Archive for ‘exports’

« Older Entries  |   Newer Entries »
21/10/2013

China’s Arms Industry Makes Global Inroads – NYTimes.com

From the moment Turkey announced plans two years ago to acquire a long-range missile defense system, the multibillion-dollar contract from a key NATO member appeared to be an American company’s to lose.

For years, Turkey’s military had relied on NATO-supplied Patriot missiles, built by the American companies Raytheon and Lockheed Martin, to defend its skies, and the system was fully compatible with the air-defense platforms operated by other members of the alliance.

There were other contenders for the deal, of course. Rival manufacturers in Russia and Europe made bids. Turkey rejected those — but not in favor of the American companies. Its selection last month of a little-known Chinese defense company, China Precision Machinery Export-Import Corp oration, stunned the military-industrial establishment in Washington and Brussels.

The sale was especially unusual because the Chinese missile defense system, known as the HQ-9, would be difficult to integrate with existing NATO equipment. China Precision is also subject to sanctions from the United States for selling technologies that the United States says could help Iran, Syria and North Korea develop unconventional weapons. A State Department spokeswoman said this month that American officials had expressed to the Turkish government “serious concerns” about the deal, which has not yet been signed.

Industry executives and arms-sales analysts say the Chinese probably beat out their more established rivals by significantly undercutting them on price, offering their system at $3 billion. Nonetheless, Turkey’s selection of a Chinese state-owned manufacturer is a breakthrough for China, a nation that has set its sights on moving up the value chain in arms technology and establishing itself as a credible competitor in the global weapons market.

“This is a remarkable win for the Chinese arms industry,” said Pieter Wezeman, a senior researcher at the Stockholm International Peace Research Institute, which tracks arms sales and transfers.

In the past, Chinese companies have been known mainly as suppliers of small arms, but that is changing quickly. From drones to frigates to fighter jets, the companies are aggressively pushing foreign sales of high-tech hardware, mostly in the developing world. Russian companies are feeling the greatest pressure, but American and other Western companies are also increasingly running into the Chinese.

via China’s Arms Industry Makes Global Inroads – NYTimes.com.

Related articles

Posted in Aerospace, China alert, Defence, Economics, exports, GeoPolitics, Manufacturing, Politics, Technology | Leave a Comment »

Tags: , , , , , , , ,
11/09/2013

Changing China set to shake world economy, again

In my view, this is a ‘must read’ article for anyone interested in how China will impact their own countries and lives in the foreseeable future. It complements another recent article – https://chindia-alert.org/2013/09/11/reading-li-keqiangs-tea-leaves-at-the-world-economic-forum/

Reuters: “Long after concerns about tightening U.S. monetary policy have faded, a more profound issue will still dog global policymakers: how to handle the second stage of China’s economic revolution.

A view of the city's skyline from the Beijing Yintai Centre building at sunset is seen in Beijing, August 29, 2013. REUTERS/Jason Lee

The first phase, industrialization, shook the world. Commodity-producing countries boomed as they fed China’s endless appetite for natural resources. Six of the 10 fastest-growing economies last decade were in Africa.

China’s flood of keenly priced manufactured goods hollowed out jobs in advanced and emerging nations alike but also helped cap inflation and made an array of consumer goods affordable for tens of millions of people for the first time.

The second stage of China’s development promises to be no less momentous.

Consumption will take over the growth baton from investment. Services will grow as a share of the economy, while industry shrinks. Commodity-intensive mass manufacturing based on cheap labor will give way to greener, cleaner ways of making things.

More of the value added by a better-educated, more productive workforce harnessing new technologies will stay in China instead of going to multinational companies.

That’s the plan, anyway.

China will remain the most powerful engine of global growth for the next couple of decades, but it will no longer be just processing imported raw materials and components for re-export, said Li Jian with the Chinese Academy of International Trade and Economic Cooperation, the Commerce Ministry‘s think tank.

“China has realized that it cannot blindly rely on investment and exports as the main drivers of growth. So China’s demand will be more balanced,” Li said.

HIGH STAKES

To show it is serious about more sustainable growth, China deliberately engineered the first-half slowdown that unnerved markets in order to address these longer-term structural priorities, according to President Xi Jinping.

Xi and the other new leaders of China’s Communist Party are expected to approve a blueprint for reform at a plenum in November. Overcoming vested interests opposed to the new economic model will be a stern test of their credibility.

A lot is at stake for the global economy too.

Philip Schellekens, an economist with the World Bank in Washington, said the importance of the reforms Beijing intends to make cannot be overstated. As China changes, so will the rest of the world.

“The structural transformations that we think are going to happen in China over the next two decades will matter far more than the near-term vulnerabilities,” he said.

On balance, commodity-exporting developing economies stand to be affected more than rich nations – an obvious exception being Australia, where the end of a China-driven mining boom was a big issue in Saturday’s election. China buys a third of Australia’s exports.

Commodity demand should stay strong, especially as China’s capital stock per head is only 10 percent that of America’s and urbanization has a long way to go. But rebalancing will favor commodities more closely tied to consumption than to investment.

Economists fret that too many emerging markets spent their windfalls from surging raw material prices instead of sloughing them into infrastructure and other investment. As a result, growth is slowing now that China’s demand is softening.

China’s appetite for agricultural commodities and energy should hold up well but Capital Economics, a London consultancy, said it was concerned about large metals exporters that have not saved their extra income and so are running current account deficits.

It singled out South Africa, Zambia, Chile and Peru as being particularly vulnerable.

via Insight: Changing China set to shake world economy, again | Reuters.

See also: https://chindia-alert.org/economic-factors/china-needs-to-rebalance-her-economy/

Posted in China alert, commodity, Consumer, Economics, employment, energy, exports, Import, Manufacturing, Market economy, Re-balancing the economy, Service industry | 1 Comment »

Tags: , , , , , ,
01/05/2013

* China Grapples With Labor Shortage as Workers Shun Factories

The government’s plan to shift the economy from manufacturing and export to services and internal consumption may be a step in the right direction to re-balance the economy – see https://chindia-alert.org/2013/04/19/chinas-growth-the-making-of-an-economic-superpower-dr-linda-yueh/.  But only if the move doesn’t “hollow out” manufacturing and export as a result. Otherwise, China will be treading a path Western nations have trod and are still treading to one of slow growth and increasing debt.

WSJ:

Second in a Series: China’s Changing Work Force

“For 15 years, Cui Haifeng worked in China’s manufacturing industry, stitching together leather to make soccer balls before working her way up to warehouse manager at a wood-flooring factory.

image

A young woman stands in the street as a hostess and advertisement for a hotpot restaurant in the shopping district Dongman in Shenzhen.

Last month the coal miner’s daughter traded a past of factory uniforms for a blouse and skirt, training as a customer-service representative for a life insurer in Guangzhou, southern China’s largest city.

The insurance industry “provides a more promising future and flexible working hours,” says Ms. Cui, 34 years old, who grew up in central China’s poor Henan province. “I want to earn more money to give my two kids a better and stable living environment.”

Her experience mirrors a transition sweeping China. This year, service-related positions—such as those in retail, travel and leisure—for the first time will account for more of the country’s gross domestic product than industrial-sector jobs, J.P. Morgan Chase JPM -1.90% predicts. Government figures show that the service sector created 37 million new jobs in the past five years, compared with 29 million in the industrial sector, which includes manufacturing, construction and mining.

Growing competition between the service and industrial sector for migrant workers like Ms. Cui is contributing to China’s tightest labor market in years, putting upward pressure on wages that already are rising in the double digits annually. That is leading apparel manufacturers to shift some production out of China, although concerns about worker safety in countries such as Bangladesh are forcing factory owners to consider the risks of doing so.

Demand for urban workers in China exceeded supply by a record amount in the first quarter, according to the government. Meanwhile, the average monthly income for migrant workers rose 12.1% from a year earlier.

“There is no let up in the labor shortage,” says Kelvin Lau, a senior economist Standard Chartered Bank. Manufacturers “are realizing that this is not a cyclical thing. It’s not about riding out a storm.”

In southern China’s industry-heavy Pearl River Delta region, nearly 90% of factory owners surveyed by Standard Chartered say the labor shortage will remain the same or get more severe this year.

Stronger growth for service-sector jobs signals that the government’s long-promised transition from an industrial economy focused on exports to one led by domestic demand is under way. Creating jobs in hair salons and insurance companies, instead of in steel mills and soccer-ball factories, helps fuel growth in the world’s second-largest economy.”

via China Grapples With Labor Shortage as Workers Shun Factories – WSJ.com.

Related articles

Posted in China alert, Economics, employment, exports, labour shortage, Manufacturing, Services, wage rises | 1 Comment »

Tags: , ,
25/03/2013

* Behind China’s Switch to High-End Exports

WSJ: “As rising labor costs push manufacturing of T-shirts, jeans and the like out of China, the country has been able to offset that loss by grabbing the high end.

[image]

And nowhere is that on better display than the San Francisco-Oakland Bay Bridge.

When the switch is flipped each night for the span’s two-year artistic light show, the electricity flows through sophisticated power devices made by Gary Hua’s factory not far from Shanghai.

In the six years since it was founded, his company has grown to 1,000 employees, who last year made three million power-supply units for high-efficiency light-emitting diodes. The company, Inventronics Inc., expects to double production this year and export more than half that output.

With labor costs increasing in China, the country is now shifting its manufacturing focus to high-tech exports such as computers and sophisticated power devices. Shaun Rein of China Markets Research tells the WSJ’s Jake Lee how Western countries are reacting.

More Related Video

“The Bay Lights” Transforms San Francisco Skyline

Inventronics exemplifies China’s shift toward producing the higher-end products that are fueling the country’s export growth. China has been increasing exports in industries as varied as computers, car parts, high-technology lamps and optical-surgical equipment, according to a Wall Street Journal analysis of Chinese, European Union and U.S. trade data.

HSBC economists estimate that China’s share of global exports increased to 11% last year, from 9% before the 2008 financial crisis and around 5% at the turn of the millennium. China’s exports rose 8% last year while global trade expanded just 1.6%, according to the Netherlands Bureau for Economic Policy Analysis.

Chinese employment in higher-value industries such as electrical- and communications-equipment production has jumped since 2008 and now exceeds employment in textiles, garments and leather making, says Royal Bank of Scotland RBS.LN +0.68% economist Louis Kuijs.

High-tech goods are more valuable and are a bigger market than clothes. Over the past two years, Chinese exports to the U.S. of high-tech electronics, auto parts and optical devices rose 24%, to $129 billion, while exports of clothes and footwear rose just 5% to $47 billion. That has caused China’s share of the U.S. trade deficit to expand $20 billion last year to a record $315 billion, according to a U.S. government analysis.

A chunk of what is marked “Made in China” is made up of parts and design that originated elsewhere, making trade data a little fuzzy. The chips in Inventronics’ LED drivers are from the U.S., for example.

But China’s exports contain a rising percentage of materials that were made in the country, according to the World Trade Organization and the Organization for Economic Cooperation and Development. In 2009, the latest year for which figures are available, 28% of the value of Chinese exports came from foreign producers. In 2005, the figure was 36%.”

via Behind China’s Switch to High-End Exports – WSJ.com.

Posted in China alert, Construction, Economics, exports, GeoPolitics, Infrastructure | 1 Comment »

Tags:
25/03/2013

* China’s Xi tells Africa he seeks relationship of equals

Reuters: “China’s new president told Africans on Monday he wanted a relationship of equals that would help the continent develop, responding to concerns that Beijing is only interested in shipping out its raw materials.

TANZANIA-DAR ES SALAAM-CHINA-XI JINPING-ARRIVAL

On the first stop on an African tour that will include a BRICS summit of major emerging economies, Xi Jinping told Tanzanian President Jakaya Kikwete that China’s involvement in Africa would help the continent grow richer.

“China sincerely hopes to see faster development in African countries and a better life for African people,” Xi said in a speech laying out China’s policy on Africa, delivered at a conference center in Dar es Salaam built with Chinese money.

Renewing an offer of $20 billion of loans to Africa between 2013 and 2015, Xi pledged to “help African countries turn resource endowment into development strength and achieve independent and sustainable development”.

Africans broadly see China as a healthy counterbalance to Western influence but, as ties mature, there are growing calls from policymakers and economists for a more balanced trade deal.

“China will continue to offer, as always, necessary assistance to Africa with no political strings attached,” Xi said to applause. “We get on well and treat each others as equals.”

But gratitude for that aid is increasingly tinged with resentment about the way Chinese companies operate in Africa where industrial complexes staffed exclusively by Chinese workers have occasionally provoked riots by locals looking for work.

Countering concerns that Africa is not benefitting from developing skills or technology from Chinese investment, Xi said China would train 30,000 African professionals, offer 18,000 scholarships to African students and “increase technology transfer and experience”.”

via China’s Xi tells Africa he seeks relationship of equals | Reuters.

Posted in BRICS, China alert, Construction, Diplomacy, economic inter-dependence, Economics, exports, Foreign acquisition, GeoPolitics, Import, Infrastructure, joint venture, Manufacturing, Natural resources, Politics | Leave a Comment »

Tags: , , , , , , ,
24/03/2013

* Africa’s trade ties with China in spotlight as President Xi visits

Reuters: “Chinese President Xi Jinping faces growing calls from policymakers and economists in Africa for a more balanced trade relationship between the continent and China as he arrives in Tanzania at the beginning of an African tour on Sunday.

Chinese President Xi Jinping adjusts his earphones during his visit to the Moscow State Institute of International Relations in Moscow March 23, 2013. REUTERS/Sergei Karpukhin

China’s ties with the continent dates back to the 1950s, when Beijing backed African liberation movements fighting to throw off Western colonial rule. It has built roads, railways, stadiums and pipelines to win access to Africa’s oil and minerals like copper and uranium to feed its booming economy.

Many across Africa see China as a valuable counterbalance to the West’s influence. But as the relationship matures there is mounting discomfort in Africa that the continent is exporting raw materials while spending heavily to import finished consumer goods from the Asian economic powerhouse.

“He will be looking to tone down the feeling that China is just here to exploit resources. I think that is going to be his main job,” James Shikwati, director of the Nairobi-based Inter Regional Economic Network think tank, told Reuters.

China’s new leader is due to land in Tanzania’s commercial capital, Dar es Salaam, on Sunday for a state banquet before delivering his first policy speech on Africa in a Chinese-funded conference hall on Monday.

Xi will go on from Tanzania to South Africa where leaders of the world’s major emerging economies, known as the BRICS, will meet on Tuesday and Wednesday and could endorse plans to create a joint foreign exchange reserves pool and an infrastructure bank at a summit.

The proposal underscores frustrations among emerging markets at having to rely on the World Bank and International Monetary Fund, which are seen as reflecting the interests of the United States and other industrialized nations.

Xi’s visit to Africa – which ends in the Republic of Congo – on his first trip abroad is seen as a demonstration of Africa’s strategic importance to China, driven by Beijing’s hunger for resources and African demand for cheap Chinese imports.”

via Africa’s trade ties with China in spotlight as President Xi visits | Reuters.

Related articles

Posted in China alert, Diplomacy, Economics, exports, GeoPolitics | Leave a Comment »

Tags: , , , , , ,
17/01/2013

* China Loses Edge As Worlds Factory Floor

WSJ: “China is losing its competitive edge as a low-cost manufacturing base, new data suggest, with makers of everything from handbags to shirts to basic electronic components relocating to cheaper locales like Southeast Asia.

imageThe shift—illustrated in weakened foreign investment in China—has pluses and minuses for an economy key to global growth. Beijing wants to shift to higher-value production and to see incomes rise. But a de-emphasis on manufacturing puts pressure on leaders to make sure jobs are created in other sectors to keep the worlds No. 2 economy humming.

Total foreign direct investment flowing into China fell 3.7% in 2012 to $111.72 billion, the Ministry of Commerce said Wednesday, the first annual decline since the fallout from the global financial crisis in 2009.

Then, a 13% fall in foreign investment into China reflected dire conditions for business in the U.S. and Europe, and global risk aversion, which choked off capital flows. Economists say the drop in 2012 is partly cyclical, driven by slowing overall growth in China and Europe’s prolonged debt crisis.

But it also is the result of a long-term trend of rising wages and other costs that have made China less attractive, especially for basic manufacturing, economists say.

By contrast, foreign direct investment into Thailand grew by about 63% in 2012, and Indonesia investment was up 27% in the first nine months of last year.

Coronet SpA, an Italian maker of synthetic leather with production in the southern Chinese province of Guangdong, plans a new factory in Vietnam to take advantage of lower labor costs and to be closer to its customers in the shoe and handbag businesses, many of which have already moved there.

via China Loses Edge As Worlds Factory Floor – WSJ.com.

See also: https://chindia-alert.org/2012/12/07/apple-to-return-some-mac-production-to-u-s-in-2013/

Posted in China alert, Economics, employment, exports, FDI, Salaries, wage rises | Leave a Comment »

Tags: , , , , , , ,
16/01/2013

* China trade surplus with U.S. may be a quarter smaller

“Lies, lies and statistics”!

Or as in Through the Looking Glass: 

“When I use a word,” Humpty Dumpty said, in a rather scornful tone, “it means just what I choose it to mean – neither more nor less.”

“The question is,” said Alice, “whether you can make words mean so many different things.”

Reuters: “The new estimate is one of the key findings of an ambitious project by the OECD think-tank and the World Trade Organisation (WTO) to present a truer picture of underlying trade flows in an age of global supply chains when intermediate inputs can cross borders several times during the manufacturing process.

A man walks in a shipping container area at the Port of Shanghai April 10, 2012. REUTERS/Aly Song

The political purpose of the exercise is to reduce protectionist pressure by demonstrating that governments are shooting themselves in the foot if they raise barriers to imports because, in doing so, they are also hurting their own exporters and competitiveness.

Angel Gurria, secretary-general of the Organisation for Economic Cooperation and Development (OECD), said the value-added approach challenged the conventional wisdom regarding trade.

“Today, we have to think about goods and services as ‘made in the world’, Gurria said.”

via China trade surplus with U.S. may be a quarter smaller | Reuters.

Posted in China alert, Economics, exports, free trade, WTO | 1 Comment »

Tags: , , , , , , ,
22/12/2012

* TATAY RIVER, Cambodia: China is top dam builder, going where others won’t

Miami Herald: “Up a sweeping jungle valley in a remote corner of Cambodia, Chinese engineers and workers are raising a 100-meter- (330-foot-) high dam over the protests of villagers and activists. Only Chinese companies are willing to tame the Tatay and other rivers of Koh Kong province, one of Southeast Asia’s last great wilderness areas.

It’s a scenario that is hardly unique. China’s giant state enterprises and banks have completed, are working on or are proposing some 300 dams from Algeria to Myanmar.

Poor countries contend the dams are crucial to bringing electricity to tens of millions who live without it and boosting living standards. Environmental activists and other opponents counter that China, the world’s No. 1 dam builder, is willing and able to go where most Western companies, the World Bank and others won’t tread any more because of environmental, social, political or financing concerns.

“China is the one financier able to provide money for projects that don’t meet international standards,” said Ian Baird, an assistant professor of geography at the University of Wisconsin who has worked in Southeast Asia for decades. “You go to China if you want to have them financed.”

The consequence, critics say, is a rollback to an era of ill-conceived, destructive mega-dams that many thought had passed. The most recent trend is to dam entire rivers with a cascade of barriers, as China’s state-owned Sinohydro has proposed on Colombia’s Magdalene River and the Nam Ou in Laos, where contracts for seven dams have been signed.

Viewed by some in the developing world as essential icons of progress, dams in countries as far apart as Ecuador, Myanmar and Zambia have spearheaded or reinforced China’s rising economic might around the world. They are tied to or put up in tandem with other infrastructure projects and businesses, and power generation equipment ranks as China’s second-largest export earner after electrical machinery and equipment.

In energy-starved Cambodia, trade with China has risen to 19 percent of GDP from 10 percent five years ago, according to an Associated Press analysis of International Monetary Fund data.

The year-old $280 million Kamchay Dam in Cambodia’s Kampot province was the largest ever foreign investment when approved as well as a political flag-carrier for Beijing. It has been hailed by both governments as a “symbol of close Chinese-Cambodian ties.”

Cambodia’s electricity demand grew more than 16 percent a year from 2002 to 2011, with shortfalls largely met through costly oil imports, said Bun Narith, a deputy director general in the Ministry of Industry, Mines and Energy. Only 14 percent of rural homes have electricity, one of the lowest levels in Southeast Asia.

“We have no choice,” Bun Narith said. “Hydropower is the priority, and the Chinese have the initiative and capability, both financial and technical.”

The 20 hydro dams built, being constructed or under study in Cambodia, the bulk of them by the Chinese, would lift Cambodia out of literal darkness and make it energy self-sufficient, he said. “We should have a win-win policy, a balance between environment and energy. After all, electricity is also a basic human need.””

via TATAY RIVER, Cambodia: China is top dam builder, going where others won’t – World Wires – MiamiHerald.com.

 

Related articles

Posted in China alert, Construction, Economics, Electricity, exports, GeoPolitics | 1 Comment »

Tags: , , , , , , ,
21/11/2012

* India to miss export target

Bad news for ruling Congress Party as national general elections are scheduled for next year.

WSJ: “India’s merchandise exports are set to fall way short of initial estimates because of a demand slowdown in key markets, shows a government projection that is likely to deepen concerns on the country’s financial health and hurt its currency.

India’s exports could be as low as $291 billion in the fiscal year through March, compared with the initial target of $360 billion, according to a trade ministry document. At best, that if market conditions improve dramatically from now, exports could total $300 billion to $320 billion.

via India to Miss Export Target – WSJ.com.

Related articles

Posted in Economics, exports, India alert | Leave a Comment »

Tags: , , , , , , , ,
« Older Entries  |   Newer Entries »
CCChang

Law of Unintended Consequences

continuously updated blog about China & India

ChiaHou's Book Reviews

continuously updated blog about China & India

What's wrong with the world; and its economy

continuously updated blog about China & India