If china chooses to unfreeze its currency, how it would be beneficial to India and other emerging markets?

If china chooses to unfreeze its currency, how it would be beneficial to India and other emerging markets?
 
United states and other leading countries have been accusing China for freezing its currency to let export boom continue and strengthen its economy at the cost of jobs in developed economies. China chose to freeze its currency as part of its economic strategies that would support more and more exports from the country and continue to take a big pie of the exports market all over the world.
 
Watching the success of China, India and other emerging nations have been applying the similar approach to create jobs by developing export oriented market. India is considered back office of the world, but similarly it also owns cheap labor resources due to favorable exchange rates. India has been trying to establish world class infrastructure in place to attract more export. India’s political scenario and decision making did not help it to compete with china.
 
There could be couple of scenarios if China unfreezes the exchange rates:
China to maintain export boom:
Currently China’s per capita income per day in those export led factories are $1.00 and due to favorable exchange rates it helps the Chinese people to maintain decent life. While US and other developed nations pay almost $7.00 an hour for labor jobs. However even if due to freely traded Yuan, if Yuan appreciates 40-50%, it will make the same china job pays approximately $2.00 a day, which is still quite less as compared to what US and other developed countries pay. The end result would be China is still maintaining the export boom and US will continue to import from China. And since increased exchange rates would make US goods more expensive. So it would be a setback for US.
 
India and emerging nations gains market share:
If china and export led businesses find better places to manufacture the goods and export it to developed economies, it would provide a proxy to China. India, Bangladesh, Sri Lanka, Vietnam, Myanmar and other Asian nations can fill the gap by providing the manufacturing at cheap rates. However, the shift of exports from China to other countries is not going to help US or any other developed nations to save jobs. The already started battle to maintain competitiveness across organizations will find alternative destinations to produce cheaper goods and services.
 
 
However, there will be advantages to other emerging nations as they will share a pie of the export boom and similarly to US and other nations multinational firms to gain more business from more countries.
 
 

India story is unfolding!

Oil and petro-chemicals giant, Reliance Industries, are entering retail business in India. Bharti Airtel, India’s largest telecom firm that covers almost 23 percent market share, wants to enter retail business partnering with US based Wal-Mart. Wipro chairman, Azim Premji’ takes over south India based retail chain Subhiksha.

Retail business tycoon, Kishor Biyani, led Future Group launched their first retail store, Big Bazaar, in 2001 in Bangalore and in another 8 years they are operating more than 100 more stores across metro, tier-1 and tier-2 cities. Apart Future group also created other brands on the success of Big Bazaar like Pantaloons, Bijli Ghar, Food Bazaar, City Centrals exclusive brand showrooms, creating a 1000cr group with interests in manufacturing to retail value chain targeting every class of consumers in India, whose GDP growth has been increasing at a hefty pace of 8-9%.

One might wonder why all of a sudden there is so much interest of all the premier businessmen to enter the retail business?

See some of the numbers below:
910M - Total indian population in 2000
1.1B - Total Indian population (Times of India) in 2008
India's population is growing at a very rapid pace. Currently India in second most populated country with 1.1B numbers, just behind China's 1.25B, but India's population growth is uncontrollable, while china has controlled it to a great extent. As per estimates, India will be largest populated country by 2030 with 1.45B population.

10M - Indian know/speak English in 2000
100M - Indian know/speak English in 2007 -- as compared to 300M of USA and ~200M of European union - This number is growing very fast because India is producing 100K engineers every year from engineering colleges with engineering degree in English - This number gives good comfort factor to all the software and back-office firms that enough resources are available in India at one forth or one tenth cost that in US of A.
~10M - Indians are employed in Software or back-office industry. (per NASSCOM reports)

India has a demographic advantage of 100M English speaking population, vast population, comparatively cheap labor and favorable exchange rates for attracting good jobs in Back Office processing, Software Outsourcing, Research projects.

Since these sectors are providing good job opportunities, there are other sectors feeding up the demand for them. Due to getting good job and better salary standards, these persons employed in other sectors are also getting good opportunities around, with decent life, with better diet, more food options and better vehicle, better residence and year-end trip to Europe/Switzerland, cinema every alternate weekends. The decent lifestyle generated the demand in other sectors like Real-Estate, Restaurants, Hotels, Airline, Vacation Home and Trips, Theaters, Movies, Auto and many more creating better jobs for another almost 50M people in the country.

$1100 - Per-capita income in 2002
$2000 - Per-capita income in 2007
India's 1.1Billion population is generating very good demand for consumption story. If everyone spends 10% of one's income on staple foods, the whole numbers across the India's booming economy are really big. Due better opportunities arising in almost every sector, per-capita income is raising very fast, providing great opportunities in retail sector. Till 2004, India's retail was largely based on family owned small shops, mega-stores created have good opportunity to take up the opportunity and serve the biggest population.

India's retail story is unfolding, and providing enough growth for India story.

Winter Olympics: Opportunities for India

Winter Olympics at Vancouver, Canada is just over. Lots of participants participated the biggest winter sports event all around the countries. I could not find any single athlete from India. Are there no athletes to compete at international stage or there is no infrastructure to develop such sportsmen?

I was just going through some possibilities of acquiring skills for winter sports, but hardly found that there is only a ski-ring available in Manali, Himachalpradesh and couple of ski-treks in himalayas. I have observed developed country citizens spend much time and energy on their child's future. When the children are very young their parents regularly take deep interest in shaping their possible careers.

In India, winter sports related facilities are not available, but however many parents must have aspired that their child be sports-persons for such sports, but due to lack of such services they can not realize their goals. Ski-treks can not be created as they are natural gift to the nations in northern hemisphere, but however in-house winter sports complexes can be created. In India the temperature largely varies from 0'C to 40'C in northern part and 5'C to 45'C in southern India. Can't there be any technology to develop ski-rings in such areas and maintained within required temperature range? An example, In mumbai, India's largest city and financial capital, the temperature remain in mid 20s all round the year, while temperature in Northern India and New Delhi, India's capital, remains 0-15'C in winter months, that is almost same as some cities in US, and if such innovative technology helps it helps so many citizens to realize their child's dreams and one more nation to compete on international winter events.

6th Indo-US Economic Summit in Feb, 2010 in New Delhi

Indo-US Economic Summit is to be held by IACC on 16-17th February, 2010 at Hotel Lalit, New Delhi. Primary theme of the event is “Synergizing partnerships for growth” and key areas to focus are as below:

* Energy Security
* Education
* Aerospace and aviation
* Services exports
* Knowledge based manufacturing
* Infrastructure development
* Bollywood to hollywood


More details about the event can be retrieved from http://www.indoussummit.com/

iPAD effects, new opportunities

Apple is famous for launching different from generic products in the market and gain from it. It has proved by phenomenal success from iPOD in 2001, iTunes in 2003, iPhone(& iTouch) in 2007 and recently it launched much awaited iPAD on their keynote series on 27th Jan 2010. Since the launch of the product there has been lot of hues and cries about the product, so one question comes in my mind, will iPAD be able to enjoy the phenomenal success, other apple products have enjoyed? Will it be able to define a new market again?

As discussed by critics, iPAD is nothing but an enlarged version of iTouch with iBooks application with several options for broadband connection. Apple's primary intention is to redefine a new market for digitization of books that has been captured by Amazon's Kindle to some extent and leveraging its existing iTouch framework. While iPAD will give more freedom towards using the product as a digital book reader apart from the regular iTouch/iPhone functions where one can check mails, browse internet, play games and enjoy 1 Million + iPhone applications.

One question arises in my analyzing mind, if one person already owns iPhone and has 3G connection, is it wise to get an iPAD with 3G connection?, Can't Apple come up with connectivity bluetooth/wired connections that can be used to leverage the existing 3G connection. It will certainly not affordable for any person in generic income group to have two 3G connections and affects sky-rocket the monthly telephone bills by just newly launched internet products in the market. No doubt the product will certainly create a new market, different from a internet phone and laptops, and its ability to access internet more better and convenient way, redefine digital books market.

While Apple is renegotiating contracts from publishers for selling e-books $12-$15, Amazon is certainly feeling heat from the publishers to renew the contracts and raise the e-book prices from $9.99. How it will affect the Kindle's market share?, Though Kindle has captured good amount of market, it is still contributing only 2% on topline of the AtoZ, the internet bellwether, so it will be very minimal effect on Amazon's revenues. But if Amazon is able to negotiate a new deal with existing established players to launch a similar product, it would be able sail the new market with better market-share, revenues and a completely new business. Say Microsoft is able to make a deal with Amazon to launch a similar product, it would be a win-win situation for both the firms, giving a new market share to Kindle and creating new opportunities for Microsoft in book reader, tablet market share and unknown advantages on solidifying its Zune developer's network, Microsoft application's store and many more hidden new opportunities to compete in iPOD/iPhone market-share.

Google is rumoured to launch a brand new iTablet in coming months to compete with iPAD, though it is facing certain legal hurdles from book publishers for their google books store.

Anyways, product reviews and competitor's actions will certainly tell the future of newly created market, so waiting and watching the new game, till a product is launched that satisfies my requirements to buy it .....

-Amit

Analyzing correct way: Median vs. Average

I have been reading from research reports and leading business newspaper daily's about XYZ banks average salary is 650K leading the 2nd best bank on wall street with 275K. It always amuses me why the reporting agencies and newspaper report average salaries and question my mind:
- what significance does it represent.
- is average salary more important or should it be median salary?
- does average salary mean higher standard of living for all employees of the firm or atleast 50% of the firm employees?

Let me put down some points as below:

Consider the following scenario.
A company has 100 employees each earning in the range of 90K to 110K with average salary of 100K, now the company does amazingly good while coming out of the recession and offers 20% bonus to each employee along with 100M of bonus to the CEO for the extraordinary efforts and his wisdom. XYZ company's Nth year average salary is 100K while in the N+1st year the average salary goes upto 1.1M. Amazingly the firm gets into reports and newspaper everywhere about the generous pays the company offers. While the 99 employees of the firm are still earning in the range of 110K to 130K only based on 20% "generous" bonus offered by the firm and their lifesyle does not change much because of 20% bonus.

Facts:
Many of the investment banks and partnership firms pays are highly dependent on the year-end bonuses. In partnership firms, the bonuses many-a-times exceed the base salaries. And generally a firm holds ~1-2% of the total employees as partners and these partners earn major chunk of the firm's profits. So, taking an average as calculation in salary standards does not help to measure or analyze the living standards of the employees. Though it can give good analysis point for how good the firm's businesses doing.

Analysis:
The average of the firm's salary falls 1.1M, almost 1000% rise over last year's average salary of 100K. 1.1M is average salary, but it does not signify what is the take-home salary for most of the firm's employees.

if we take median into consideration for computing the salary then it was 100K in Nth year while in N+1st year it increased upto 120K based on 20% bonus paid by the firm, and it shows 20% year-over-year growth. These numbers gives us some form of understanding about salary perspective.

Similarly, as an entirely different point of view average of 90% or 95% would give us different and more meaningful results than the results by average. As in the mentioned scenario, average of 90% and average of 95% would give us 120K in N+1st year and it co-relates that of the median. The average of 90% and average of 95% of terminology is widely used across technology for analyzing different

So what are the scenarios average does not help us analyzing the outcome?
- where distribution is very high(in the given scenario, only 1 person is earning 100M while rest all the employees are earning 110K to 130K, so 99% of employees earn in the range of 110K to 130K, or average 120K)

Anyways, users are can put down more points to clear the distinction between average and median in practical usage terms.

-Amit