My thoughts on the current economy and international relationships

President Donald Trump has recently announced that China should be warned because of COVID-19. That means President Trump is now wondering whether this entire global virus crisis could have been avoided in the first place if China took immediate action faster and reported the real situation to World Health Organization (WHO) more quickly (or at least in time). Last year (in 2019), President Donald Trump already started a tech war with China (AKA Sino-American tech cold war in which Huawei products were banned in the United States). Several months after the tech war ended, President Trump is warning China again, which makes many business professionals (including me) think. Since my Ukrainian wife and I run an international tech company which works closely with Foxconn, I’ve written down my honest thoughts on the current economy. Interestingly, many of these ideas also apply to international relationships!

Why creative thinking is very important to business, love and life in general:

Due to the tech war between the United States and China, Foxconn is thinking about moving its factories from China to other countries. Obviously, this requires a tremendous amount of creative thinking.

Truthfully, India has a well-educated and committed workforce, as evidenced by their talented engineers. Hill and Hult (2017) maintain that education is the medium through which employees learn knowledge and skills and are socialized into the norms and values of a society, and education plays a key role in the determination of national competitive advantage in terms of international business. Additionally, India is also a thriving export market in today’s day and age. Due to these advantages, both Foxconn and Wistron have iPhone factories in India already. Therefore, it can be seen that Foxconn’s operations in India will keep growing.

Yet several challenges of production in India are manifest, too. First and most importantly, lack of infrastructure in India is an issue – this will hinder the future growth of Foxconn if more factories are built in India. Then, the high rate of corruption in India is another serious problem because corruption is bad for business development. Corruption is commonplace in India because relevant legal consequences are not severe in India. Hill and Hult (2017) argue that corruption in India is more common than corruption in China. Further, there are some cultural differences that may impede business growth because the Indian culture is very different from Taiwanese culture in many ways. Lastly, although the Indian government encourages foreign companies to invest in India, there are many entry-barrier laws and regulations which limit companies’ operations right now. For example, in order to get a construction permit, a company has to go through 34 procedures which will take 196 days. It seems that the Indian system is not very efficient.

The final recommendation is a long-term business strategy, i.e. in-house manufacturing. That means Foxconn needs to invest in Tech-Man/automation (Wang & Ellis 2019). Indeed, this requires investments in entrepreneurship and innovation as well as training and skill development, yet its Return on Investment (ROI) is sustainable and long-term business success. In actuality, Foxconn’s second factory in India is partially automated. As I see it, an international relationship also requires lots of creative thinking. For instance, at the beginning of my relationship with my Ukrainian wife, we were living in two different countries. Initially, we were chatting on the Internet every day, but that was not enough for a real relationship. Therefore, we had to think outside the box – I visited Ukraine and met her in person quickly. I believe in flexibility.

Risk management in business & in an international relationship:

Relocating factories from Mainland China to India involves certain risks. First of all, the cost of shipping and logistics will increase because India’s location is less convenient than China’s location in terms of geography. The second risk is about the society and culture, i.e. India is highly corrupt and there are a lot of cultural differences between India and Taiwan (Hill &Hult 2017). Further, the infrastructure in India is not very advanced. However, these risks can be managed properly because the overall cost of running factories in India is much lower – the labor cost in India is significantly lower than the labor cost in China and the policies in India are much more beneficial currently. Therefore, the final profit is guaranteed. As to investing in Tech-Man/automation, the risk is ongoing maintenance, i.e. this technology requires constant updates which may cost money. Nevertheless, the machines do not require salaries, Employee Assistance Program (EAP counselling), Human Resources Management, supervision, and so forth; hence, Tech-Man will save money in the long term. In fact, major corporations such as Amazon have already invested in Tech-Man and that is an important reason why their businesses have become hugely successful. According to Latka (2019), the ability to copy other successful companies’ strategies is paramount, as other businesses have already tested which methods actually work – Foxconn can directly copy Amazon’s approach in this aspect and benefit from Amazon’s experience and findings. In this way, Foxconn would not need to experiment with new ways to do business and run factories in the future in this respect, thereby saving business expenses further.

Well, every relationship has some risks, and an international relationship is no exception. Frankly, it’s not about how to avoid risks; it’s literally about how to manage risks! For instance, in my relationship with my Ukrainian bride, I maximize what I’m good at, thereby minimizing the risk that we face.

The creative conclusion

Due to the tech cold war and trade war between China and the United States, Foxconn is facing a range of challenges. The situation has become more complicated because of import ban and trade sanction. Meanwhile, the labor cost in China has been increasing a lot since 2011. Consequently, the key issue is Foxconn suffers from financial loss and needs to consider relocating its factories from China to other countries. Since China does not have any promise for the future in this regard, Foxconn must address these concerns as soon as possible. Though President Donald Trump has announced the end of trade war, nobody can predict the future trend because China and the United States have political conflicts in the long run, which can cause economic instability.

Based on the above analysis, Foxconn would be well-advised to relocate its factories to other countries such as India and should consider investing in Tech-Man/automation soon.

Now let’s look at international relationships. As I see it, a long-term relationship or a marriage is not supposed to have stability at all times. Of course, a serious relationship surely has more stability than a casual relationship. But as a matter of fact, some level of instability makes you spontaneous. For example, I travel with my Ukrainian wife regularly – we explore different countries frequently. Last year I even surprised her with a flight to New Zealand! I think that’s the best way to add some fun to my marriage.

“Surprisingly, business and relationships are so similar.”