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][email protected]Talk @ CESS: 23 Jan 2008
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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.
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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
• Chinese Government gave 5 Acres to Sami Narayan Trust to build Akshar Dham in China
THC-CTMS S371_Jan'08 3
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
THC-CTMS S371_Jan'08 4
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)
THC-CTMS S371_Jan'08 5
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
THC-CTMS S371_Jan'08 6
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
THC-CTMS S371_Jan'08 7
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
THC-CTMS S371_Jan'08 8
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
THC-CTMS S371_Jan'08 9
The Revenue and Increasing Rate of Mobile and Date Service
THC-CTMS S371_Jan'08 10
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
THC-CTMS S371_Jan'08 11
数据来源:中国互联网络信息中心(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
THC-CTMS S371_Jan'08 12
数据来源:中国互联网络信息中心(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
THC-CTMS S371_Jan'08 13
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
THC-CTMS S371_Jan'08 14
20
31
42
50
55
2002 2003 2004 2005 2006
Investment in E-Gov in ChinaUnit of measure Billion RMB
THC-CTMS S371_Jan'08 15
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)
THC-CTMS S371_Jan'08 16
• India’s Exports of Software services in FY 2007 $ 31 bln
• China’s FY 2007 $3.59
THC-CTMS S371_Jan'08 17
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)
THC-CTMS S371_Jan'08 18
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
THC-CTMS S371_Jan'08 19
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
THC-CTMS S371_Jan'08 20
China City-scape (1)
• 1988 - (with Rajiv Gandhi) Bicycles everywhere, few cars & Cranes and Cranes
• 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
THC-CTMS S371_Jan'08 21
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!
THC-CTMS S371_Jan'08 22
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)
THC-CTMS S371_Jan'08 23
17th Congress of the Communist Party (2)
• 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 !
THC-CTMS S371_Jan'08 24
17th Congress of the Communist Party (3)
• Normalisation of relations: Russia, India, EU, UK
• Modernisation of Armed Forces– Laser-killing of Satellites – Man on the Moon
• IP Creation-HUWAI, ZTE etc.
THC-CTMS S371_Jan'08 25
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…)
THC-CTMS S371_Jan'08 26
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
THC-CTMS S371_Jan'08 27
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”
THC-CTMS S371_Jan'08 28
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
THC-CTMS S371_Jan'08 29
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
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.
THC-CTMS S371_Jan'08 35
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
THC-CTMS S371_Jan'08 36
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
THC-CTMS S371_Jan'08 37
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
THC-CTMS S371_Jan'08 38
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
THC-CTMS S371_Jan'08 39
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
THC-CTMS S371_Jan'08 40
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 ]
THC-CTMS S371_Jan'08 41
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
THC-CTMS S371_Jan'08 42
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
THC-CTMS S371_Jan'08 43
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)
THC-CTMS S371_Jan'08 44
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)
THC-CTMS S371_Jan'08 45
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)
THC-CTMS S371_Jan'08 46
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
(Source: The Economist, November 10, 2007)
THC-CTMS S371_Jan'08 47
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
(Source: The Economist, November 10, 2007)
THC-CTMS S371_Jan'08 48
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
(Source: The Economist, November 10, 2007)
THC-CTMS S371_Jan'08 49
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
THC-CTMS S371_Jan'08 50
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
THC-CTMS S371_Jan'08 51
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
THC-CTMS S371_Jan'08 52
Bharat Mahan
• Intellectual & spiritual ( Dharma)
• Economic (Artha) Power
• Prosperity for all (Kama)
• Military Power
• Willingness to play global role
THC-CTMS S371_Jan'08 53
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