PNG - If there is little affect on China, what happens to Japan, Korea, Tiawan? : LUSENET : TimeBomb 2000 (Y2000) : One Thread


I've enjoyed seeing your thorough comments from the Asian side (Feel buttered up enough?), but would like your opinion on the eventual impact on China - as it will afect Japan, South Korea, and Taiwan.

China, I understand is a mixed bag with respect Y2K impact - very rural and backwards in many areas, very advanced (cell phones, satellites, military power) in others. Central control still, but what level computing and what level paper-pushing? If computers, what era, what software, what application programs?

Some (much perhaps) I understand is bootlegged. If so, willit (can it) get upgraded, or will it fail?

The basic date system is different: what is that effect? The embedded chips problem: not a big issue becase hand labor is more common?

If China pulls through with little disruption,what happens to Japan, if that country has severve problems?

What are your thoughts? Concerns?

-- Robert A. Cook, P.E. (Kennesaw, GA) (, October 28, 1998


How much of China's oil is imported?

-- Arnie Rimmer (, October 29, 1998.

Thanks Robert, but I'm beginning to feel like buttered toast.

Your questions are important because the financial crisis in Japan and Asia will magnify the economic impact of y2k. They are converging crises. I am convinced the long-term economic impact of the two will last longer and have a greater impact on the lives of more people than any temporary interruptions of power or services. On balance, conditions in Japan will have a greater effect on Asia than Asia has on Japan.

Japan and Asia may seem quiet to Americans and Europeans this week, but that is just an illusion. Western media coverage is based on an editor's criteria of "newsworthiness." As an example, one morning I was reading an analysis of Japanese banks and securities companies by the Japan business reporter (located in Japan) of "USA Today." Asian editions are printed daily. He was 100% confident that no major firm would fail, but losses were predictable. The headline of the Japanese newspaper in my other hand was screaming the news of the collapse of one of the companies he mentioned.

The mixture of Japan and Asia into the y2k economic recipes by Western economists and writers is underestimated, in my opinion. This is not a criticism of Ed Yourdon; however, he has no link to any Japanese web site (there just aren't any worthwhile English language sites) and he probably doesn't have time to read this forum. In addition, I believe Ed Yardini's predictions are too conservative.

I have not read much in the western press about the growing anti-American sentiment in Japan and Asia (Asia and Japan must always be considered seperately). There is a ground- swell of Japanese articles explaining in detail how U.S. hedge funds, together with major U.S. securities firms, methodically targeted and attacked Asian countries and Japanese banks. They reaped billions of dollars by manipulating currency and stock prices, together with short- selling. They intentionally destroyed currencies, markets, and complete economies. The greater the destruction, the more money they made. Tens of millions of people lost their jobs in countries that may not recover for a decade. It is being referred to as economic terrorism or warfare. The unprecedented action by the Fed to protect banks, and thereby hedge funds, from exposure to losses from the Russian meltdown is taken as tacit approval by the U.S. government. There is a growing sentiment that this was similar to a military attack. I'll stop here because this is not the forum for this...

There are two Chinas: The southern part and everywhere else. Everywhere else is like stepping 25 to 50 years back in time. The infrastructure is analog. The high-tech of the military is not that high-tech. The central government is headquartered in "everywhere else," so I don't see the government facing more than nusance problems with software that is more for convenience than critical for operation. In Beijing, for example, cell phones, and modern fitness centers are used mostly by foreign business people and government employees. Only foreigners and government employees have the money for these toys.

The rapid growth of the past 4 years in the southern area has slowed considerably this year. The influx of foreign (particularly Japanese) manufacturing facilities did not produce the profits expected. The quality problems experienced in manufacturing resulted in low productivity. Two basic reasons: First, in many cases, the government decides who will work in the factories. Workers from poor, remote areas are sent to work in a factory for 1 year. The workers return to their area to sing praise for the government for allowing them to make more money than they ever dreamed of making. The entire factory staff is replaced with another group of poor, uneducated people from other areas, to spread the political wealth of these jobs. Obviously, this cycle is a productivity killer.

Next, the two sequential generations of communist rule has created people with absolutely no concept of competition. You must physically take the workers to a store and patiently explain the connection between their quality effort and their job. As in, if we make a poor product, people will choose to buy our competitor's product, we must close the factory and you must go back to your home with no money. This is very confusing to them. Capitalism was evil, but now it's good.

These factories are relatively modern, but the production is mostly simple mechanical parts fabrication and hand assembly of commodity goods. The enterprise systems of the joint - venture foreign companies are not impossible to remediate, if necessary. Main frame software isn't pirated so that isn't an issue. Many are English versions so special language considerations are not necessary for remidiation. Enterprise systems don't make or break a manufacturing company immediately. Manufacturers manufacture. The 3 M's still apply - If they can get Material, Manufacture the product and collect their Money - they can figure ways to do the reporting.

The growth of PC's has been strong the last 2 years. Intel generates probably 10% of it's sales from China (my estimate - total of Asia. less Japan, is about 20% - per Intel). Sure, substantial PC software is pirated in China and Asia. The easiest way to get pirated Microsoft Office or Windows 95 / 98 is to ask U.S. Navy personnel. The enlisted people buy them in Thailand and Hong Kong and pass them around. The officers just pirate the CDs from their office and install it at home.

The Chinese calendar is not that different for the year field. For example, January 1, 2000 equals November 25, 1999 in the Chinese Lunar calendar. The Chinese calendar really isn't used much by businesses that use IT, anyway. Just like Japan, the calender conversion is a simple interface program.

Embedded systems remediation in factories should be less of a problem in China because most of the systems are only a few years old - for the factories using advanced automation.

Energy: China uses about 75% coal, 18% petroleum, 5% hydro... Net imports are only about 500,000 barrels per day (that's about 10% of Japan's oil import and 5% of America's oil imports).

I was going to post this in another thread this morning, but I'll do it here instead.

I will present this data with no opinion, analysis or conjecture. You may draw your own conclusions. As of November1, 1998, the following is the status of one company:

Parent Company Employees: Over 150,000 worldwide (less than 50% Japanese) Subsidiary Companies: over 300 Company - Number of Employees: Over 15,000 worldwide (less than 50% Japanese) Company Factories: Over10 (less than 50% in Japan)

Factory Automation Remediation of One Japanese Factory

Total Number of Automated Manufacturing Systems: 44 (24 similar machines and 20 other automated assembly systems)

Start Date: January, 1998

24 similar machines remediated by manufacturer (manufacturer is also a subsidiary of Parent Company) Completion Date: June, 1998. (on schedule)

10 automation systems to be replaced in lieu of remediation - scheduled for delivery March, 1999. Minimum one month of installation and set-up required after delivery

Scheduled completion date for remaining10 systems under remediation- Unknown. Remediation team will only commit to 1999

Best possible completion date (including replacement systems): April, 1999

Best possible total remediation time: 16 months

Status of Other Factories

As of November1, 1998: No other factory has begun remediation of factory automation systems

-- PNG (, October 31, 1998.

Excellent report, thorough and complete.

See, now I get to butter the other side of your slice of bread...if it ever falls off the counter top, it spin in midair - neither side able to hit the floor without the other landing face up.

The last section on remediation is also interesting - it's like what they've (in all areas) have found here. Notice that they started relatively early, they are still working, they found more problems than expected, solved a large number of critical parts to the whole system, are not quite done yet, have to be a lttle cautious about saying "we are finished with everything..." and cannot give a specific "finish" date to complete the final 5%-10% of the system.

Notice also, that like here, nobody, (no manager, no tehnician, no programmer, no user) has said "It was not needed. This was a waste of time. We should have soemthing else. It was not a problem."

On worst case worries are comfirmed - they (militarily/government-wide) will not be thrown completely down by losing services they never had. On the other hand, they also will be no stronger, nor nor more capable.

But if an industrialized opponent is weaker ... and isolated by herself off the coast ... with major allies also weakened.

-- Robert A. Cook, P.E. (Kennesaw, GA) (, November 01, 1998.


Your Sunday evening is my Monday morning in Japan. It's 5:30 AM and I've got a splitting headache again after reading the last two lines of what I wrote.

The economy of the U.S. is going to be in shambles when these factories can't produce components to send to American subsidiary assembly plants to distribute to American stores by American trucks. The effects are far reaching. Ever take an inventory of Japanese brand name (and Japanese OEM) products in your home and office?

It is staggering how many American jobs are in the supply and support chain for these products.

-- PNG (, November 01, 1998.

Too bad the solutions for Y2Splitting headaches isn't "Take two years off and call me in the morning..."

Our Korean contracts are giving admin. and finance problems here already - late, slow, delayed payments, poor feedback, etc.

-- Robert A. Cook, P.E. (Kennesaw, GA) (, November 01, 1998.

Thank-you for the reports, PNG. I hope your headache is better. I am really sorry to hear about the anti-American sentiment. Most of us don't get any say so about those things being done which hurt the people of Japan. I imagine you know that already, though. Wish they did. I have said for a long time that the economy would "get" us before Y2K. I guess time will tell.

-- Gayla Dunbar (, November 01, 1998.

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