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Old 12th April 2020, 13:06   #16
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

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Originally Posted by Samurai View Post
The news appears to be legit. Same news is on Japan's top English newspaper.
Oh the news is very much legitimate. It's the celebratory tone, as if people are queuing up to do business in India, that is off.

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Originally Posted by avingodb View Post
The news content and the headline of this thread are telling two different stories. Moreover, this piece in Bloomberg on the same issue is much less celebratory that one in TFIPost.
This is the correct takeaway.
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Old 12th April 2020, 13:08   #17
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

Meanwhile China is marching into India having picked up 1.75 lakh shares in HDFC. Did they create Covid 19 for world domination?, remains to be seen. Japan has done the prudent thing by exiting China. Their cheap products will harm Nations in other ways.
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Old 12th April 2020, 13:18   #18
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

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Meanwhile China is marching into India having picked up 1.75 lakh shares in HDFC.
Actually, it is 100 times more. People’s Bank of China picks up 1.75 crore shares in HDFC Ltd.

https://www.moneycontrol.com/news/bu...c-5135931.html

Last edited by Samurai : 12th April 2020 at 15:09.
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Old 12th April 2020, 17:12   #19
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Due to economies of scale, global as well as Indian corporates seek China for mass manufacturing. For example, simple things like Ceiling fan motors, mixer grinder motors and a host of other electronic items can be easily made in India, save for the volumes and cost.

Regarding Chinese companies picking up stake, well if the seller is welcoming them with open arms in exchange for money, who would not pay gladly, especially if it is a financial institution.
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Old 12th April 2020, 21:33   #20
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

What could be the alternatives to China, some suggest it could be India, Vietnam and Mexico, provided infrastructure and business ease betters in near future.


Last edited by Thermodynamics : 12th April 2020 at 21:35.
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Old 12th April 2020, 22:43   #21
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

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Meanwhile China is marching into India ..
What a beautiful roll out of their global strategy. This is just as everyone expected.

1. Spread a virus
2. Cripple economies and allow stock markets to crash
3. Step in and buy shares of good companies at low prices
4. Start an indirect control of the economy

Is India going to allow itself to become a sitting duck?
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Old 13th April 2020, 06:35   #22
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

Japan first, but I'll not be surprised to see many countries follow suit. To have higher resiliency, expect an expansion and enforcement of a list of industries deemed to be 'critical' by national governments. Companies doing business in these industries will have to expand local production and have alternate sources to procure raw material.

Such a move will help economies survive a crisis (pandemic, trade-wars, severed diplomatic ties) better.
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Old 13th April 2020, 10:21   #23
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

When we say HDFC, if I read it right, this is the mortgage company and not the Bank. We have just opened a senior citizen's account in HDFC bank and plan to move some of our savings there, will it be ok to trust an organization no less a bank after this move by Chinese investors? I know my thoughts could be preposterous but what does this forum think?

Last edited by aah78 : 14th April 2020 at 23:57. Reason: Typos, spacing fixed.
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Old 13th April 2020, 10:28   #24
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

Cross posting from another Coronavirus thread on the lockdown as the same point is being discussed there.

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Originally Posted by V.Narayan View Post
Thank you @TRR for your post number #700 in which you put things on the HDFC/PBOC share transaction in its correct perspective.

An FII (PBOC is one in the context of India) can freely buy or sell shares in a listed Indian company. They already owned 0.2%, as TRR explained, and have now bought a further 0.8%. Frankly they did nothing different from what I did as this was a great opportunity to attain a better average price. The acquisition of HDFC shares by an FII is nothing out of the ordinary. Would we have got alarmed if the acquirer had been UBS or Morgan Stanley or BNP? No investor can acquire more than 5% of a listed Indian company without publicly declaring both its holding and its intentions and after that any further acquisition of shares has to be via an open public offer. India is not a banana republic where foreigners can walk in and take over.

Let's stay away from these conspiracy theories of Chinese trying to take over or having laid out this game plan of Export the CV19--> global economic collapse --> China takes over. Too many ridiculous American videos, already out there, on this scare mongering.

On another point -- while the economic going will be tough for most nations the four large nations most likely to pull out relatively healthier will be USA, China, Japan, Germany & India. We should not under estimate the fundamental resilience, the depth and the nimbleness of the US economy. Don't be surprised if the US economy & the USD emerge stronger than ever in 9 months.
https://supchina.com/2020/04/09/more...onths-of-2020/

See above. China's economy is as vulnerable to CV-19 as anyone else. While geo-politically speaking I am no friend of China we do need to keep in mind that unlike USA China does not go around conquering other countries (Iraq), occupying them for 2 decades (Afghanistan) or bombing them back to the stone age (Vietnam).

Last edited by V.Narayan : 13th April 2020 at 10:39.
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Old 13th April 2020, 12:31   #25
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

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Having seen this first hand, versus having set up and run a business in India, I can safely wager that no one will come here for an export-oriented business. Malaysia, Vietnam, Philippines are far better bets.
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Originally Posted by vibbs View Post
Sir, you have hit the nail on head. Even with all the talk about make in India, we still have a long way to go before we can take over the mantle of world's factory. There are other countries who are better bets for export oriented business.

I can tell from my experience that China based manufacturing makes more sense economically than India. It's not that the quality from India is much better either!
Cannot be put in better words. I would call it as a bold move by Japan. I am associated with a company which has manufacturing plants in China as well as India. With mandatory government push under Make In India initiative, it is very difficult to beat Chinese costs. Our management is pushing our Global management for localization, but at best we end up with equalling chinese manufacturing cost. Only saving face is the import duty and logistics etc. which is nil as compared to large capital investment for setting up manufacturing facility in India for same components.
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Old 13th April 2020, 12:43   #26
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

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Originally Posted by ast.ggn View Post
I am associated with a company which has manufacturing plants in China as well as India. With mandatory government push under Make In India initiative, it is very difficult to beat Chinese costs. Our management is pushing our Global management for localization, but at best we end up with equalling chinese manufacturing cost. .
Sir, same experience. It is impossible to keep the costs in check (wrt Chinese) if the supply chain is global. Attempts of Localizing the supply chain very often ends up with inferior quality.

Last edited by vb-saan : 13th April 2020 at 13:13. Reason: Quoted post deleted, removing related responses. Thank you!
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Old 13th April 2020, 13:31   #27
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

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Sir, you have hit the nail on head. Even with all the talk about make in India, we still have a long way to go before we can take over the mantle of world's factory. There are other countries who are better bets for export oriented business.
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Originally Posted by v1p3r View Post
The ease of doing business in China is incredible. An entire factory can be set up fast, the government will go out of its way to help in most matters related to trade, commerce, and manufacturing. Having seen this first hand, versus having set up and run a business in India, I can safely wager that no one will come here for an export-oriented business. Malaysia, Vietnam, Philippines are far better bets.
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Originally Posted by ast.ggn View Post
Cannot be put in better words.
Thank you, Gentlemen, for saying it like it is. It is a myth we propagate of India being a low cost destination. What is lower cost in India is the salaries of the lower and mid-tier work force only. Senior work force, power, energy in all its forms, cost of capital to fund your factory/inventory are the obvious costs which are higher. The less obvious costs are the time taken up by various Govt departments on all the clearances needed. The environment babus are the new license raj. So you lose money commissioning your operations 12 to 18 months later than it would require in China or Vietnam or Malaysia or even Dubai's Jebel Ali. An even less visible cost is that your supply and sale chain linkages work less efficiently, goods get delayed, trucks are held up at rent seeking police nakas, lack of specialized warehousing, spares held up at customs etc Another item that hits you is the fluidity in interpretation of tax laws by the income tax officer in his quest to meet his targets.

Our bureaucrats are still behind times in that they see themselves as power & status extractors and not as a facilitator vis-a-vis an investor/entrepreneur. Sometimes, especially in the States the intentions of the senior bureaucrats is correct but their ability to get their departments to implement is weaker.
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Old 13th April 2020, 14:04   #28
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

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Originally Posted by V.Narayan View Post
What is lower cost in India is the salaries of the lower and mid-tier work force only. Senior work force, power, energy in all its forms, cost of capital to fund your factory/inventory are the obvious costs which are higher.
Actually, I would say that even the senior workforce in India is underpaid by global standards. If you look at similar CXOs or senior management in India, on a PPP level, their pay for the same amount of responsibility is lower.

The entire construct of global capitalism, which is what the world's economy is based on, is itself based on a labour arbitrage. Income inequality, a lack of public health, immigration, climate change, all of these are a result of decades of blissful acceptance / ignorance of this.
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Old 13th April 2020, 20:56   #29
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

The impulse to bring production back to the country is going to be on the agenda of many governments, regardless of their ability to do so. At least noises will be made. Already socialists are in the developed world are clamouring for state control over manufacture of drugs, medical supplies, medical equipment and food. Depending on what shortage emerges next, there will be demand to take over those industries too.

India may gain some and lose some. Being the largest generic drug manufacturer in the world, Indian pharma industry could face some risks. We all know the tamasha, fake news and propaganda (on both sides) surrounding HCQ. Everyone is entitled to their opinion, and a self confessed 'alternate right wing' website will see what they want to see - foreign companies lining up at Indian shores.

The Chinese takeover of world manufacturing did not happen in a day and was not a result of cost arbitrage alone. The Chinese went around the globe, armed with support from their central bank to bag contracts. A sort of massive aggressive business development exercise undertaken by a country instead of a company. South East Asian countries like Indonesia, Malaysia, Vietnam and Thailand will be equally hungry for the share of pie coming out of China. These are already export oriented economies and easier places to do business.
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Old 13th April 2020, 22:03   #30
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Re: Japan to spend $2.2 billion to get Japanese companies to exit China

Hopefully, there will be a drive to contain the sales and propagation of Chinese smartphones and apps. TikTok has the largest number of users in India. Xiaomi is the largest phone brand.

I wish the government educates people about the dangers posed by Chinese brand smartphones and apps. Your iPhone may be made in China, but the manufacturer gets around 25% of the actual price of the device. The real money goes to the brand.

It feels disheartening to see good brands like Asus, Samsung and Micromax fail in the budget segment. Xiaomi, Oppo etc are full of spywares and people don't understand the implications pf surrendering their private data to the Chinese sadly. MG Hector is in the same category.

Best wishes to these relocation efforts.
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