Start Up Loss making..is Strategic Cost Management Subject at risk

The loss-making business startup has become a trend but will not last long in the next few years. The bleeding of capital does not make sense unless the same is being taken over in consideration that the business will grow revenue from another stream of business. Well, strategic cost management seems to be the wrong subject for these loss-making Startup Business models. I request my readers to explain or rather comment their views on this type of business models which will be a threat for the Indian economy in the coming days. Does the subject of profit has changed?

Disruption against disruption will play in the coming decade. The fiasco which will be created when one disrupted company is being brought at a premium and later on another company comes to throw that Premium valued disrupted company out of the game. The collapse of the valuation of disruption will meet its end when the premium takeover will become a pain for the acquiring company.                                                                                                                                                     

The loss-making company as startup and the Private Equity investor game seems that they have learnt the subject from different planet.  If we make a quick look towards a few data we will find that the current pattern of Private Equity investments and their understanding of valuation metric forces management theories to change.

Ola doing business of Rs.2500 cr. and loss of Rs.2500 cr. Dunzo doing business of less than Rs.1 CR and loss of Rs.170 CR; Udaan doing business of Rs.12 CR and loss of Rs.338 CR. Same is story applicable to most of the other startups. Sustainable business model theory has been shattered and these type of companies how does one think to have long term career and long term business association.  These Private Equity game are beyond any management books. A more detail looks into the below data will give a broader idea about how the Unicorns are playing the game of attracting money, generating loss and attracting inflows.

This theory will not last much longer the day a new pattern of startup challenges this disruption and then makes loss-making into a really difficult business model. The theory of strategic cost management has been just torn down by these players who seem to learn the subject of valuation from a different earth. Being an ex-merchant banker it becomes quite difficult for me to understand these valuation models.

Loss-making, creating an unsustainable business model and creating short term employment with long term stable unemployment seems to be the theme of these Private Equity companies. Valuation companies will soon face more stringent rules and regulations when these models will create a massive problem for the Indian economy as well as for genuine startups.

The good quality startup will fail to attract quality resources and hence the problem in the long term will increase and will not decrease. Startups with a genuine business model for the benefit of the social benefit will face more difficulty in attracting genuine capital.

PMS-Portfolio Management services – These several start-ups have been created as a bucket where investors will invest and will get a return over the long term. The risk of failure and loss has been converted into a profit-generating model.  These investments will face hard times when the disruption against disruption will come into play and will create a massive blow to these investors. Further, this loss-making bucket clubbed in the form of AIF-Alternate Investments Fund is a significant risk for the investor. Short term, few clicks of growth does not guarantee long term sustainable returns.

The coming decade followed with 5G will create more disruption and more unique business model challenging the existing disruption. This phase will create a more stringent assessment of valuation models, rules and regulation. Indian economy is on the path of becoming a developing economy. These models of practices should be looked with efficient eagles eyes so that they don’t place brakes on Indian economic growth or attracting FDI investments or Private Equity.

The compliance and legal aspect of the merchant bankers and registered valuers need to be very careful about their business practices. These valuations might be challenged by the Indian legal system when a crisis strikes. Hence better safe than sorry.

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I AM NOT AN AGENT-NOR MUTUAL FUND SALES BUT AN INVESTMENT ADVISOR

A mutual fund or Investment advisor and platform for offering direct schemes have gone towards two different roads. We are talking about Investment advisor and not a particular product advisor like Mutual fund advisor. Yes, this is what needs to be communicated but understood or wrongly presented.

 In-country like India where even for doing Corporate Fixed Deposit the client demand for a pass back, in that place advisory for investments is a distant dream.  The fatal story of the Investment advisory profession is that today we have few 1000 who are in the real practice and that is also half-hearted since the revenue is not so much. Now please don’t start on with the names of Top 10 Investments advisor since they cannot manage Corer of Investors of India.  True advisor market is struggling and it has from both end and more from the client angle. But recently the new App-based blindfolded half-hearted models have created another mess. In this article, I have shared how the profession of Investments advisor is facing the hardships and why the numbers are low who are doing real-time practices.

Investment advisory and platform for execution are two different things. This article will throw light on the same and will highlight why and how the Investment advisor profession is getting diluted and its meaning is being tweaked.

Clients behaviour pattern is unique and the loyalty factor is price and freebies dependent.   The one plus one free concept has changed the loyalty and value proposition in many places. Most of the client prefers to do financial planning or investment decision of their own. Banks are the most trusted partner despite reading hearing about miss-selling of products where insurance is being sold as Fixed Deposit.

Investors don’t want to open up all the decision related to wealth, savings, income and their goals easily. They just want a small tip for making quick gains. Yes, that tip market is the advisory market which the clients have finally taken.

It has been found that when an investment advisor after spending hundreds of hours organizes financial advisory or planning meeting the conversion rate out of 100 participants is just 10%.  Yes, this 10% number takes a significant amount to get finally pay a fee to the financial planner. Well out of 1000 advisor only a few is able to run the show 100% dedicated fee income form, clients.  It might be easy to teach 20 students but hard to become one of the 20 and follow your own teaching.

The problem is in the design of the profession of investor advisor. Earlier it used to be called as agents, then the same name got changed into Mutual Fund Sales Person and then Mutual fund Advisor and now Investment advisor. With every name change, the quality and qualification for the profession have changed but the dignity level of the same for the client angle is same –The Agent.

Many of you may not agree with me but those who have the guts to accept the same will agree silently. The conversion of an agent to an investment advisor is a huge quantum jump but the client still is under the impression that we are the same Agent who will come to the client place, fill-up the form and spend hours giving sermons and then once the cheque is given the same agent will be searched on google as he will not be coming anymore to the client unless 6 months or a year. This is the impression of an investment advisor.

Now coming to the Direct Platforms and the Advisory market. Most of the so-called today’s platforms who are offering the direct platform is just execution platforms –route to collect database and use the same later on from the Private equity investor who has invested in those platforms.

Financial planning has been curtailed too few questions avoiding the detailed framework and then a sudden Pop up come up explaining  the asset allocation of one client. How they calculate the asset allocation based on a few questions is tricky one which the sales representative or customer care department hardly knows. The illiteracy part for deriving the risk profile properly has been hidden under a few questions under the disguise of Technology.  Then the pop up comes for investing in direct schemes and certain scheme names come up without explaining the logic for the same scheme selection coming up.

The whole concept of Investment advisory means proper financial planning and then comes the execution. But in the market, I find only execution platforms in the forms of APPs and few advisors as per SEBI records of an investment advisor. The numbers speak why professionals are reluctant to come and join the advisor practice in real-time.  Most of the advisor who is in the practising field has come up with Book Publication and another type of brand creation form where they get a regular flow of income since the client market asks for payback rather giving paycheck. This is the current truth about Investment Advisor. All clients don't pay or agree to pay a certain fee.

Now when a client who understands less gets these APPs and invest and later when those investments turn worst then the client and it investment dream is totally shattered for the next 3 years( as per my calculation).  Investment advisory cannot be done just through platforms offering products. Those platforms can be replaced with a higher level of platforms and hence the game of Private Equity behind these platforms will be never-ending. The real concept of investment advisory where proper questionnaire-based financial planning and risk profiling followed with investment review is taken into account is getting diluted.

So coming to the conclusion –the investment advisory market is still to be developed in India where the client agrees to pay a fee. The day when Fee-based advisory profession grows then we can say that Indian clients mindset has changed from the Agent concept. The industry currently is divided into platforms and platforms. The competition of the Indian Investment advisory is between Apps and platforms and not for the real benefit which is dependent on a few  Investment advisories practising the profession.

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Start Up layoff ..Impact on Society

Losing a job is not just about the loss of income. It is not having the answer to the second question that everybody asks after they've met you: "What do you do?" In a place like India where employees are already tremendously stressed (46%), and depressed and anxious (42.5%), layoffs put an additional burden on their emotional and mental health according to the research. Most workplaces in India do not have mental health policy, to take care of the well-being of employees, and almost none offer counselling services to support those who're laid off or fired.

Start-ups are an important part of the Indian economy. The dream of $5 trillion will be achieved through these start-ups hence the ecosystem of the same needs to be stronger and sustainable.  The innovation lab of India needs huge support from the government of India.  In the last decade, we have seen how start-ups have come up and created new business models and channels redefining the traditional culture. In this decade we will witness some dramatic changes coming from these start-ups where the dynamics of the game will change. Start-up creates a new society but at the same time, the current rule of the game is destroying more rather than creating opportunities.

The start-up layoff story is a big threat for the employment segment as volatility of employment creates an impact on GDP and consumption sentiments.  Yes, the point on which I want to highlight is that disruption is creating disruption within the employment market. Before we get into the subject line we need to understand the dynamics of the same so that we get a clear understanding about how to take the matter forward. Well while reading you might feel that I sound like a bureaucrat but the truth is that layoff has a significant burden on the society for a longer period of time.  

In the first two weeks of 2020 already, Walmart India let go of a third of its top executives and hotels group OYO has handed pink slips to 2,400 employees.  It has more numbers to come in the coming few months. Lime, the largest electric scooter-sharing company in the world, is laying off 14 % of its workers and exiting 12 markets, according to a report in Axios. There are many companies in the same line and this is an on-going practice of improving profits.

But start-ups business model is going to be under question in the coming days based on the way they are building business in the long term. When you have your business to be expanded and you are bust in attracting PE then you recruit a significant number of employees to scale the business. Well PE has many reasons to invest but size of the scale is the key important. This scale attracts a huge number of employees.  Temptations based model like the cashback, discount model are all the ways to scale followed with hiring a huge team to support the back end through which the business scales its size. The 1^st two levels of Funding is based on the idea of scaling the size and reaching to every corner. Bleeding of capital is the essence of the game. This is going to be a high risk game in this decade.

In this decade disruption against disruption will rule the world. Yes till now one disruption was affecting the other companies, now one disruption will disrupt other disruption. Hence the PE segment will face intense pressure for the revenue. Now the old days will be gone soon where one used to recruit huge teams and then used to lay-off. Yes, this layoff is part where profitability improvisation is being worked upon.  

After a certain level of bleeding capital why we need to cut down manpower so at the turn the company on an immediate profitable organisation.  When we run a start-up business-like hire and fire then the job market is bound to get impacted and the chain of action of economic collapse starts happening. An employed person takes up EMI and other commitments. These commitments go for a toss when the job is lost and the candidate become jobless. The mass layoff has now become a trend for the start-up business. The unplanned business model has a huge impact on society when things go for wild toss.

The start-up business model needs a makeover in its approach from day 1. The coming decade will punish those who play with human labour and the economic growth of the society.  No will like to join a start-up in the coming years with the lesson learned from poor job stability. Now please don’t confuse with performers and non-performers. That distinction and the necessary rules applicable to the same are valid but when the lay-off is to turn an organisation into profit raises many questions about the planning and governance issues.  In many cases, it has been found that as soon as the funding dries up and they are unable to pay fat pay-packets to their workforce they cut down the staff.

The social cost of layoff is so high that in many cases life is lost behind the curtain of layoff. Layoffs can create a dent in employees’ confidence and morale; causing anxiety and depression. This led to massive unrest in the society and particularly among the young generation who are the maximum employee of the start-up cult. Losing a job and then getting another one is always a negotiation game and not an easy task. The mental pressure on the family and on oneself creates a significant impact on the mind of the families. We need a policy for protecting and mass layoff just to improvise the profitability and hunger of capitalism.  The government should protect the society and the employees’ form these startup so as the exploitation of resources does not happen and the ecosystem remains unscratched.  Start-ups need to plan very meticulously about every step so that they don’t damage the ecosystem of the same. The government should penalise these start-ups for these unhealthy practices which will compel the management of these start-ups to improve the corporate governance and also business models.

The profit planning and scaling should be done with a sustainable business model and not with a roller coaster ride. PE and other sources should be utilised efficiently so as on a later death the organisation as a whole gest destroyed due to poor business strategies. The star-up cult needs a revamp towards creating a sustainable business and not to become a victim of capitalism.

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SEBI Proposal is Great Proposal

The consultation paper on the review of the Regulatory Framework for Investments Advisor (IA) by  SEBI is wonderful to step for the Investment Advisors. The consultation paper has made many things come under the proper framework. They have streamlined the fee model as well as the individual segment of offering both the verticals with a differential in between. Indian wealth managers are addressing a market with Rs 100 lakh crore ($1.5 trillion) of investible wealth, expected to double in the next five years. Hence this paper has huge significance for the Indian wealth industry.

The IFA industry needed mush support from the regulators and this paper offers the same.  Transparency on fee part improves many hurdles and fair play opportunity for the community. As the Indian economy dreams to grow to USD 5trillion the per-capita income level of India will also increase.  This will turn out to create more wealth for investment purpose.

The fee part is still not easily accepted by the retail client since the maturity of the market is still awaited. At the same time as the consultation paper state that there are complaints where IA has charged unreasonably high fees, forced clients to pay additional fees for buying weekly reports, charged extraneous fees like service fees, file handling fees apart from the advisory fees etc.  This fee structure will save guard the ones who are fair in playing their advisory roles in the industry. This will safeguard from further damage of reputation for the IA community.

The IA guidelines will need more strength and more frameworks to uplift the community and morality of the IA segment. The proposal of scrapping down the revalidation through CPE program is a wonderful step as this will bring the knowledge level of IA to new heights in the coming years.

We all know that the knowledge level of the investor has taken quantum growth through the hands of the smartphone. In the new decade, we will witness much more jump in the knowledge and investment-related matter form the client end. Hence being an IA it is a huge responsibility to be updated with new theories and concepts evolving over the time on investment advisory. This change of the revalidation process will improve the knowledge level of the advisory model and hence will create a strong foundation for the Indian economy in the coming days.

One another important part which has been covered in the segment was that all client-facing operations such as sales, service relationship managers and client relationship managers etc. by whatever name called shall be deemed to be persons associated with investment advice. This is a big makeover for the service end desk job. The qualification of IA to this vertical will help to provide better services to the advisory model.  The knowledge should not be restricted to the sales personnel but also to the one who is providing service at the back end. The point is well clear that if you do not understand the subject then you will never be able to solve the queries. The client will now get revamped service quality based on the lines of advisory.

The concept of Principal advisor wills a big boost for framing the long term structure of the vertical or organisation. The role will define the clear objectives and will lay and develop the foundation of a company matching the footsteps of the growing size of clients.

The consent part is another beautiful aspect recommended as a proposal in the paper.  The paper states that IAs to provide a document to the client detailing the terms and conditions of the investment advisory services offered to the client. IA shall ensure that neither any investment advice is rendered nor any fee is charged until consent is received from the client on the terms and conditions.

This is a wonderful step so as the client and the IA both are clear at the beginning of the show so as the further dispute doesn’t arise.  The rules as proposed are well designed keeping the huge potential growth of the industry in the coming decade. It has safeguarded the IA and IFA community and has designed a framework which is well balanced to serve and grow the industry.

The Indian economy is headed for huge growth in wealth of individual and hence the demand for IA will grow significantly. The average for Indian households, according to the 2017 report by the Tarun Ramadorai Committee on Household Finance is 84% investments in physical assets like gold and real estate. For the Indian rich, too, there have been historically a lot of investments going into physical assets. That is changing. This change will grow the demand for IA. It’s time for IFA to convert into IA

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SEBI PROPOSAL IS BEST PROPOSAL FOR INVESTMENT ADVISOR

The consultation paper on the review of Regulatory Framework for Investments Advisor (IA) by  SEBI is wonderful to step for the Investment Advisors. The consultation paper has made many things come under the proper framework. They have streamlined the fee model as well as the individual segment of offering both the verticals with a differential in between. Indian wealth managers are addressing a market with Rs 100 lakh crore ($1.5 trillion) of investible wealth, expected to double in the next five years. Hence this paper has huge significance for the Indian wealth industry.

The IFA industry needed mush support from the regulators and this paper offers the same.  Transparency on fee part improves many hurdles and fair play opportunity for the community. As the Indian economy dreams to grow to USD 5trillion the per-capita income level of India will also increase.  This will turn out to create more wealth for investment purpose.

The fee part is still not easily accepted by the retail client since the maturity of the market is still awaited. At the same time as the consultation paper state that there are complaints where IA has charged unreasonably high fees, forced clients to pay additional fees for buying weekly reports, charged extraneous fees like service fees, file handling fees apart from the advisory fees etc.  This fee structure will save guard the ones who are fair in playing their advisory roles in the industry. This will safeguard from further damage of reputation for the IA community.

The IA guidelines will need more strength and more frameworks to uplift the community and morality of the IA segment. The proposal of scrapping down the revalidation through CPE program is a wonderful step as this will bring the knowledge level of IA to new heights in the coming years.

We all know that the knowledge level of the investor has taken quantum growth through the hands of the smartphone. In the new decade, we will witness much more jump in the knowledge and investment-related matter form the client end. Hence being an IA it is a huge responsibility to be updated with new theories and concepts evolving over the time on investment advisory. This change of the revalidation process will improve the knowledge level of the advisory model and hence will create a strong foundation for the Indian economy in the coming days.

One another important part which has been covered in the segment was that all client-facing operations such as sales, service relationship managers and client relationship managers etc. by whatever name called shall be deemed to be persons associated with investment advice. This is a big makeover for the service end desk job. The qualification of IA to this vertical will help to provide better services to the advisory model.  The knowledge should not be restricted to the sales personnel but also to the one who is providing service at the back end. The point is well clear that if you do not understand the subject then you will never be able to solve the queries. The client will now get revamped service quality based on the lines of advisory.

The concept of Principal advisor wills a big boost for framing the long term structure of the vertical or organisation. The role will define the clear objectives and will lay and develop the foundation of a company matching the footsteps of the growing size of clients.

The consent part is another beautiful aspect recommended as a proposal in the paper.  The paper states that IAs to provide a document to the client detailing the terms and conditions of the investment advisory services offered to the client. IA shall ensure that neither any investment advice is rendered nor any fee is charged until consent is received from the client on the terms and conditions.

This is a wonderful step so as the client and the IA both are clear at the beginning of the show so as the further dispute doesn’t arise.  The rules as proposed are well designed keeping the huge potential growth of the industry in the coming decade. It has safeguarded the IA and IFA community and has designed a framework which is well balanced to serve and grow the industry.

The Indian economy is headed for huge growth in wealth of individual and hence the demand for IA will grow significantly. The average for Indian households, according to the 2017 report by the Tarun Ramadorai Committee on Household Finance is 84% investments in physical assets like gold and real estate. For the Indian rich, too, there have been historically a lot of investments going into physical assets. That is changing. This change will grow the demand for IA. It’s time for IFA to convert into IA

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COST MANAGEMENT PROFESSION .....AT EXISTENCE RISK SERIES 1

Every profession will change and will either exit or new dimensions will come forward.   The last several decade's rules and the new decade rules are different. We need to understand how the profession is at the doorstep of risk and where we are heading. The coming decade is a threat unless new subjects and strategies for placing within the industry are not being taken by the cost accountant profession. The time has come for the cost accountants and the subject dominance to come out of the fool’s paradise and think for the new decade and where it gets placed.  Cost management has changed radically and will very soon come to an end where different professionals will control the subject and expertise, showing the path of exit to the profession. Its time to come out of the professional development paradise.

This article raises the thought about the survival in the long term and also the value of the expertise dominance which cost accountant and cost management profession enjoyed. The article is to enlighten the thought for the betterment of the profession and not to degrade. If you take every note of the article it will help to improvise.

 Praising about a profession and placing assumption that the professional development will happen then one needs to understand that this is not 2008 neither 2015 but it is a new decade. It is very easy to say that the profession of cost management has a huge role  in USD 5 trillion GDP. Well, the following few things will change your thought and will give more clarity to the end-user.  Don’t criticize AI and IoT since they have taken control of the subjects of cost management long back and data analytics and professionals are better advisors than a new or old cost accountant. Technology has replaced the players.

One needs to think where we are heading and where the expertise of subject is moving away. Further one must understand that the lower end of the pyramid always struggle and their voice is ignored often. Professional development has been fool’s paradise and in 2020 henceforth it is next to impossible to impress through this model. The ground at the job level speaks a completely different story. In the past we have seen that whatever development has been done the current status at the lower end has only fallen rather rising above. Thanks to inflation for increasing the competition and giving a respectful salary to a new cost accountant while joining a job.

One more thing PSU are no longer going to remain PSU hence private dominance will change the rulers and current expectation in the future. Are we prepared for the same? The last several decades PSU helped us but not in the coming decades.

Artificial intelligence is helping to find the cost-benefit analysis followed with cost optimization strategy. MBA in finance and other qualified professional will be easily able to develop strategies and create cost optimization strategies. Nanotechnology and IoT has changed the rules of cost management and marginal costing of production is now next to zero. The loss-making business model in the initial days and then making a profit does not need cost audit neither cost advisory. Big data analytics and quality systems are driven by technology are advising managements about business strategy and strategic cost management. So why cost accountant and the professional expertise will be required?

Business models are no longer expensive. The cost has come down with the blessing of technology. Professional expertise has been replicated through various different courses which provide efficient training to manpower to become cost advisor.

The dream of India of USD 5 Trillion is no longer based on the low cost of production. It is dependent on the technology-driven process and strategy development. 5G itself is sufficient enough to open a million low-cost service and manufacturing business. Youtube and overseas courses through e-education model have changed the rulers of the cost management subject. Cost Accountant knowledge and expertise of cost management are no longer required where various other exceptional better sources of knowledge are available.  Various Management degrees have adopted and have trained on the practical basis of the cost management subject.

Doing data analytics and creating patterns and recruiting data scientist has changed the guards of the profession. Technology and the speed is changing the dominance of the profession on its subjects. Why a professional will be hired in the coming decade is the question to think over?

Inflation and cost of production cannot be kept low for a longer duration of time. The capitalistic mind plays the game over the decade and changes the demography of an economy.  Export is no longer the long term survival tool for any economy has been proved well in the Trade war story. Hence low-cost production and the export-driven economy is no longer going to be sole objective for India neither for any economy. Hence cost management is not required and neither the professionals.

Government of India wants growth and growth, not at low cost but based on consumption-driven on loan and capitalism. Cost is no longer hunger. Profit and higher ROI is the target where loss-making business models and Private equity are the players of the game.

Every person on the street knows about cost management and how to control. Various courses have taken away Target costing, Life cycle costing, product costing subject dominance from the profession to the Graduates and Under Graduates. Income tax and vat is no longer the property of any profession but a way of employment for the Graduates working as a consultant.

Now if the situation of the profession is at such risk then, where and how we find the place to stand in the next decade? What changes we need and how we plan to make those changes to the next level of the subject dominance? What type of practical training will be required and where we place the subject to be a pathfinder for the government of India? When ease of doing business is the competition then why several types of auditing standards and audit reports will be imposed on the various industries in the new decade?  

We spend millions on Conference and for professional development but what we are doing in real tersm for saving the same coming decade from so many challenges?

This is the 1st Series,I will come up with the 2nd series to what needs to be done and take forward the profession to the next level.

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CHINA ...TRADE WAR IS NOT THE PROBLEM IN THE COMING DECADE.

 

The global economy is going through slowdown phase but the gravity of the same will grow in the coming decade as various countries are focusing on cutting down import and in-house production.  Before I conclude this theory I would like to accentuate the depth of the problem for the Chinese economy and how the state is planning to cut down more on import and focus on domestic production. This is just the beginning of the era of the “Trade War” ripple effects on other economies policy framework. Don’t think that Trade war is resolved the problem is now going to spread like contamination to any industry based on different countries think tank.

You will be surprised to know that Chinese economic slowdown in the coming years will not be Trade war but its domestic rules and regulation which has created an immense revolt within china’s long term investments. The rules of the economic game have changed and now people are more concerned beyond bread and butter. Manipulation of data by china cannot survive the structural collapse of the economy.

What is the depth of slowdown of China is hard to measure since they have a protective policy in every activity. This is the culture of the Chinese economy but still when the pains are more in today’s technological driven world then these things cannot be hidden. China is not only heading for the massive slowdown but is struggling with consumption. Well, the consumption problem is a global problem since when the security of a job is at stake than it is bound to slow down.  I know that every economy even the Indian economy is betting aggressively on consumption theme but that is not going to work like magic wonders in the immediate basis.

The slowdown of China is an example to study how economic policies have been wrong and too much dependent on external factors rather focusing on internal factors to reduce the income inequality gaps in society. The Chinese economy is too much restricted and too much controlled which creates an atmosphere unsuitable to breathe. For example in Hong Kong, Sa Sa International the city's largest cosmetics retailer plans to shut down 20% to 25% of its stores in the next 18 months because of the city's "unabated difficult operating environment. Ease of doing opportunity is the next biggest requirement for China. There are many companies who are exiting china due to its stringent policy and control.

China is currently going through massive job cuts across industries. The unemployment rate of the consumption-and tourism-related segment rose further to a three-year high of 5.2 per-cent. In particular, the unemployment rate of the food and beverage service activities sector increased to 6.2 per-cent, the highest level in more than eight years, White colour jobs are also at stake along with blue coloured jobs. Chinese industries went for massive cut down of old industries and modernisation of new plants and machinery which has created massive lay off.

Now the situation is that trade war has led to significant slowdown on production and hence lead to poor job quality, unemployment and of wages which is common phenomena in an economic slowdown. These things might have been kept secret or rather tweaked data might have been shared in the public domain. Unemployment and society imbalances have now become a nightmare for China.

China is now desperate to get back into its feet and hence it will accept and adopt any policy whichever will save its GDP growth. The slow GDP growth has now spilt over the citizens and their living standards. China is now focussing aggressively to produce in-house Technology related gadgets so as to create employment and reduce import. The country plan to cut reliance on imports of key components to just 25%.

In 2018 the china has spent around US$320 billion to import integrated circuit products whereas the crude oil import was to the tune of US$240 billion. Well the way the 5G revolution is going to come up, the demand for chips, circuits and other technological equipment’s of Nanosize will increase and hence this is a big opportunity for many countries to create employment and focus on bridging income inequality gaps through job creation.

 Hence this industry of Chips is going to massive wealth creator and many countries will stop importing and will focus on domestic production. Now importing countries are now go-to face problem as many countries will close the door for one of the strongest everlasting industry and hence more trade war. 5G ancillary industry is a big opportunity for China to turn around in the coming decade.  China is already focusing on a massive aggressive expansion of its national manufacturing innovation centres. From 11 they plan to go up to 40 by 2025.  A quantum jump but at the same time a small burning issue which will evolve in the coming decade. The 5G related manufacturing exports are going to be the next battleground.

Now coming back to the slowdown story of china, the GDP will grow as trade deal might create some green shoots but the risk of any volatile movement in decision remains intact. China is struggling with unemployment and also now the housing price is coming down and also the production of the same as demand is now getting out the window. Average new home prices in China's 70 major cities rose 6.6% in December, slowing from a 7.1% gain in the previous month. But I find that technological knowhow fight will create more problem for the Chinese economy in the coming years.

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