Wednesday, May 23, 2012
Could You Live Without A Mobile Phone?
Can you believe - I don’t have a mobile phone. For many years I was the man who bought the latest and greatest mobile phones – always the top end of the brands on offer, with the latest technology: the Sony Ericsson and all the iPhones up until the iPhone 4. Then, without planning to, I stopped. I had recently lost my expensive, relatively new, iPhone, and previous to that, my earlier iPhone had been stolen in Hong Kong. These were expensive losses for me, as being the first to own the latest technology often means a US$1,000 price tag.
Irrelevant of these losses, I also found owning an Apple product in China to be a hassle. They hadn't approved the product for use, and unlocking it didn’t really work. Then I find I have to link it to iTunes to get it synchronized. I don’t want iTunes. Also China had blocked unapproved phones from sending or receiving texts.
Once I was without a phone for a short while, I started thinking about all the texts I’d send or receive, of which 99 percent were utterly superfluous. Suddenly, I found myself not overdoing the announcements, and not being interrupted at my work. I began to notice how everyone else was texting, scribbling and communicating while I was doing exactly what I wanted to be doing. Reading, or writing a report, or planning strategy – not texting.
It also began to make me a better manager. Instead of micro-managing and texting to chase up small things, or even checking that something was being done (it usually was, rendering my constant texts to my staff both irritating and unneeded), I was able to step back and let my staff do their jobs. Curiously, there was no change in quality. They simply didn’t need me. That’s bad news for someone justifying their position, but good news for me. I found myself with more time. I became more relaxed.
Of course, you say, not having a mobile phone is inconvenient. You need to arrange to meet your wife, or attend a business dinner. So what’s wrong with making plans and saying “I’ll see you there at 7 o’clock?” We all used to do that. But then something happens of course. If my wife is late, she can, if seriously delayed, call the restaurant or bar and ask the staff to let me know. Not being able to so easily make changes to arrangements with me means she has to be more committed to making her deadlines. I’ve found that true of my staff as well.
In fact, all business I can just as easily conduct via E-mail, even on the road, and as I travel regularly between different countries it’s the easiest way to reach me anyhow. I haven’t been any less productive in my business communications without a phone. In fact, I would suggest the opposite – its freed up more time and stress to allow me to be more relaxed and concentrate on what I really ought to be doing.
Plus, ultimately, everyone has a mobile phone. So on the three occasions I’ve actually needed to make a call over the past 10 months, I’ve been able to borrow one.
Tuesday, January 17, 2012
The Three-Pronged Trident Strategy for Investing in Asia’s Massive Growth
This post was originally written by me for 2point6billion.com back in October last year. It got such a good response that I thought I would reprint it on my personal blog.
As Western businesses face sluggish economies, Eurozone debt, and an American election next year, beleaguered corporates need to find fast access to markets that can provide good returns for investors. Clearly, as the domestic United States recovers, and Europe continues to argue about its currency and democratic structure, the demand to develop sustainable growth in alternative arenas becomes more pressing. Wall Street remains a slavish animal, and those increasing yields need now to be gained from non-traditional markets. It’s been the case for some time now that many U.S. corporations, without their China subsidiaries contributing to bottom lines, would have otherwise been in serious trouble. However, China isn’t the only answer, although for many it may seem the most obvious.
Meanwhile, the impact China has had on emerging Asia is just as great as it has had on Western economies. What were languid, lazy backwaters 20 years ago are and have been transformed into hives of activity with a strong work ethic underpinned by a sense of “Asian values” – that if you work hard, and look after your family, you can make it. The only difference with the West being as perceived as losing its social veneer, Asian family values have now fertilized the workforce.
Rather like the European Union, but on a smaller scale, much of Asia has integrated. ASEAN comprising 10 nations, and some 593 million people, has possibly shown the way towards mutual prosperity in a manner that Europe has not. While the European Union has centralized, imposed increasing amounts of “democracy” on once independent countries, and bid all (save the stoic British) to embrace the Euro, ASEAN is decentralized save a secretariat, does not have democracy as a requirement to join, has no unified currency, yet has done away with trade barriers with countries previously at war. EU lite it may be, but ASEAN right now represents the future rather more than Europe does. Singapore, as ASEAN’s defacto financial capital, wields far more trading financial clout than Brussels.
Indeed, being at the center of Asian trade and commerce is a description that fits ASEAN well. As a body, it balances the two giants of China and India, both of which actively seek and encourage participation. Being at the center of ASEAN means being in the center of Asia, with China immediately to the northeast and India immediately to the west. While ASEAN’s population is over half a billion, China and India both chip in with about 1.3 billion each; a total market of over 3 billion people – half of the world’s population. True, not all have wealth, and a lot of poverty alleviation needs to be carried out. But of those, some 650 million can be considered middle class to local standards, and of them, some 165 million have middle class income comparable to that of Western Europe or the United States.
The approach then, for MNCs when it comes to Asia, is a three-pronged strategy. This is a typical example on how it would work:
Asian holding company – Singapore
As Hong Kong is for China, Singapore is for ASEAN – a low tax jurisdiction, with no income tax due on profits realized from trade conducted externally from Singapore. A first class global financial center, Singapore is a primary destination – not least because as a member of ASEAN in its own right, domiciliation there means participating in the free trade agreements with other ASEAN member nations plus China and India. And if your business is in any of these other nations – no income tax is payable. The Singapore dollar is also freely tradable and profits are easily repatriable elsewhere.
This management holding company would then own the following:
Manufacturing and sales – China
Either export manufacturing, or increasingly, to sell to China’s large domestic market of 250 million middle class consumers.
Manufacturing and sales – India
Almost the same deal as China, and with the same number of consumers, but with lower labor costs offset to some degree by less well-developed infrastructure.
There are minor differences to this of course, in some cases a Hong Kong company may replace the Singapore entity, but the advantages to this are really now limited to the Closer Economic Partnership Agreements (CEPA) Hong Kong has with China, but these are not applicable to newly-established businesses. Again, manufacturing could be elsewhere in ASEAN – Vietnam or Jakarta for example – however the Singapore dollar has more clout as a regional currency and financial hub.
Only some 10 years ago, it was to be China’s century. It’s increasingly apparent that it is Asia’s, and business strategies need to be developed to cater for what is, after all, a far larger, diverse and dynamic market than even China can conjure up.
As Western businesses face sluggish economies, Eurozone debt, and an American election next year, beleaguered corporates need to find fast access to markets that can provide good returns for investors. Clearly, as the domestic United States recovers, and Europe continues to argue about its currency and democratic structure, the demand to develop sustainable growth in alternative arenas becomes more pressing. Wall Street remains a slavish animal, and those increasing yields need now to be gained from non-traditional markets. It’s been the case for some time now that many U.S. corporations, without their China subsidiaries contributing to bottom lines, would have otherwise been in serious trouble. However, China isn’t the only answer, although for many it may seem the most obvious.
Meanwhile, the impact China has had on emerging Asia is just as great as it has had on Western economies. What were languid, lazy backwaters 20 years ago are and have been transformed into hives of activity with a strong work ethic underpinned by a sense of “Asian values” – that if you work hard, and look after your family, you can make it. The only difference with the West being as perceived as losing its social veneer, Asian family values have now fertilized the workforce.
Rather like the European Union, but on a smaller scale, much of Asia has integrated. ASEAN comprising 10 nations, and some 593 million people, has possibly shown the way towards mutual prosperity in a manner that Europe has not. While the European Union has centralized, imposed increasing amounts of “democracy” on once independent countries, and bid all (save the stoic British) to embrace the Euro, ASEAN is decentralized save a secretariat, does not have democracy as a requirement to join, has no unified currency, yet has done away with trade barriers with countries previously at war. EU lite it may be, but ASEAN right now represents the future rather more than Europe does. Singapore, as ASEAN’s defacto financial capital, wields far more trading financial clout than Brussels.
Indeed, being at the center of Asian trade and commerce is a description that fits ASEAN well. As a body, it balances the two giants of China and India, both of which actively seek and encourage participation. Being at the center of ASEAN means being in the center of Asia, with China immediately to the northeast and India immediately to the west. While ASEAN’s population is over half a billion, China and India both chip in with about 1.3 billion each; a total market of over 3 billion people – half of the world’s population. True, not all have wealth, and a lot of poverty alleviation needs to be carried out. But of those, some 650 million can be considered middle class to local standards, and of them, some 165 million have middle class income comparable to that of Western Europe or the United States.
The approach then, for MNCs when it comes to Asia, is a three-pronged strategy. This is a typical example on how it would work:
Asian holding company – Singapore
As Hong Kong is for China, Singapore is for ASEAN – a low tax jurisdiction, with no income tax due on profits realized from trade conducted externally from Singapore. A first class global financial center, Singapore is a primary destination – not least because as a member of ASEAN in its own right, domiciliation there means participating in the free trade agreements with other ASEAN member nations plus China and India. And if your business is in any of these other nations – no income tax is payable. The Singapore dollar is also freely tradable and profits are easily repatriable elsewhere.
This management holding company would then own the following:
Manufacturing and sales – China
Either export manufacturing, or increasingly, to sell to China’s large domestic market of 250 million middle class consumers.
Manufacturing and sales – India
Almost the same deal as China, and with the same number of consumers, but with lower labor costs offset to some degree by less well-developed infrastructure.
There are minor differences to this of course, in some cases a Hong Kong company may replace the Singapore entity, but the advantages to this are really now limited to the Closer Economic Partnership Agreements (CEPA) Hong Kong has with China, but these are not applicable to newly-established businesses. Again, manufacturing could be elsewhere in ASEAN – Vietnam or Jakarta for example – however the Singapore dollar has more clout as a regional currency and financial hub.
Only some 10 years ago, it was to be China’s century. It’s increasingly apparent that it is Asia’s, and business strategies need to be developed to cater for what is, after all, a far larger, diverse and dynamic market than even China can conjure up.
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