Why Trump is missing the mark by focusing on goods instead of services

David Dodwell says by zeroing in on the trade imbalance between China and the US, Trump is ignoring the huge potential for US exports in services such as tourism.

For example, look where these services exports come from. Over US$290 billion of services exports (about 40 per cent of total services exports) came from tourism – 76 million foreign tourists visited the US in 2016, underpinning close to 10 million jobs. China is today the source of more international travellers than any other country – more than 150 million last year – and this total is growing at more than 5 million a year. In 2016, just 3 million of these travellers went to the US – but they spent US$33 billion, by far the highest per capita spending of any country worldwide, according to the Germany-based China Outbound Research Institute.

At this rate, attracting an extra 1 million Chinese visitors would lift US tourism exports by US$11 billion a year. Add 10 million over the coming decade – not an unreasonable target – and this amounts to services exports worth an extra US$110 billion a year, adding literally millions of new jobs in the US. By poisoning relations with China, Trump’s trade war is putting much of this potential at risk: imagine how easy it is for China to suddenly make it harder to get US visas.

It is intriguing that Trump is so keenly obsessed with US goods exports to China worth US$130 billion a year, while wholly neglecting the upside potential of tourism and other services worth twice as much.

www.scmp.com/comment/insight-opinion/hong-kong/article/2161130/why-trump-missing-mark-focusing-goods-instead

PUBLISHED : Saturday, 25 August, 2018, 4:01am

UPDATED : Saturday, 25 August, 2018, 6:58am

Foxconn plans semiconductor operations in China’s Greater Bay Area

The Taipei-based company, known formally as Hon Hai Precision Industry, will develop semiconductor design services, and semiconductor equipment and chip design in the city, according to the Zhuhai government’s website. This strategic cooperation was first reported by The Wall Street Journal on Friday.

Terry Gou Tai-ming, the billionaire chairman and chief executive of Foxconn, said in a statement on the Zhuhai website that the development of the Greater Bay Area – a Chinese government initiative to integrate the economies of Hong Kong, Macau and nine cities in Guangdong province – “has brought a rare opportunity for Zhuhai”, which aims to develop a semiconductor services industry.

The strategic cooperation between Foxconn, the main supplier for Apple’s iPhone, and the Zhuhai government has come several weeks after the company broke ground on its US$10 billion liquid crystal display plant in the US state of Wisconsin.

That pact represents another effort to support China’s goal in developing a strong domestic semiconductor supply chain and become more competitive with chip industry leader the US.

China makes more than 90 per cent of the world’s smartphones, 65 per cent of personal computers and 67 per cent of smart televisions, according to estimates from Bernstein Research. But the country has had to buy much of the chips that go into these devices from abroad. Annual chip imports by China have risen to more than US$200 billion since 2013 and reached US$260 billion last year.

Celia Chen

www.scmp.com/tech/enterprises/article/2160265/foxconn-plans-semiconductor-operations-chinas-greater-bay-area

Europe’s slowdown leaves China’s exporters with another big gap to fill amid trade war with US

David Brown- says as the German economic spring appears to be winding down, and with Europe expected to have a hard landing, China should be looking less to exports.
With a market of 740 million consumers, Europe is an important destination for Chinese exports. A downturn in European demand for China’s goods could be bad timing for Beijing in the midst of its deepening trade war with America. The prospect of slower world trade, weaker global economic activity and the shadow descending over international equity markets compound the problem. Beijing needs a bold reflation plan to help soften the external blow while boosting the domestic economy. No time like the present to get those policy changes into gear.
https://www.scmp.com/author/david-brown

Starbucks, Costa take on the challenge of growing the coffee business in China, the traditional land of tea

According to a 2017 report by market intelligence consultancy Mintel, China’s coffee shop market is set to grow at a compound annual rate of 5.7 per cent in the next five years, reaching 79.4 billion yuan (US$11.6 billion) by 2022, up from 60.2 billion yuan last year, with booming markets in first- and second-tier cities the main drivers for coffee shop chains.

Starbucks has been in China since 1999 and now has 3,400 stores in the country. Chief executive Kevin Johnson has repeatedly said that China would become the firm’s biggest market within a decade.

https://www.scmp.com/business/companies/article/2160564/starbucks-costa-take-challenge-growing-coffee-business-china?

Daimler in $2 Bln China Investment With BAIC...

By Reuters | February 25, 2018 — 7:09 AM EST

Daimler and its Chinese partner BAIC plan to invest almost $2 billion in a state-of-the-art factory in China, underlining their relationship as rival Geely makes a surprise swoop on the German carmaker.

The two will invest more than 11.9 billion yuan ($1.88 billion) in modernising a plant to build premium Mercedes-Benz cars including electric vehicles, BAIC said in a filing to the Hong Kong Stock Exchange dated Friday and confirmed by Daimler on Sunday.

The chairman of Chinese carmaker Geely said late on Friday he had bought an almost 10 percent stake in Daimler, in a $9 billion bet to access the Mercedes-Benz owner's technology.

The move poses a challenge to Daimler, which as well as its Chinese partnership with BAIC Motor Corporation has an industrial alliance to develop cars and trucks with Renault-Nissan, which owns a 3.1 percent stake in Daimler.

Read more: Daimler in $2 Bln China Investment With BAIC as Geely Swoops | Investopedia https://www.investopedia.com/partner/reuters/berlin-sees-no-need-act-geelys-purchase-daimler-stake/#ixzz586K9OYIG
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Baidu Battling AI News And 5G Is Coming To China A Year Early

5G is a complex technology and is the most sought after by governments, telecommunications companies and many tech giants. But why? The simple answer is that it will be 20Xs faster and more robust than 4Gand that means more subscribers, end users and ultimately higher revenues.

China has made bold statements about their desire to be the first country with 5G coast-to-coast (it was supposed to be South Korea or Japan). This time last year, China Mobile, one of the country's largest telecommunications operators, announced that they would be ready for commercial 5G in 2020.

Bay McLaughlin , CONTRIBUTOR

https://www.forbes.com/sites/baymclaughlin/2018/02/21/

Promoting a More Inclusive and Sustainable Development for China...

BEIJING, February 22, 2018—China can achieve more inclusive and sustainable development with coordinated reforms across a broad range of areas that maximize development impact and address its development challenges, says the World Bank Group’s new Systematic Country Diagnostic for China.

“China’s remarkable progress in reducing extreme poverty has significantly contributed to the decline in global poverty,” said Hoon S. Soh, World Bank Program Leader for economic policies for China, "The World Bank Group will continue to support China’s goals to eliminate extreme poverty and ensure inclusive and sustainable growth."

http://www.worldbank.org/en/news/press-release/2018/02/22/

China air pollution...

China has an air pollution problem. But recently the country has worked to improve its air quality and reduce emissions. In 2017, China elected to shut down 40 percent of its factories, and announced plans to ban diesel-powered cars. In 2018, it became home to the world’s largest smog tower that is capable of reducing nearby air pollution by 15 percent.

Now, China is proceeding with a new plan: planting trees — 84,000 square kilometers (32,400 square miles) of them, to be exact.

https://futurism.com/china-plant-32400-square-miles-trees-combat-air-pollution/

China steams past U.S., France to be Germany's biggest trading partner

China for the first time became Germany's most important trading partner in 2016, overtaking the United States, which fell back to third place behind France, data showed on Friday.

German imports from and exports to China rose to 170 billion euros ($180 billion) last year, Federal Statistics Office figures reviewed by Reuters showed.

(www.reuters.com)

China is building a full-size replica of the Titanic 745 miles from the sea

China is building a life-size replica of the doomed RMS Titanic in a landlocked county more than 1,200 kilometers (745 miles) from the sea.

When completed, the replica ship will measure 269 meters (882 ft) long by 28 meters (92 ft) wide and will feature reproductions of the original Titanic's features, including a ballroom, theater, swimming pool and rooms, according to Chinese state-run news agency Xinhua.

The total cost of the project is expected to run to around 1 billion yuan, or $145 million.

Economy of China

China's socialist market economy is the world's second largest economy by nominal GDP, and the world's largest economy by purchasing power parity according to the IMF, although China's National Bureau of Statistics rejects this claim. Until 2015 China was the world's fastest-growing major economy, with growth rates averaging 10% over 30 years. Due to historical and political facts of China's developing economy, China's public sector accounts for a bigger share of the national economy than the burgeoning private sector. 

China is a global hub for manufacturing, and is the largest manufacturing economy in the world as well as the largest exporter of goods in the world. China is also the world's fastest growing consumer market and second largest importer of goods in the world. China is a net importer of services products.

China is the largest trading nation in the world and plays the most important role in international trade, and has increasingly engaged in trade organizations and treaties in recent years. China became a member of the World Trade Organization in 2001. China also has free trade agreements with several nations, including Australia, South Korea,ASEAN, New Zealand, Switzerland and Pakistan.^[

On a per capita income basis, China ranked 72nd by nominal GDP and 84th by GDP (PPP) in 2015, according to theInternational Monetary Fund (IMF). The provinces in the coastal regions of China tend to be more industrialized, while regions in the hinterland are less developed. As China's economic importance has grown, so has attention to the structure and health of the economy.

Source:(en.wikipedia.org)

$21.3 trillion (PPP; 2016)[
GDP rank	2nd (nominal); 1st (PPP)
GDP growth	6.9% (2015) 7.3% (2014)[
GDP per capita	$9,000 (nominal; 2016) $16,000 (PPP; 2016)[
GDP per capita rank	73rd (nominal); 84th (PPP)
GDP by sector	agriculture: 9%, industry: 40.5%, services: 50.5% (2015)[5]
Inflation (CPI)	1.4%(2015)[6]
Population belowpoverty line	5.1% (2015)
Gini coefficient	46.2 (2015)
Labour force	807 million (1st; 2015)[7]
Labour force by occupation	agriculture: 29.5%, industry: 29.9%, services: 40.6% (2014)
Unemployment	4.05% (2015)[8]
Average gross salary	$9,000, annual (2016)
Average net salary	$6,000, annual (2016)[9]
Main industries	mining and ore processing, iron, steel, aluminum, and other metals, coal; textiles and apparel; petroleum; cement; chemicals; fertilizers; consumer products, including footwear, toys, and electronics; food processing; transportation equipment, including automobiles, rail cars and locomotives, ships, aircraft and other vehicles; telecommunication and industruial equipment; machinery; heavy engineering; commercial space launch vehicles, satellites, manufacturing
Ease-of-doing-business rank	90th (2015)[10]
External
Exports	$2.3 trillion (2015[11])
Export goods	Electrical and other machinery, including data processing equipment, apparel, textiles, iron and steel, optical and medical equipment, as well as almost every single category of industrial products.
Main export partners	United States 16.9%  Hong Kong 15.5%  Japan 6.4%  South Korea 4.3% (2014 est.)[12]
Imports	$1.7 trillion (2015[11])
Import goods	Electrical and other machinery, oil and mineral fuels, optical and medical equipment, metal ores, plastics, organic chemicals
Main import partners	South Korea 9.7%  Japan 8.3%  United States 8.1%  Taiwan 7.8%  Germany 5.4%  Australia 5% (2014 est.)[13]
FDI stock	$1.3 trillion (2012)[14]
Gross external debt	$0.9 trillion (2013)
Public finances
Public debt	16.7% of GDP (2015 est.)[15]
Revenues	$2.1 trillion (2013 est.)
Expenses	$2.3 trillion (2013 est.)
Credit rating	AA- (Domestic) AA- (Foreign) AA- (T&C Assessment) (Standard & Poor's)[16]
Foreign reserves	$3.3 trillion (1st; March 2015)[17]
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars.