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good points. let's see... - Chinese companies are the only ones that can serve Chinese customers: Yum brands (KFC, McDonald) 7000 restaurants. Starbucks 1600

good points. let's see... - Chinese companies are the only ones that can serve Chinese customers: Yum brands (KFC, McDonald) 7000 restaurants. Starbucks 1600 stores in China. 7-eleven 2000 stores in China. H&M. BMW. Mercedez. Apple. Microsoft. etc. All top brands, and command a higher price point/margin than local competitors if any. Meanwhile, none of the Chinese brands can even get a foothold outside China. - Clean energy in 20 years: in 20 years, most of the Chinese rich will have already left - large migration from rural to urban: there's no jobs waiting for these rural farmers. Therefore they cannot generate value; they're merely drags on the system. In year 2016, with manual jobs being automated, a body is no longer an asset but a liability. The person would need to have the knowledge/skills to compete for global job scarcity. And Chinese citizens aren't trained in English to compete for global knowledge worker jobs.

exelius 11y ago
> Chinese companies are the only ones that can serve Chinese customers I don't agree with this; but Chinese companies are in a much better position to do so, and China is where the growth is. > Clean energy in 20 years: in 20 years, most of the Chinese rich will have already left A bit hyperbolic; but we already have a global economy. Foreign companies will continue to invest in China (both in companies and in their own projects) regardless of what the Chinese wealthy do. There are 1.2 billion people in China. Most don't brush their teeth. Think how much more toothpaste P&G could sell there if people became even moderately wealthy and more concerned about dental hygiene. > large migration from rural to urban: there's no jobs waiting for these rural farmers. As long as the Chinese government is willing to sponsor public works projects, there will always be jobs. And China is not unique in the transition from a manual labor to a knowledge labor economy: they're actually probably in a better position than most because they can benefit from explosive growth whenever they choose to. And don't forget that the Chinese population is aging rapidly: there will be more people exiting the workforce through retirement and death than new entrants into the workforce. Ensuring need and training match up is a problem, but I don't think any government has solved that one; so I wouldn't call it a huge impediment to their growth.
- sharetea 11y ago
  >I don't agree with this; No, that was your point. You said quote "nobody else is going to come in and take those customers except Chinese companies" >Foreign companies will continue to invest in China Sure they will, but it will be dramatically smaller. $850 billion a year outflow makes it so >if people became even moderately wealthy IF. These rural farmers have to compete with cheaper workforces in southeast Asia. And english speaking knowledge workers worldwide. >As long as the Chinese government is willing to sponsor public works projects The government did that already since 2008. All they got were 300% gdp/debt ratio and badly constructed roads/buildings. They can't borrow anymore money to do that, not with the carry trade unwinding and default rates going up.
  - jhedwards 11y ago
    > All they got were 300% gdp/debt ratio and badly constructed roads/buildings. This is too hyperbolic. They got airports and a large network of trains and high-speed trains. They also got the internet, electricity and smart phones all of which are still relatively new to China. The impression I got when I lived there was that the past decade has been all about developing infrastructure. Now there is a young generation growing up with more education, more technology and more opportunity than ever. China is a huge, complex country early in its development and it is hard to generalize about it.
deleted 11y ago
[deleted]
parenthesis 11y ago
Yes, Yum brands has about 7000 restaurants in China — but that's out of about 3 million restaurants in total.
- sahadeva 11y ago
  3 million? According to http://www.yum.com/investors/faqs.asp http://www.yum.com/investors/faqs.asp they have "41,000 restaurants in more than 125 countries and territories" - meaning about 17% of their stores are in China.
  - dmoy 11y ago
    I think parent means ~3 million restaurants in China, not 3 million yum yum in the world.
  - deleted 11y ago
    [deleted]
beamatronic 11y ago
>> "I have a feeling that China will surprise us" >> "And Chinese citizens aren't trained in English to compete for global knowledge worker jobs." There you go! Edit: To clarify, I am supposing that perhaps more English-speaking knowledge workers would be trained in the future.
- exelius 11y ago
  > Edit: To clarify, I am supposing that perhaps more English-speaking knowledge workers would be trained in the future. As a side effect of US immigration policy and the hot job market for knowledge workers over the last 20 years, an extremely disproportionate number of PhD candidates in science and business at US universities are Chinese nationals. So it's already happening -- and we're the ones doing it. I think China is aware that Mandarin will not become a global language of trade -- it's simply too difficult to learn. But this likely suits the government just fine as it funnels all business deals through a (relatively) small group of people who are fluent in Mandarin and another language. And given the difficulty of learning to read Mandarin as opposed to say, French or English, I suspect almost all of those people will be Chinese.
  - sharetea 11y ago
    Alot of Chinese nationals are staying put in silicon valley. ALOT.
  - ones_and_zeros 11y ago
    The immigration policy is deliberate, from a 1989 NSF memo: "A growing influx of foreign PhD's into U.S. labor markets will hold down the level of PhD salaries to the extent that foreign students are attracted to U.S. doctoral programs as a way of immigrating to the U.S.. A related point is that for this group the PhD salary premium is much higher [than it is for Americans], because it is based on BS-level pay in students' home nations versus PhD-level pay in the U.S. . " Basically the government wanted to allow more foreign students in to PhD programs to suppress PhD wages. They estimated without any policy changes, computer science Phd wages would be over 100k by the year 2000... Bottom line, the Chinese nationals in your classroom and in your office are the result of a concerted effort by the US government and the tech industry to suppress wages.
mikeg8 11y ago
I think you missed the first point... the other comment never states that only Chinese firms can serve Chinese customers at all. He/she was more in agreeance with your point about chinese firms not needing to operate outside of china because their domestic market is large enough to serve their needs. Why leave when you have a 1bn+ person market in front of you? I don't think chinese firms can't get a foothold abroad (see Huawei), it's just that they have less desire to.
- sharetea 11y ago
  he said 'nobody else is going to come in and take those customers except Chinese companies'
  - jonknee 11y ago
    And he's not far off... Yum is even spinning off its Chinese operations into a separate company that will reside entirely in China. http://www.wsj.com/articles/yum-brands-to-spin-off-china-business-1445338830 http://www.wsj.com/articles/yum-brands-to-spin-off-china-bus... Apple is the biggest success story, but that could change literally overnight. It's a big risk to have large foreign operations in China.
    - peteretep 11y ago
      The Chinese government couldn't cut off Apple at this point. The middle class are too bought in as users/owners, the rich make too much money from being suppliers, too many poor people have jobs depending on being Apple suppliers. They would have massive civil unrest.
      - sulam 11y ago
        Massive civil unrest because Apple is kicked out of China? Ummm, there wouldn't be massive civil unrest in Palo Alto if Apple was kicked out town. People buying Apple products just don't do massive civil unrest. They'd bitch on Twitter (or Weibo/etc), but riots in the streets because you can't buy an iPhone? I'm as big an Apple fan as the next guy, but that just isn't credible.
notahacker 11y ago
I'm not sure that a 7-eleven per half million Chinese people really diminishes the potential for domestic firms to grow in their continent-sized domestic market. And that's even without protectionism and ownership rules that encourage Chinese franchises of foreign companies to be 50/50 joint ventures. Think Lenovo is doing a lot better in overseas markets than Yum Brands in Chinese markets...
- tiatia 11y ago
  Most leading players in China’s CVS sector are regionally based. Currently, there is no national leader. According to UBS Investment , top CVS players in Guangzhou, Chengdu and Shenzhen have a relatively high market share. Meiyijia, the market leader in Guangdong province, accounted for more than 60% of Shenzhen’s market share and 30% in Guangzhou. Hongqi, the market leader in Sichuan province, accounted for Exhibit 8: Market leaders and respective market share in selected cities Source: UBS Investment. October 29, 2013. “Report on Chengdu Hongqi Chainstore Co., Ltd.” Chengdu 43.6% Market leader; Hongqi Beijing 23.8% Market leader; Easy Joy Shanghai 17.9% Market leader; Quik Shenzhen 61.3% Market leader; Meiyijia Guangzhou 30.0% Market leader; Meiyija Chongqing 26.6% Market leader; Chongkelong 43.6% of Chengdu’s market share. Meanwhile, the market in Chongqing, Beijing and Shanghai is somewhat fragmented - Chongkelong has a 26.6% market share in Chongqing, while Easy Joy has a 23.8% market share in Beijing; Quik has a 17.9% market share in Shanghai.
- deleted 11y ago
  [deleted]
tiatia 11y ago
Have you ever been in China? 1. KFC? McD? Yes, they have this. But they also have their own chains. That you did not hear about them, does not mean they don't exist. I actually really like the (Japanese) chain Yoshinoya here but there are enough Chinese alternatives. Starbucks? Yes, they have this. But they have their (I assume) own chains (I assume for example Holyland and 85 degree are Chinese brands). Technology? Yes, the rich kids love Apple products. But they have Haier, huawei, Hisense, Xiaomi. Your ignorance won't make this brands disappear. And if you don't want to buy them, there are billions of people and the world that will. And don't forget. "Made in Germany" was a label forced upon products by England to suggest "inferior technology". How did this turn out? Instead of Paypal they use alipay, instead of Whatsup they use the much superior WeChat. Yet, Baidu is very inferior to google. They have Alibaba and Taobao. Yes, they have their BMW, Mercedes and VW. But they also have their Chinese brands like BYD etc. They may have a recession/depression for some years but it won't stop the rise of the East. The world GDP has already shifted back to the East after it shifted to the west due to the industrual revolution. The economic future lies in the Eurasian continent with Russia/CIS, India and China. Europe has two options - associate with the US or with the Eurasian continent. The US is very eager to prevent this (e.g. TTIP). Don't forget, Chinese think very strategically and long term. The long term problems are likely different. Besides over aging (which can be seen in the West too), believe of cultural superiority. While it has it advantages not to be flooded with criminal "refugees" like Germany, the closed society in China also keeps talent out. Most superpowers (Rome, UK, USA) were very open for talent and it was easy or at least possible to become a citizen. This is a problem. Corruption? This can be fixed. But the deeper tendency to be dishonest is likely the cultural problem. Similar to Arabs, Chinese don't trust each other.
- sharetea 11y ago
  > Have you ever been in China? Yes, I've been to China. Btw, have you ever read the thread? I was responding to OP's statement 'nobody else is going to come in and take those customers except Chinese companies' > The world GDP has already shifted back to the East after it shifted to the west due to the industrual revolution. The economic future lies in the Eurasian continent with Russia/CIS, India and China. Yeah that like sounds something out of Zerohedge. You're gonna have to provide some evidence.

exelius 11y ago

> Chinese companies are the only ones that can serve Chinese customers I don't agree with this; but Chinese companies are in a much better position to do so, and China is where the growth is. > Clean energy in 20 years: in 20 years, most of the Chinese rich will have already left A bit hyperbolic; but we already have a global economy. Foreign companies will continue to invest in China (both in companies and in their own projects) regardless of what the Chinese wealthy do. There are 1.2 billion people in China. Most don't brush their teeth. Think how much more toothpaste P&G could sell there if people became even moderately wealthy and more concerned about dental hygiene. > large migration from rural to urban: there's no jobs waiting for these rural farmers. As long as the Chinese government is willing to sponsor public works projects, there will always be jobs. And China is not unique in the transition from a manual labor to a knowledge labor economy: they're actually probably in a better position than most because they can benefit from explosive growth whenever they choose to. And don't forget that the Chinese population is aging rapidly: there will be more people exiting the workforce through retirement and death than new entrants into the workforce. Ensuring need and training match up is a problem, but I don't think any government has solved that one; so I wouldn't call it a huge impediment to their growth.

sharetea 11y ago
>I don't agree with this; No, that was your point. You said quote "nobody else is going to come in and take those customers except Chinese companies" >Foreign companies will continue to invest in China Sure they will, but it will be dramatically smaller. $850 billion a year outflow makes it so >if people became even moderately wealthy IF. These rural farmers have to compete with cheaper workforces in southeast Asia. And english speaking knowledge workers worldwide. >As long as the Chinese government is willing to sponsor public works projects The government did that already since 2008. All they got were 300% gdp/debt ratio and badly constructed roads/buildings. They can't borrow anymore money to do that, not with the carry trade unwinding and default rates going up.
- jhedwards 11y ago
  > All they got were 300% gdp/debt ratio and badly constructed roads/buildings. This is too hyperbolic. They got airports and a large network of trains and high-speed trains. They also got the internet, electricity and smart phones all of which are still relatively new to China. The impression I got when I lived there was that the past decade has been all about developing infrastructure. Now there is a young generation growing up with more education, more technology and more opportunity than ever. China is a huge, complex country early in its development and it is hard to generalize about it.

deleted 11y ago

[deleted]

parenthesis 11y ago

Yes, Yum brands has about 7000 restaurants in China — but that's out of about 3 million restaurants in total.

sahadeva 11y ago
3 million? According to http://www.yum.com/investors/faqs.asp http://www.yum.com/investors/faqs.asp they have "41,000 restaurants in more than 125 countries and territories" - meaning about 17% of their stores are in China.
- dmoy 11y ago
  I think parent means ~3 million restaurants in China, not 3 million yum yum in the world.
- deleted 11y ago
  [deleted]

beamatronic 11y ago

>> "I have a feeling that China will surprise us" >> "And Chinese citizens aren't trained in English to compete for global knowledge worker jobs." There you go! Edit: To clarify, I am supposing that perhaps more English-speaking knowledge workers would be trained in the future.

exelius 11y ago
> Edit: To clarify, I am supposing that perhaps more English-speaking knowledge workers would be trained in the future. As a side effect of US immigration policy and the hot job market for knowledge workers over the last 20 years, an extremely disproportionate number of PhD candidates in science and business at US universities are Chinese nationals. So it's already happening -- and we're the ones doing it. I think China is aware that Mandarin will not become a global language of trade -- it's simply too difficult to learn. But this likely suits the government just fine as it funnels all business deals through a (relatively) small group of people who are fluent in Mandarin and another language. And given the difficulty of learning to read Mandarin as opposed to say, French or English, I suspect almost all of those people will be Chinese.
- sharetea 11y ago
  Alot of Chinese nationals are staying put in silicon valley. ALOT.
- ones_and_zeros 11y ago
  The immigration policy is deliberate, from a 1989 NSF memo: "A growing influx of foreign PhD's into U.S. labor markets will hold down the level of PhD salaries to the extent that foreign students are attracted to U.S. doctoral programs as a way of immigrating to the U.S.. A related point is that for this group the PhD salary premium is much higher [than it is for Americans], because it is based on BS-level pay in students' home nations versus PhD-level pay in the U.S. . " Basically the government wanted to allow more foreign students in to PhD programs to suppress PhD wages. They estimated without any policy changes, computer science Phd wages would be over 100k by the year 2000... Bottom line, the Chinese nationals in your classroom and in your office are the result of a concerted effort by the US government and the tech industry to suppress wages.

mikeg8 11y ago

I think you missed the first point... the other comment never states that only Chinese firms can serve Chinese customers at all. He/she was more in agreeance with your point about chinese firms not needing to operate outside of china because their domestic market is large enough to serve their needs. Why leave when you have a 1bn+ person market in front of you? I don't think chinese firms can't get a foothold abroad (see Huawei), it's just that they have less desire to.

sharetea 11y ago
he said 'nobody else is going to come in and take those customers except Chinese companies'
- jonknee 11y ago
  And he's not far off... Yum is even spinning off its Chinese operations into a separate company that will reside entirely in China. http://www.wsj.com/articles/yum-brands-to-spin-off-china-business-1445338830 http://www.wsj.com/articles/yum-brands-to-spin-off-china-bus... Apple is the biggest success story, but that could change literally overnight. It's a big risk to have large foreign operations in China.
  - peteretep 11y ago
    The Chinese government couldn't cut off Apple at this point. The middle class are too bought in as users/owners, the rich make too much money from being suppliers, too many poor people have jobs depending on being Apple suppliers. They would have massive civil unrest.
    - sulam 11y ago
      Massive civil unrest because Apple is kicked out of China? Ummm, there wouldn't be massive civil unrest in Palo Alto if Apple was kicked out town. People buying Apple products just don't do massive civil unrest. They'd bitch on Twitter (or Weibo/etc), but riots in the streets because you can't buy an iPhone? I'm as big an Apple fan as the next guy, but that just isn't credible.

notahacker 11y ago

I'm not sure that a 7-eleven per half million Chinese people really diminishes the potential for domestic firms to grow in their continent-sized domestic market. And that's even without protectionism and ownership rules that encourage Chinese franchises of foreign companies to be 50/50 joint ventures. Think Lenovo is doing a lot better in overseas markets than Yum Brands in Chinese markets...

tiatia 11y ago
Most leading players in China’s CVS sector are regionally based. Currently, there is no national leader. According to UBS Investment , top CVS players in Guangzhou, Chengdu and Shenzhen have a relatively high market share. Meiyijia, the market leader in Guangdong province, accounted for more than 60% of Shenzhen’s market share and 30% in Guangzhou. Hongqi, the market leader in Sichuan province, accounted for Exhibit 8: Market leaders and respective market share in selected cities Source: UBS Investment. October 29, 2013. “Report on Chengdu Hongqi Chainstore Co., Ltd.” Chengdu 43.6% Market leader; Hongqi Beijing 23.8% Market leader; Easy Joy Shanghai 17.9% Market leader; Quik Shenzhen 61.3% Market leader; Meiyijia Guangzhou 30.0% Market leader; Meiyija Chongqing 26.6% Market leader; Chongkelong 43.6% of Chengdu’s market share. Meanwhile, the market in Chongqing, Beijing and Shanghai is somewhat fragmented - Chongkelong has a 26.6% market share in Chongqing, while Easy Joy has a 23.8% market share in Beijing; Quik has a 17.9% market share in Shanghai.
deleted 11y ago
[deleted]

tiatia 11y ago

Have you ever been in China? 1. KFC? McD? Yes, they have this. But they also have their own chains. That you did not hear about them, does not mean they don't exist. I actually really like the (Japanese) chain Yoshinoya here but there are enough Chinese alternatives. Starbucks? Yes, they have this. But they have their (I assume) own chains (I assume for example Holyland and 85 degree are Chinese brands). Technology? Yes, the rich kids love Apple products. But they have Haier, huawei, Hisense, Xiaomi. Your ignorance won't make this brands disappear. And if you don't want to buy them, there are billions of people and the world that will. And don't forget. "Made in Germany" was a label forced upon products by England to suggest "inferior technology". How did this turn out? Instead of Paypal they use alipay, instead of Whatsup they use the much superior WeChat. Yet, Baidu is very inferior to google. They have Alibaba and Taobao. Yes, they have their BMW, Mercedes and VW. But they also have their Chinese brands like BYD etc. They may have a recession/depression for some years but it won't stop the rise of the East. The world GDP has already shifted back to the East after it shifted to the west due to the industrual revolution. The economic future lies in the Eurasian continent with Russia/CIS, India and China. Europe has two options - associate with the US or with the Eurasian continent. The US is very eager to prevent this (e.g. TTIP). Don't forget, Chinese think very strategically and long term. The long term problems are likely different. Besides over aging (which can be seen in the West too), believe of cultural superiority. While it has it advantages not to be flooded with criminal "refugees" like Germany, the closed society in China also keeps talent out. Most superpowers (Rome, UK, USA) were very open for talent and it was easy or at least possible to become a citizen. This is a problem. Corruption? This can be fixed. But the deeper tendency to be dishonest is likely the cultural problem. Similar to Arabs, Chinese don't trust each other.

sharetea 11y ago
> Have you ever been in China? Yes, I've been to China. Btw, have you ever read the thread? I was responding to OP's statement 'nobody else is going to come in and take those customers except Chinese companies' > The world GDP has already shifted back to the East after it shifted to the west due to the industrual revolution. The economic future lies in the Eurasian continent with Russia/CIS, India and China. Yeah that like sounds something out of Zerohedge. You're gonna have to provide some evidence.