Saturday, December 9, 2017

Book review: Hit Refresh

Can elephants dance? Satya Nadella, only the 3rd CEO in Microsoft’s history certainly thinks so, as he narrates the story of how he is trying to inject new life into Microsoft’s soul.

Once nearly synonymous with personal computing, Microsoft lost its mojo in the last decade as mobile phones literally gatecrashed into our lives and became the primary channel to access everything from music to internet. Many had written off Microsoft at this stage, but Satya narrates how he is breathing new life into the company, changing attitudes and bringing in new paradigms.

Microsoft, is changing, and making the world an even better place for us

The book starts on a personal note as the author traces his origins from childhood in the small towns of India to his entry into Microsoft headquarters in Seattle in the early 1990s and his eventual rise to the top in 2014. The author is modest in often acknowledging the role of luck in his success, pointing out how he always found himself at the right place at the right time. Son of a civil servant, the author narrates his fascination for cricket and early leadership lessons he took from the game. There are stories from the ups & downs in his personal life, like meeting the love of his life, and the trying circumstances surrounding the birth of the first child. 

This is a book about transformation, one that is taking place within him and also within the company. What was the situation at Microsoft when Satya took over? What did he inherit? And what is it that he wants to change? Trying to bring about culture change in such a big organization is not easy, it is a painfully slow grind but the author’s efforts have slowly started showing results. There is now a renewed growth mindset. Several key events and decisions, such as the launch of Windows 10, learnings from the Nokia acquisition and corporate dispute with Samsung etc. are described, giving an insight into the author’s personality and working style. The author shows how his seemingly unconventional decisions to partner arch-rivals such as Apple or Google have paid off. Surprisingly, even in this dispassionate world of coding and corporate strategy, Empathy keeps repeating itself.

And thankfully, the book doesn’t end here!

In the latter sections, the author takes a deep dive into technologies of the future, and how Microsoft is “trying to imagine a better future for everyone”. It is this that I liked the most. The author writes about three things Microsoft is betting on – Mixed Reality, Artificial Intelligence and Quantum Computing. What are they? What can they do? And where are we – the human race - heading? These are topics not just for the geeks. The author shows how these technologies will become essential tools in everything we do – from education to medicine, or help us fight cancer or global warming. Going beyond pure computing, technologies of the future will not only help us see, hear and analyze, but also “make us feel”. Does this mean machines will eventually ‘take over’ - as some fear? Or will they only augment human capabilities to make this world an even better place for all of us? It is this ‘Human vs. Machines’ OR ‘Human + Machines’ debate that is currently the rage the world over, and the author assures us there is nothing to fear from the future.

In recent times, the growth of technology has also thrown up difficult issues surrounding privacy, security and free speech. The author discusses delicate issues such as privacy of user data and government surveillance, the dilemma between privacy vs. security, individual freedom and liberty vs. public safety. The author rues that laws always lag technological changes, causing friction between Regulation and the Corporation. The role of companies in modern society is also discussed.

As they say, ultimately the best way to predict the future is to invent it. And that is what Microsoft is doing. 

Do give this book a read – it did change my perception of Microsoft, and our future - for the better.

Sunday, December 3, 2017

Book review: How Google Works

What makes Google the company that it is? How can a company come to play so important a role in our lives in so little a time? “How Google Works” is a remarkable revelation of the secret sauce that the company is made of. Written by Eric Schmidt and Jonathan Rosenberg – two Google veterans – the book gives an inside view of how Google has created an operating model that is so successful. Schmidt was the Google CEO during its crucial formative years from 2001 to 2011 and is presently its Executive Chairman (of Alphabet). Jonathan was the Head of Products and oversaw Google’s blockbuster products Google Search, Google Ads, Gmail, Android, Chrome etc. during the period.

Google has created an operating model that is impossible to replicate

Written in simple language and lucid style, the book narrates how Google has turned conventional wisdom of corporate management upside down while delivering remarkable results. Issues such as corporate culture, strategy & planning, hiring practices, decision making and communications are explained in detail. Through stories and anecdotes, the book brings alive the company in front of the reader. What can you say about a company which believes ‘processes are bad’, you should ‘fail quickly if you want to’, ‘a top priority should be offices should be crowded’ or ‘messiness is usually a good sign’? The authors’ views on key corporate issues such as team sizes, compensation systems, meeting rules, rules for e-mails etc. will provide useful insights to modern day managers.

The roots for Google’s success are sowed right from when an employee is recruited. There is tremendous emphasis on recruiting the right person. As the authors say, interviewing is one of the most important skills that managers need to have. The urgency of the role isn’t sufficiently important to compromise for quality on hiring. Google wants candidates who have “comfort with ambiguity, bias to action and collaborative nature”. The section on interviewing is the one I liked the most.

It was also interesting to see Google’s emphasis on product excellence, user focus and on issues such as integrity. “Selling a thing to a customer she doesn’t need or doesn’t benefit from” is an integrity issue at Google and is ‘…against the basic interest of the company’. I am sure this will make many a sales and marketing managers squirm!

A key challenge for Google over the years has been to retain that start-up culture while it achieves scale. How does Google manage that? As the authors say at the beginning, “…the only way to succeed in business in the 21st century is to create great products, and the only way to do that is to attract smart creatives and put them in an environment where they can succeed at scale. …In a large company it becomes more and more difficult to create that environment…forces in a large company can actively conspire against those…who are trying to do something different”. It is these forces that Google has successfully conquered. 

For managers, HR professionals and all corporate watchers in general, this book is a ‘must read’.

Saturday, December 2, 2017

Book review: The Inevitable

What comes to your mind someone says ‘technologies of the future’? Think blockchain, driverless cars, Artificial Intelligence, 3-D printing, drones…. I recently happened to read “the Inevitable” by Kevin Kelly, a futurist and the Founding Editor of the Wired magazine. The sub-title of this book said “Understanding the 12 technological forces that will shape our future”. This is a review of the same. A more concise review has been put up on the Amazon website.

When I picked up this book, I was expecting a deep dive – or at least a comprehensive introduction to technologies (not specifically the ones mentioned above but whatever else) the esteemed author thinks will come to shape our future. However, that was not to be.

The book revolves around what I may loosely call for want of a better term, the ‘Internet–AI–Cloud–Analytics complex’ and various things that are being achieved combining these. The “12 trends” that the author talks about are different manifestations of using the same: 

1. Becoming – a process of constantly changing, evolving, improving

2. Cognifying – How AI is being injected into everything around us 

3. Flowing – Everything is information, copied multiple times and flowing seamlessly around the world over the internet 

4. Screening – More and more screens will enter our lives – from digital books to VR goggles to living room and building walls etc. 

5. Accessing – Access will become more important than possession or ownership 

6. Sharing – Open source software, social media collaboration, aggregator sites, crowd funding etc.

7. Filtering – Since there is an abundance of everything (information age), it will all need to be filtered 

8. Remixing – Mixing multiple elements of different media to create new things, findability, rewindability etc. 

9. Interacting – VR, and one step beyond it to Augmented Reality (AR) 

10. Tracking – From intelligent devices tracking our body to “lifestreaming”, “lifelogging” etc. End of privacy. 

11. Questioning – the most unlikely things will happen and we will need to constantly keep questioning 

12. Beginning – the changes which are on our way are so mindboggling that we are beginning anew

These one liners do not do full justice to the depth to which the author has gone, but I wanted to give a glimpse of what really the author means by technology “trends” and how they differ from technologies or specific technology developments. 

Indeed what the Google-Facebook-Netflix-Amazons of the world are doing is quite remarkable. But beyond a point, the 12 trends appear to be a regurgitation of the same underlying technological capability. The book keeps coming back to the same names again and again, at times making it difficult to distinguish one chapter from another. 

To be sure, there is nothing wrong in what the author has written, but this is not what I was expecting. On the whole, a bit of a disappointment.

Saturday, March 25, 2017

Leaked! Secret letter from Narendra Modi to Rahul Gandhi after the recent elections

A secret letter written by PM Narendra Modi to Congress VP Rahul Gandhi soon after the recent five state elections has been leaked online. Here is the full text of the letter:

13th March 2017

Dear Rahul ji,

The elections are over, and they have gone largely as per plan. Your efforts were invaluable in Uttar Pradesh. Akhilesh beta never realized that "Hand" is used to stop a "Bicycle", not to accelerate it ! But he is still young, will learn over time. In fact your efforts in U.P. were so effective that there was also a strong rub-off on neighboring Uttarakhand. A big thank you for this! We are also very happy with what happened in Manipur, where we were a big Zero just five years ago! There was a slight problem in Goa, but I admit it was all our own fault. Parrikar ji was not there, and our people were busy fighting amongst themselves. However we have fixed that problem now, so don’t worry. Meanwhile, you are free to imagine that it is the Congress who won the mandate in Goa and Manipur. Victory - after all - is just a state of mind.

We are however not at all happy with what happened in Punjab. This is a serious matter. You should have campaigned more vigorously in Punjab instead of leaving everything to Amarinder Singh ji. It seems you were focused only on Uttar Pradesh. This is sheer negligence. Because of this, deadlines for Project “Congress-mukt Bharat” will now have to be pushed forward to 2022. But it is okay this one last time, we are letting you off with just a warning.

You are now free to resume your foreign holiday. This is a good time to visit Bangkok. It always is! You can plan for a visit to Europe too, but don’t, even by mistake, go to the U.S.! I hope you remember what happened in 2001? Luckily Atalji was able to help you that time, but this time we may not be able to do anything. Trump Uncle is very strict. He may suspect you are there to sell kitchen utensils, Made in Jaunpur, of course. So please take care.

And yes, don’t forget to return for Karnataka elections next year.

Happy holidays!

Warm Regards,

Narendra Modi

Sunday, March 12, 2017

What we learn from recent elections in India

In an extraordinary move one fine evening in November last year, Prime Minister Narendra Modi announced sudden withdrawal of 86% of India’s currency in circulation, in what he termed as a crackdown on black money. In a predominantly cash based economy like India, it was an unprecedented move and has no parallel anywhere in the world. While the last word on “notebandi” has not been said yet, several elections – both local bodies and states - since then confirm voters have not been averse to the action. This is in sharp contrast to what was shown incessantly on electronic media during those eventful days of acute currency shortages. Besides a verdict on demonetization, here are some takeaways from recent elections in the country not just in the five states that went to polls last month, but elsewhere as well.

Democracy is flourishing in India as voters demand performance & accountability
The mainstream media has no touch with reality. I wonder how they justify the crores they get as salary. For example, the sheer scale of BJP’s election victory in Uttar Pradesh is mindboggling. Yet, throughout the election campaign, the media painted a picture of a keen contest between the “UP ke ladke” Vs. Narendra Modi, with Mayawati’s BSP thrown in for some additional spice. The media narrative portrayed a largely equal fight, or occasionally an edge to the BJP depending on whom you believed. As if to justify prior coverage, the exit polls also reflected similar trends, with BJP a bit ahead of the rest but not too much. But it all fell flat when the results were declared. This is true not just for U.P. but elsewhere as well. Recall that the non-stop coverage for more than a month of the poor “suffering” in bank queues (some even died!) also turned out to be top class fiction. Clearly, if you are watching too much TV, especially the newsroom debates & “expert” analyses, you are wasting your time. Go, get a life.

There is no substitute for hard work. Narendra Modi’s charisma sits on top of several decades of solid ground level work by RSS & several of its affiliate organizations in the remotest corners of the country. You cannot build a sustainable electoral model without some real groundwork & voter connect at the grassroots. Mulayam Singh Yadav built Samajwadi Party from scratch. He has spent his whole life in the rough & tumble of U.P.’s realpolitik, connecting with people, building relations and nurturing the party to what it is. In the 2012 U.P. State Assembly elections, people voted for Samajwadi Party with “Netaji” in mind. But it was Akhilesh who was made the CM. You can inherit party posts but not the personal touch & rapport with the people. You have to build that yourself. Governing a State & showcasing a couple of projects is one thing, having a grassroots level connect with the people that makes them vote for you again & again is another. It is no surprise that cutting across party lines, one can see that most second generation politicians are failures.

There are no shortcuts to success, no substitute for real groundwork and people connect
Leadership matters. In Uttar Pradesh, Narendra Modi staked his personal reputation at risk and led the battle from the front. There is no doubt that BJP could not have pulled off such a huge success if Modi had stayed away from campaigning or only made token appearances. Ideology has ceased to matter. Choosing your party is no longer a question of ideology you subscribe to. All parties call themselves socialist and secular. Nobody reads party manifestos. Even freebies have ceased to matter, if only because everyone promises a bountiful of them, so the factor gets neutralized. People want forceful, decisive leadership.

There are no vote banks. The “secular” narrative is dead. Sixty five percent of India’s population is below the age of 35. The median age of an Indian is 27.6 years. The generation which saw Partition has passed away. To a large section of today’s voters, even the Ayodhya demolition is “history”. And voters are no longer swayed by what happened in history. The BJP has successfully shed its “communal” label. Even Muslim attitudes towards BJP are changing. But like an Ostrich who buries its head in the sand, the old generation “secular” politicians - most of them past their retirement age - refuse to see this reality. Even the caste factor is overrated. Just because one can generate caste-wise statistics and blabber some nonsense, it does not follow that voters who cast their vote ‘vote their caste’. Even where a correlation exists between the caste of the electorate & the elected, it does not prove causation. I have not seen a single survey or opinion poll which asked the voters why they voted for a candidate they did, and majority of the voters pointed to caste as the driving factor. No wonder sand it slipping from under the feet of parties who thrived on such narrow agendas. In an article three years back, I called such parties “Dodos of Indian Politics”.  

Voters have become demanding. Television & radio has reached every home. Internet penetration is increasing rapidly. Literacy has improved significantly over the years. People are much more aware of what’s happening in & around them. You just can’t take them for a ride anymore with empty promises. The voters have become demanding, and politicians who fail to deliver get thrown out. This is repeatedly getting proved one election after another, be it in Nitish Kumar retaining Bihar, or the Akalis losing Punjab. 

Despite its recent spate of successes, even BJP cannot rest on its laurels. It will have to deliver genuine improvements to the lives of the people. Otherwise the same fate awaits them.

Sunday, February 26, 2017

Understanding Bank NPAs

“Reserve Bank extends EMI Holiday” screamed the newspaper early in the morning of 22nd November 2016, amidst those chaotic days of Rs.500 & Rs.1000 "demonetization". “RBI allows both individuals and firms with loans upto Rs. 1 crore an additional grace period of 60 days to repay dues”, said the paper.

...except that there was never any EMI holiday

“Demonetization: RBI gives small borrowers 60 extra days to repay credit”, said another - a leading financial daily, “…small borrowers who have been facing the brunt of demonetization, would get an additional 60 days to repay their credit, including agriculture and housing loans”.

Similar reports were carried by most newspapers that day, and repeated ad nauseum by television channels for several days thereafter. There was however one small problem – the news was completely wrong.
Most media houses wrongly reported the news

What RBI had said

What then had caused the press to report something like this, which wasn’t true at all? The answer to this lay in a circular issued by the Reserve Bank of India, put up on its website the previous day. The circular, titled “Relaxation in Prudential Norms”, said “…it has been decided to provide an additional 60 days beyond what is applicable for the concerned regulated entity(RE) for recognition of a loan account as substandard in the following cases…” and cited a wide gamut of loan accounts where this benefit will be applicable. Read the full circular here.

The operative term here is ‘additional 60 days…for recognition of a loan account as substandard’ which was misinterpreted to mean borrowers getting an extra 60 days to repay their EMIs or other dues. In fact, the RBI circular clearly mentioned “…this is a short-term deferment of classification…” and that this “…does not result in restructuring of the loans”. Shorn of its jargon, this means there is no change in dates when the borrowers have to repay, but if they do not, banks can have an additional 60 days to do what they do when the borrowers do not repay.

Understanding NPAs

News reporters and financial journalists aside, I have seen even analysts tracking the banking sector struggle with these terms. When banks give loans, the loans appear on the asset side of a Balance Sheet. A repayment goes on to reduce that asset, while a fresh disbursement increases these assets. However, not all loans get fully repaid, and occasionally a customer defaults. This leads to a capital loss for the bank, as the assets have to be written off. To an extent, such losses are considered ‘normal’ in the banking business, and prudence requires that banks prepare for them well in advance. This is where ‘provisioning’ comes in.

Provisioning means banks booking an ‘expense’ entry in the Profit & Loss account based on the expected losses arising from such defaults. Provisioning reduces reported profits of the bank and creates a capital buffer, which can be used when the losses actually occur. The amount of provisioning to be done is prescribed by the RBI, and depends on the ‘quality’ of the asset. The worse the quality, higher the provisioning, since lower are the chances you will ever recover your money.

Asset Classification

This is where ‘Asset Classification’ comes in. RBI requires banks to classify all loans in four groups – Standard, Sub-standard, Doubtful and Loss. Initially, all loans start as ‘Standard’. Assets under the other three categories are collectively called “Non-Performing Assets” or NPAs. NPAs are loans where principal or interest has not been received for more than 90 days beyond its due date. The RBI defines ‘Sub-standard’ as an asset which has remained an NPA for a period less than or equal to 12 months. After 12 months as an NPA, the asset degrades to ‘Doubtful’. ‘Loss’ assets are assets where the bank feels there is no hope of recovery from the customer at all. If an EMI was due on 5th February 2017 and the customer failed to pay, the loan would become ‘sub-standard’ on 6th May 2017 (i.e. 90 days after this date). Twelve months after this date i.e. from 6th May 2018 onwards, the loan will be called a ‘Doubtful’ asset.

Note the following peculiarities in this:

1.       A loan does not become an NPA immediately after default. For 90 days, it continues as a ‘Standard’ asset, though conventionally one is inclined to equate 'standard’ assets as those where the customers are repaying on time. Thus, given that demonetization was announced on the evening of 8th November 2016, even an asset due on 9th November and remaining in default would not become an NPA on 31st December 2016. And this even without taking recourse to the extra 60 days provided by the above circular.

2.       There is no hard & fast definition of a ‘Loss’ asset, it is based on a subjective assessment of the bank about the recoverability of the loan. In theory, a loan may continue to be classified as ‘Doubtful’ for several years after default, without ever being moved to ‘Loss’.

Why this classification matters is that the ‘provisioning’ banks are required to do – which, as we saw is an ‘expense’ and hits the bank’s profitability - depend on the category of the loan, progressively increasing as the loan moves down the quality lane from Sub-standard to Doubtful and Doubtful to Loss. RBI even requires banks to make provisioning on Standard assets.

Gross & Net NPAs

When banks declare their financial results, the 'Gross NPA’ and ‘Net NPA’ levels of the bank receive a lot of attention. The summation of assets under the category Sub-standard, Doubtful and Loss – are called the ‘Gross NPA’ of the bank. If you deduct the amount of provisioning done from the Gross NPA, the resultant figure is the ‘Net NPA’ of the bank. But we have seen above that provisioning is an arbitrary number – partly driven by a regulatory minimum, partly driven by the bank’s own discretion. This makes 'Net NPA’ also an arbitrary number. ‘Gross NPA’ however is a much more tangible number – it tells precisely the amount of loans overdue by 90 days or more. There is no subjectivity around it.

The NPA figures are often quoted in terms of percentages. When bank results are declared at the end of every quarter, analysts look at the ratios ‘Gross NPA %’ and ‘Net NPA %’ to determine the quality of bank's assets. Gross NPA % is calculated as ‘Gross NPA of the bank (as described earlier) divided by standard advances plus the gross NPAs’ of the bank i.e. effectively the sum of all loans outstanding as on the date of calculation. Net NPA% is calculated as the ‘Net NPA of the bank (as described earlier) divided by net advances’ i.e. sum of all loans outstanding less the provisioning for NPAs.

Note that only the absolute change in the Gross NPA comes close to showing the true movement of NPAs of the bank. And that too, with the lag of one quarter! That is, Gross NPA as of end-December minus the Gross NPA as of end-September will account for fresh defaults that have taken place in the July to September - and not the October to December - quarter! Net NPAs are distorted by provisioning, and both the ‘percentage ratios’ (Gross NPA% and Net NPA %) are distorted by the denominator. A bank can issue fresh imprudent loans and inflate the denominator, thus showing low NPA%. These fresh loans would become NPAs earliest only in the next quarter because of the 90-day rule.

It’s not over yet. There are write-offs too!

Even difference in Gross non performing assets doesn’t tell the full story of bank’s NPA movement. NPAs are further impacted by the assets “written off” during the period. And this figure may only be available from the Annual Report once a year. Written off assets are reversed completely from the asset book, reducing the Gross NPAs of the bank and the overall asset base itself.

Coming back to RBI circular mentioned earlier, all that the RBI said was that for loans with due dates between 1st November 2016 to 31st December 2016; banks have an extra 60 days – beyond the normal 90 - to recognize them as NPAs. They would become NPAs only if they remain unpaid for 150 days after the due date i.e. between 30th March 2017 to 31st May 2017 respectively, instead of 30th Jan 2017 to 31st March 2017. The asset classification and the amount of provisioning the banks have to do, would be guided accordingly.

As far as the borrowers are concerned, there was no change in their obligations to the bank; their due dates remained the same. There was no “EMI holiday” nor any “extra 60 days” to repay their credit.

Sunday, January 29, 2017

Death by China?

“We will follow two simple rules – buy American, hire American”, said a defiant Donald Trump to a cheering public & an uncomfortable Washington Establishment, as he was sworn in as the 54th President of the United States of America earlier this month. In his election victory, Trump smashed most expert forecasts, election pundits, opinion polls and the mainstream media narrative that had consistently projected his opponent as the favorite to win.

For those surprised by Trump’s victory, go no further than videos such as this, which might have played a major role in influencing public opinion during the U.S. Presidential elections. Claiming to be one of the most watched documentaries on Netflix for 3 years, the film narrates the story of an “increasingly destructive trade relationship” with China, which has led to the closure of over 50,000 American factories since China entered the WTO in 2001. The film blames China for causing loss of millions of jobs and accumulation of over $ 3 Trillion of U.S. debt to the “world’s largest totalitarian nation”. You can watch the full video here:

Loaded with terms such as “illegally subsidized exports” or “stealing jobs”, the import of the film is clear: Over the past decade and more, America has lost its ‘trade battle’ with China, and this loss is the result of an ‘unfair’ advantage the Chinese businesses get vis-à-vis their American counterparts. The film makes five basic allegations to corroborate its claims:

1. Polluting for Profits: Stringent environmental norms on U.S. manufacturing levy a heavy financial burden on U.S. businesses, but their Chinese competitors follow no such norms, giving them a cost advantage. 

2. Worker Abuse: China exploits its workers, forcing them to work for long hours often in inhuman conditions. This raises productivity per worker.

3. Currency manipulation: China pegs the value of the Yuan to the Dollar much below what it should be, which benefits its exporters.

4. Counterfeiting & Piracy: The Chinese are cheating on Patents, Trademarks and other such intellectual property.

5. Illegal Export Subsidies: The Chinese Government grants illegal export subsidies to its exporters

Due to all this, says the film, "they are cheating monumentally” by producing - sometimes even at 1/10th the price of what it costs to produce in the United States. This has led to the death of American manufacturing. Almost 90% of all products sold at Wal-Mart are made in China. From garments to chopsticks, Christmas decorations to computers, and from printers to shoes – often it is almost impossible to find anything in an American store that is NOT made in China.


The “unfair” Chinese advantage is easy to "see" - and hence to blame, but things become complicated as the film moves on to discuss the role of American Multinational Corporations, who have themselves been at the forefront of outsourcing their manufacturing. From Apple to Caterpillar and IBM to GE and Cisco to Ford, every large American corporate worth its name has shifted it’s manufacturing to China to cut costs and improve profitability. Is it right for a Corporate Entity to cut domestic jobs to maximize profits? The film admits “profits is at the root of America’s offshoring problem”. Sure corporate CEOs are focused on shareholder value, but isn’t this exactly the way it should be?

From time to time, I have seen the “blame China” narrative make its way into public sentiment. But most such narratives tell only one side of the story. Ask someone who bought his first big screen TV or furniture 50% cheaper, cheap imports have given their buyers a standard of living that was not possible earlier. When a foreign government pays you to buy toys or coffee making machines, is there really a cause to complain? As corporate America offshored jobs, profits got a boost, and despite the Wall Street engineered financial crisis of 2008, stock markets today are at an all time high, boosting the 401(k)s and mutual funds of ordinary Americans.

The documentary also erroneously links the $ 3 T U.S. government debt that the Chinese hold with cheap imports. Contrary to what is shown (and even otherwise believed); the large government debt actually represents a huge advantage the United States enjoys over other nations on account of the U.S. Dollar being the currency of international trade. Most exports worldwide are invoiced in U.S. Dollars, and the exporting country has no alternative but to park them in U.S. Government debt. The money thus represents a virtually free source of financing for the U.S. government. And as Jack Ma, founder of Alibaba pointed out recently, what the U.S. did with this money may tell the true story of why the jobs went where they went.

What about human rights? The film also mentions several human rights violations by China, such as the repression of the Falun Gong or Tibet, or its role in human organ trade or nuclear proliferation and aggressive military build-up. These are non-economic arguments that should not be used to color our judgment over cheap imports. 

It is also a contradiction to state that China’s lack of concern for the environment gives them an “unfair advantage”. Indeed, the documentary itself shows China paying the price for its monumental environmental neglect. It is well known that Chinese cities are now considered to be among the most polluted in the world.

Where are the solutions?

The ‘blame China’ rhetoric is a fallacy, and it best stands exposed when its time to offer solutions. While the documentary ends recommending “trade reform with China” and says that China should be held “accountable for human rights abuses”, it fails to come up with specifics. While pitching for ‘a strong manufacturing base for a prosperous future’, the film fails to tell you exactly how it can be achieved.

And this is no surprise.

For, China is just the symptom, the cause lies elsewhere. And this is pointed out in the film itself by Ralph Gomory, President Emeritus, Alfred P. Sloan foundation, when he says, “we are living beyond our means, we have artificially high standards of living”. Fix that, and everything will fall in place.

And that’s what President Donald Trump will need to do, to “Make America Great Again”.