12/8/2010
Global Competitive Strategies
Surviving in the Emerging Markets
China and India
Video Set: Part 1 Part 2 Part 3
China
Napoleon: “Let the Chinese Dragon Sleep”
1
12/8/2010
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 world’s total energy consumption and 15% of fresh water consumption; consumed 50% of the world’s production of cement – Within a decade will surpass both the EU and US in GDP – Under Hu Jintao CCP remains in control—all 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”
Shang Period – 13th century BC
Ming Empire 1580
2
12/8/2010
China: A Growing Economy
China: A Growing Economy
3
12/8/2010
China: A Growing Economy
Old Shenzhen
4
12/8/2010
New Shenzhen
The Chinese Dragon Awakens
Just the Facts: 1970—GDP of $106 billion; 2006—$1.6 trillion Japan, FDI (foreign direct investment) = 1.1% of GDP; China, FDI = greater than 40% In 2003 China for the first time surpassed the US and became the #1 country in FDI inflows Foreign invested enterprises (wholly foreign-owned enterprises and joint ventures) account for 70% of exports 2005 U.S. corporate revenue from China almost double revenue from Mexico
5
12/8/2010
Mass affluent Chinese consumers are concentrated in a few top cities
China’s top 14 cities are all located along the coast Top 4 cities* Next 10 cities** 100% = 85mn USD104bn populationUrban population-income concentration of top 50 cities Avg. annual income per household USD
Top 4 cities*
35%
43%
5,000
BJ
Next 10 cities**
10% 12% 4,800
SH HZ NB WZ QZ XM
Rest of 35... [continues]
Global Competitive Strategies
Surviving in the Emerging Markets
China and India
Video Set: Part 1 Part 2 Part 3
China
Napoleon: “Let the Chinese Dragon Sleep”
1
12/8/2010
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 world’s total energy consumption and 15% of fresh water consumption; consumed 50% of the world’s production of cement – Within a decade will surpass both the EU and US in GDP – Under Hu Jintao CCP remains in control—all 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”
Shang Period – 13th century BC
Ming Empire 1580
2
12/8/2010
China: A Growing Economy
China: A Growing Economy
3
12/8/2010
China: A Growing Economy
Old Shenzhen
4
12/8/2010
New Shenzhen
The Chinese Dragon Awakens
Just the Facts: 1970—GDP of $106 billion; 2006—$1.6 trillion Japan, FDI (foreign direct investment) = 1.1% of GDP; China, FDI = greater than 40% In 2003 China for the first time surpassed the US and became the #1 country in FDI inflows Foreign invested enterprises (wholly foreign-owned enterprises and joint ventures) account for 70% of exports 2005 U.S. corporate revenue from China almost double revenue from Mexico
5
12/8/2010
Mass affluent Chinese consumers are concentrated in a few top cities
China’s top 14 cities are all located along the coast Top 4 cities* Next 10 cities** 100% = 85mn USD104bn populationUrban population-income concentration of top 50 cities Avg. annual income per household USD
Top 4 cities*
35%
43%
5,000
BJ
Next 10 cities**
10% 12% 4,800
SH HZ NB WZ QZ XM
Rest of 35... [continues]
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