares in China

02 2007, % of shipments

Dell, 8.4

Lenovo, 35.8

Others, 23.6

Tongfang, 6.8

Founder, 12

Hewlett-Packard, 13.4

Total market value: $4.7bn



Ringtone revolutionIndia’s telephone lines by type, m

0

50

100

150

200

250

300

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Wireless

Fixed-line



Boffins without borders% of firms with R&D centres in

0 10 20 30 40 50 60 70

Italy

Singapore

Germany

Canada

India

Japan

France

China

Britain

United States



What India Needs to do

• Contain population ( with draw welfare, promotion and vote)

• Withdraw subsidies• Learn & Earn• Education to create ability and morality and wisdom• Health Insurance• Old Age Homes• Education ( SETs, private colleges, varsities)• Massive Road construction; afforestation; centaur-bunding;

water-bodies; work only if people move to where they are wanted

• Private sector in Education


What India Needs to do (2)

• Massive housing construction; re-skills to farm labour as masons, carpenters, plumbers, electricians

• Political Party Regulator of India (insist to spell out what resources; what taxes on whom for every promise given), prosecute fraudster parties.

• Government as regulator; not doer, disinvest and retire debt- Rs. 125,000 cr as Interest payment

• Legislation to put ceiling on – (a) government servant expense– (b) tax as % of GSP/GDP– (c) debt as % of GDP


What India Needs to do (3)

• Massive Defence R&D : contract out• If” reserved” items can be removed from SSI;so

should reservation into government & educational institutions

• Government to get off Hindu temples& direct administration of welfare

• Ban conversion: Law to govern change of religion like change of wife / husband divorce

• End Fraud of minority colleges


Bharat Mahan

• Intellectual & spiritual ( Dharma)

• Economic (Artha) Power

• Prosperity for all (Kama)

• Military Power

• Willingness to play global role


Global View of Bharat

• Vasudhaiva kutumbakam• Aa noh bhadraah ritavo yaantu viswatah• Lokaah samasta sukhinoh bhavantu• Isaa vaasyamidam jagat,• Tyaktena bhujithaa• Maa gridhah..• Sahanaavavatu,• Sahanau bhunaktu Sahaveeryam karavaavahaih Maa vidvishaavahaiah Tejaswinaavadheetamastu• Om Santih, Santih, Santih


Dhanyawad:

Thank You

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What I Saw, Heard & Learnt About China (during my visits in 1988, 2006 & 2007) By Dr T.H. CHOWDARY...

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