Presented to undergrad students at the Rochester Institute of Technology. November 16, 2004

1. Asia – Today and
Future
Presented by
Nat Yogachandra
KEY-Zen International

2. Book Titles
Soon to be included:
Globalization and
Cultural Competency

4. AMECO Petroleum

5. Partial list of
companies/
brands
owned by
foreign
companies

6. What is the Nationality
 Headquartered in Japan
 Controlled by Renault (partly owned by the French
government
 In Mississippi, it’s a domestic car
 Symbol of British Empire
 Built by Germans - BMW
 Swedish brand
 Owned by Americans
 Symbol of British Empire
 Swedish brand
 Owned by Americans
 Subsidiary of General
motors

7. PT Cruiser – More German
or Mexico than American
Manufactured
in Mexico
Owned by the
Germans
Hondas are built in Ohio
Toyotas are built in Kentucky
Hyundais are built in Alabama

8. A WORLDLY PLANE
One- half of McDonnell Douglas Corp,’s MD-95 was built overseas
Allied Signal Halla Heavy
Fischer (Austria) Industries
Alenia (Italy) (U.S.)
Interior Environmental (Korea)
Fuselage Controls Wing
Honeywell (U.S.)
Avionics
Israel Aircraft ShinMaywa
Korean (Israel) Industries
Aerospace Landing gear (Japan)
(Korea) Horizontal Tail
Allied Signal (U.S.) BMW/Rollsroyce
Nose APIC (France)
(Britain)
Customer Avionics
Engines Auxiliary power
1997 – McDonnell merged with Boeing and renamed to 717

9. Foreign Companies
Have Control of
 Nearly all the U.S. electronics industry
 Nearly all of the photo imaging industry
 Majority of the U.S. book/magazine publishing
 Almost half of the U.S. major motion picture studios
 One of the Big 3 auto manufacturers
 Majority of the U.S. tire manufacturers
 Large segment s of the U.S. food distribution

10. American Brands – Retail
 Wal Mart in China  Microsoft
(34 stores), Korea  HP
and Japan
 DELL
 McDonalds
 Coke
 KFC
 Pepsi
 TGIF
 Intel
 Hard Rock Café  Marlboro
 Burger King  Nike
 Planet Hollywood  Eddie Bauers
 Starbucks  Apple
 Pizza Hut

11. How American Brands
Are Expanding in Asia
Software giant Microsoft enters Malaysia
Offered a shiny new PC, running Microsoft
Windows XP and other programs
Cost around $300. Monitor included
Thailand, Vietnam, Indonesia

12. The Big THREE
factors
 China has drove down the
cost of manufacturing
 Wal*Mart is driving down
the cost of retailing
and now …….
 India is driving down cost in
services

13. Impact - Asia
 Outsourcing of jobs
 Social changes
 Women are postponing their
marriages
 Birth rates are falling
 Aging Population
 China’s dominant role
 India’s Economy
 Challenges ahead

14. Customer Services
moving overseas
 Customer services are moving to India,
Philippines, China. Mexico, and Ireland.
 GE customer services calls - answered by
Indians from a small village closer to
Mumbai in India (also Nike, AMEX, BA)
 GE Capital saves up to $340 million a year
by moving tasks to India
 Toshiba – call center is in Istanbul

15. Jobs - Going, Going, Gone
2003 2007
Custom software 20% 47%
development
Software 18% 47%
maintenance
IT Documentation 13% 47%
IT telephone support 9% 40%
Remote network 3% 39%
monitoring
Software 8% 36%
reengineering
Systems 5% 25%
management
IT administration and 3% 24%
operations

16. Salary Structure
India Vs the world
IT employee cost per year
Country Cost per year
India $8,000
Canada $36,000
Ireland $28,000
China $9,600
Israel $25,000
Philippines $7,000
Ea. Europe $7,000
Russia $7,000
Mexico $7,000
South Africa $18,000

17. Some of the Biggest U.S. companies
in India
Company Purpose INDIA staff
GE capital Services Back-office work 16,000
GE’s John Welch Product R&D 1,800
Tech. Center
IBM Global Services IT Services, software 10,000
Oracle Software, services 6,000
Hewlett-Packard R&D, Services 11,000
American Express Back-office work 4,000
DELL Tech. support 3,800
Texas Instruments Chip design 900
Intel Chip design, 1,700
Software
J.P. Morgan Chase Back-office, analysis 1,200

18. Work - fraction of the price
Hourly Cost to operate a Call Center
Kansas City, Missouri = $12.47
Mumbai, India = $4.12
Kansas City, Mumbai,
Mo India
Equipment $0.39 $0.56
Labor $10.00 $1.50
Profit (mark up) $2.08 $2.06
Total cost $12.47 $4.12

19. Help Wanted –
not in this country
 Medical
 Processing insurance claims and hospital bills
 10 percent of U.S. jobs in medical transcripts have moved
to India, Pakistan, Canada and other countries
 Animation
 3-D animation special effects
 Linear and nonlinear editing
 Insurance
 Benefits administration
 Between 10,000 to 20,000 jobs – claims-adjudications jobs
have moved overseas
 Architects:
 Major firms are exporting drafting work. It is estimated a
quarter of major firms are currently exporting jobs.
(source: The Wall Street Journal)

20. Help Wanted –
not in this country
 Digitizing
 Converting text, engineering drawings, architectural designs
and maps from paper to digital format
 Desktop Publishing
 Page layout
 Advertising campaigns
 Typesetting and color separation
 Telemarketing
 Customer-service management for international banks,
software companies and credit-card companies
 Financial
 27% Planned foreign outsourcing
 61% already engaged in the activity planned to expand
outsourcing

21. Future -Outsourcing
 $1.5 billion- India’s IT enabled services
exports in 2002
 $17 billion – Forecast - India’s IT enabled
services in 2008
 By 2010
 277,000 jobs in computer science
 162,000 in business operations
 83,000 in architecture would have moved to
India and China
 By 2015
 Will generate loss of 3.3 million jobs in service
sector ($130 billion in wages)
120,000 engineers in Silicon Valley
150,000 engineers in Bangalore, India

22. In Favor of Outsourcing and
Manufacturing
 Saved U.S. consumers (mostly middle-class)$100 billion dollars
on shoes, textiles and households, since 1978
 Between 1978-2003, cheaper baby clothes helped families
$400 million
 Boeing, Ford, GM, IBM, Motorola, saved billions of dollars by
outsourcing to China
 Global competitiveness
 Focus on high technology
 Save millions
 For every dollar off-shored, U.S. economy accrues $1.12 and
$1.14 while receiving country captures just 33 cents
 The U.S. benefits comes from reduced costs(58 cents), purchases
from U.S. providers (5 cents) and repatriated earnings (4 cents)
and rest come from redeployment of labor into higher value
added jobs

23. Birth Rates Fall
Japanese Women Choose
Work Over babies
 Japanese birth rate dropped to a record low last year- an
average of 1.34 per women
 They compete with Sweden for having the oldest median
age for first time marriages. - 27 for women, 30 for men
 Women are no more called Christmas Cake, a corruption
of English language. A woman is no good after 25 th
birthday - December 25. The ideal age was 24.
 Government is offering incentives
to reverse the declining birthrate
 $47/month for the first and second child
 $94/month for each subsequent child
 Law requires private companies to

24. Love Boat Cruise –
Speed Dating and Incentives
Love Boat cruises and weekend barbecues
for bachelors
Only state-run dating agency in the world-
cupid
Campaign promotes families to have three
children – offering incentives
Tax breaks and a bonus of up to $5,100 for a
second child - Twice that for a third child

25. Divorce Asian Style
 Divorce in increasingly losing its stigma
 Divorce rate in Asia has been steadily
climbing for the past two decades
 Common practice “Chi Le Ma” (Have you
eaten?) now had turned into “Li Le
Ma” (Have you Divorced ?) in Beijing
 Nearly 70% initiated by women in China
 In Korea, a TV soap opera- “Ajumma” – a
story of a women leaving her husband is a
national hit (challenging traditional values)
 NO divorce laws in the Philippines –
discouraged by the government

26. Narita Rikon - Japan
 Japan’s divorce rate is up nearly 50 % since 1970
 Women are initiating divorces.
 One break up for every 2 minutes and 42
seconds
 ‘Narita Rikon’ (Narita Divorce) is reference to
crash land of marriages after the honey moon at
the airport
 Divorce among couples who have been married
for 20 years or more has been increasing
- 2/3rd initiated by wife
- More job opportunities
-

27. Korea
Confucius:
A woman must obey her
father before marriage
Obey her husband during
her married life
Obey her eldest son after
the death of her husband

28. Korea
 About 30% of Korean marriages end up in
divorce. Women are initiating divorces
 Teenagers are challenging age-old
customs and traditions based on
Confucius values
 In 1989, the Family Rights Law ended
most of discrimination for divorced
women, but still a struggle
 Men get a better deal
 For every two marriages registered in
2002 there was one divorce
 Office Ladies - Tea girls still serve male
workers at the office

29. Divorce in Islamic
Countries
 Divorces in most Islamic countries are initiated
by men
 Men must make a simple declaration “I divorce
you” three times, before he takes the case to
“shariah” court
 In United Arab Emirates, a wife missed a curfew
and received a message on her mobile phone,
“Why are you late ? You are divorced,”.
 16 cases in April-June 2001
 Some countries have changed the divorce
procedures, requesting men to file divorce in
court
 The divorce laws are not in favor for women in
Pakistan and many Arab nations

30. Gender Imbalance – Bride
Shortage
 China has 118 boys per 100 girls under the
age of 5
 In Hainan & Guangdong – 130 to 100
 Govt. providing Insurance to HH with daughters.
100K girls exempt from school fees
 One child policy
 Age-old custom – female infanticide in rural areas
 Sex selection clinics
 Nearly 30 million Chinese bachelor destined
to marry by 2020
 Need to look elsewhere
 Kidnapping brides from Mongolia, Tibet, Nepal reported
 Bachelors need to be socially accepted

31. Gender Imbalance – India
 929 women for every 1,000 men.
 Northern States of India: Girl-to-boy ratio is 8-to-10,
 Haryana State in India has 6-to10
 In 2001 census count of children 6 or younger, there were
927 girls for every 1,000 boys – down from 945 girls in 1991
and 962 in 1981
 “Pay 5,000 rupees now and save 500,000 rupees in
future on dowries”
 Raising a girl is like watering the neighbor’s garden
• The statistics mean there are anywhere from 20
million to 40 million “missing “women in India.

32. Gender Selection

33. Korea - Bride Shortage
 116 boys for every 100 girls
 By 2010, will face a cumulative shortage
of brides – One million women
 Match Making services- all over the
country
 Only 3/5th of ethnic Koreans live in
S.Korea
 Looking to “Yanbian Brides” in N/E China
 May look into North Korea – inter
marriages may be a good solution for

34. Surfing Internet and
watching - Satellite TV –
Increasing number of By its very nature - e-mail
women using Internet is gender neutral
 45% in Korea Women can express
 42% in Singapore
themselves better
 41% in Taiwan Express their opinion better
 40% in Japan
Satellite TV is dominating their daily life
Vietnamese cable watchers enjoy NYPD Blue and
Seinfeld
Bay Watch and Dallas - very popular in most
Asian countries in India and China

35. Aging Population
By 2015
 There will be more grand parents in Asia
(esp. in Japan, Hong Kong, Singapore) than
grand children
 For every person 65 or older, there will be 2.5
people of working age (15-64)
 China alone will have 120 million – 65 or
older (growing at 9million persons each
year)
 Implications on Pension plans
 Business opportunities (nursing homes, living
facilities)
 Japan – automatic tubs in nursing home

36. Aging Population
 Declining Man power
 Between now and 2015:
 N/E Asia – absolute size of the working populations
will decline
 Taiwan and Korea will be negligible
 Japan will be shrinking significantly
 China’s man power growth will have just turned
negative
 All man power growth will come from three
countries
Impact: Flow of immigration
5% of workforce in Singapore and Malaysia are non-citizens
Japan still refuse to accept flow of immigration (lower than ratio of 17
European nations). Throughout the 90s, fewer foreigners naturalized Vs tiny
Switzerland

37. Challenges Ahead
United Nations defines an aging society as
one in which 7% or more of the population is
65 or older
By 2015
 8-9 % in Thailand and China
 10 % in South Korea
 11% in Taiwan
 15 % in Hong Kong
 24 % in Japan

38. Graying of Asia - opportunity
 Property developers for retirement communities
 Developers of hospital-equipped retirement
condominiums
 Insurance agents for life insurance (developing
custom-made programs)
 Beauty parlors (specialized in offering new young look
for older women)
 Health care professionals (catering to medical needs)
 Travel agencies (specialized in senior citizens luxury
tours or cruises)
 Fund managers (handling retirement or pension funds)
 Cosmetic surgeons (who can help smooth wrinkles)

39. IF YOU WANT IT, you can have it.
DOUBLE EYELIDS:
By cutting open the upper eyelid
and restitching it to create a crease,
surgeons can give eyes more
definition and a more Westernized
look. $2,300
EYEBAGS:
The lower eyelid is cut open and the
small sack of fat inside is removed. A
laser is often used. $4,630
NOSE JOB The nose bridge is raised
by adding a prosthesis or a piece of
bone normally taken from the
patient's rib or thigh-bone. $3,240

40. IF YOU WANT IT, you can have it.
 BIGGER BREASTS:
Despite the cancer warnings,
breast implants remain popular
in Asia. Saline-filled envelopes
are inserted between the breast
tissue and the chest wall.
$11,100
 FULLER LIPS:
Tiny amounts of collagen are
injected into the lips to plump
them up and make them look
more sensual. $2,780 per lip

41. IF YOU WANT IT, you can have it
 BALD NO MORE:
Hair-grafting involves removing strips of
hair-bearing skin from the dense growth
at the back of the head. Tiny incisions
are then made into the bald section of
scalp. The follicle strips are woven into
the head, where they eventually take
root and grow. From $4,630
 TUMMY TUCK:

42. Asian Governments attract
senior citizens
 The Philippine Retirement Authority:
 Each settler pays $50,000 deposit, plus
$15,000 per dependent child. Right to
live in the Philippines with the deposit
returned if they leave the country
 Silver Haired Program:
 Malaysian government initiated the
“Silver-Haired Program” to attract
Japanese and Europeans over the
age of 55.

43. CHINA will be the
dominant power in Asia
BIG BROTHER
Signed a free-trade agreement ASEAN (10
countries) – 500 million people
Free trade area with 6 countries in 2010
•
Free trade area with 4 countries in 2015
World's biggest trading area: 1.7 billion consumers
$1.2 trillion two-way trade

44. China - Today
 In 2003 it accounted for one fifth of the growth in
world trade
 China is the factory floor of choice for the world’s
low-coast manufacturing
 It assembles more toys, stitches more shoes, sews
more garment than any other nation in the world
 It has become the world’s largest consumer for
electronics
 Military spending: spends $2billion annually to buy
hardware from Russia
 China will continue to emerge as a strong player in
the world economy
 By 2015, nearly half of all China’s people will live in
rural areas

45. CHINA
Huge market for automobiles
In 2004, about 5 million cars will be sold
2004 - In volume, China is bigger than Germany
2007 – Could beat Japan ( becomes second to
America)
2010 – 10-20% of total volume – General Motors
Nine top international manufacturers plan to spend
$9.7 billion between 2004 and 2007

46. Big Three Imports
from China
GM and Ford – now accepts
Chinese supplier now serves
as global “benchmark”
prices for quality and price on
certain components
During past 4 years,
133,000 jobs
disappeared
By 2010, same study
predicts a further
127,000 jobs will
disappear to China
and Mexico

47. Look I am rich
Luxury goods
 More women are buying luxury goods
 Armani plans to open 20-30 new stores by 2008
 Prada will invest $40 million in the next two
years - 15 stores
 Louis Vuitton will have 13 stores by Y/E
 Drive BMW, eat at Hard Rock café, children
wear GAP clothes, Levi jeans, digital cameras
– sign of wealth
 Each month 5 million new subscribers sign up
for mobile phone service
 300 million subscribers – largest in the world
 Nokia, Samsung, Motorola
 Motorola plans to invest more than $10billion by 2006

48. Chinese traveling
 Chinese are trading
places with Japanese
 Australia: 3.7% of
overseas visitors from
China in 2003 but in
2013, expected to
reach11.1%

49. China- Changing Life Style
 As late as 1989, six out seven newly married couples
would not have had sex before the paper work is
completed
 Now, as many as 70% of young adults in urban
areas have indulged
 Divorce rate 3% in the 1970 to 14% today
 China formally eliminated the need for employers
to sanction weddings
 Only last year the court laid out procedures –
divorced couples should split their property
(includes joint assets, stocks and bonds)
 Now Chinese women are demanding pre-nuptial
agreement and public notaries (NP) are making
roaring trade.

50. China’s Little Emperors Will Emerge
As Driving Force in 2010
Beijing Intelligence and
Capability
Kindergarten
-Violin is optional
- Golf is mandatory
- Tuition is $6,000/year
- At least 100 million -
under the age of 25 –
have been raised in
one-child households

51. Growing Pains
 In China’s 11 big cities 50,000 people die
prematurely and 400,000 people are infected by
chronic bronchitis each year because of air
pollution
 If no changes, 380,000 people will die prematurely
each year by 2010, and will rise to 550,000 people
annually by 2010
 Government is planning to reduce its reliance on
coal
 Unemployment: In 2004, China had 2.8 million
graduates from all colleges combined – double the
number two years ago
 China will produce 325,000 engineers in 2004
 Five times as many as in the U.S (decreasing since 1980)
 Salaries are falling

52. More Foreign
Investment in India
 Indian government has raised ceiling on
foreign equity in Indian Banks, from 49 to 74
percent, which was unthinkable 10 years ago
 Recently when New Delhi computerized its tax
and revenue departments, the first contract
was won by HP and Microsoft
 Coke is bottled in plants in many parts of India
with the formula protected
 IBM is planning to buy a large call centre
operations
 India has become a major trade partner for
the U.S. - $7.2billion in goods and services in
2002 double the level five years ago

53. India Today
To set up business
 In Singapore – to start a business is 8 days
 Hong Kong – 11 days
 In India – 88 days
If you want to get out of it:
 Hong Kong take one year
 Singapore – less than 7 months
 India – 11 years

54. Future Growth of India
 By 2020
 The size of its population — 1.2 billion by
2020
 47% of Indians will be between 15 and
59, compared to 35% now.
 Technologically driven economic growth
virtually dictate that India will be a rising
regional power.
Goldman, Sachs & Co projects India will
be able to sustain 7.5% annual growth
after 2005

55. Watch for Vietnam
 Asia’s best performing economy
 Grew average 7.4% per year for the past ten
years
 It raked foreign investment worth more than
8 percent of GDP in 2003
 1993 – World Bank estimated 58% population
poor – By 2002, it had fallen to 29%
 Nearly 55 percent of population is under 25
and 85% under 45 years old

56. Nearly 50
percent of
the world’s
population
lives in Asia
East Asia Today
China – 1.25 billion
Indonesia – 200 mill Southeast Asia Today
Japan – 125 mill 520 million
Other countries – 40 mill
One of the World’s largest developing South central Asia Today
country regions
(includes India, Pakistan)
1/3rd of world’s population
1,486 billion
In 2000 – 261 million living on less than $1
a day
Drop to 80 million in 2015

57. Asian Brands to Watch in the
next ten years
 LG refrigerator from Korea – (with flat panel TV
screen) niche market (changed from Lucky gold
star)- compete with GE, Whirlpool, Maytag
 HAIER – already sells at Wal-Mart, SEARS and Best
Buy (2003 revenue $9.75 billion)
 Bajaj scooters – link with Kawasaki- Japan- now sells
for $2,700 in America
 TCL Mobile Phone/TV – linked up with RCA in the
America
 Samsung
 Legend computer in China and Asia
 Hyundai

58. Asia in 2015
 FIVE Asian countries (China, Japan, India, a unified
Korea and Indonesia) will grow substantially relative
to the rest of the world. They will account for more
than 45 percent of the global product, the U.S.
about 25 percent and the European Union only 15
percent
 The GDP and military capital of China will become
relatively large (GDP will be about $11-12 trillion,
same as that of U.S.)
 Chinese economy will account quarter of the
global product, twice as that of Japan. A unified
RAND school of Policy Studies

59. Thank You