China Is Now the World’s Largest Economy. We Shouldn’t Be Shocked.
China has now displaced the U.S. to become the largest economy in the world. Measured by the more refined yardstick that both the IMF and CIA now judge to be the single best metric for comparing national economies, the IMF Report shows that China’s economy is one-sixth larger than America’s ($24.2 trillion versus the U.S.’s $20.8 trillion). Why can’t we admit reality? What does this mean?
What to Watch in China GDP Data as Economic Rebound Strengthens
China is the only large nation that is expected to grow this year, with booming export demand driving an industrial rebound and the nation’s control of the Covid-19 outbreak allowing it to also reopen the domestic economy. Data for the third-quarter due next week are predicted to show gross domestic product regaining all the ground lost in the first half of the year, according to a Bloomberg survey. Industrial output is forecast to continue its V-shaped recovery and retail sales are set to continue growing, although they’re still well below the level in 2019. “The recovery in China is on track while the drivers are changing,” Larry Hu, head of China economics at Macquarie Bank Ltd. in Hong Kong, wrote in a report last week. “Property and infrastructure fixed asset investment should hit their peak growth soon and the recovery ahead will be driven by the other half of the economy: manufacturing investment and consumption.”
The Future of International Trade: Is Globalization Dead?
The most significant change over the past few years has been the decline of globalization. Up until recently, much of the world was pursuing policies aimed at increasing globalization. This meant that year-after-year it was getting easier and cheaper to move goods, people and data across international borders. While globalization is not dead, the last few years has seen a rise of economic nationalism in places where it had not been prevalent previously — like the United States and the UK. Combined with the economic nationalism that has always been present in places like China, it means that globalization has been in retreat for the past several years. We see that trend continuing, at least for the short-to-medium term (i.e., walls are more likely to go up, then come down, in the short-to-medium term).
China is open to taking on more debt if that’s what it takes to support the economy
Total social financing, a broad measure of credit and liquidity in the economy, rose by nearly 3.5 trillion yuan ($522 billion) in September to a total of 280.07 trillion yuan. The year-on-year increase of 13.5% was faster than the 12.8% pace recorded at the end of the second quarter, and 2.8 percentage points above the same period last year. The head of the central bank’s statistics department, Ruan Jianhong, pushed back against the idea that the pace of debt increase in the third quarter was “rapid” and said it was still “reasonable,” according to a CNBC translation of her Mandarin-language remarks.
Yuan inches up on optimism over economic recovery, Q3 GDP eyed
The yuan edged up against the dollar on Friday, underpinned by recent promising economic data, although it was on track for a weekly loss as many traders trimmed their long positions after the central bank lowered forward reserve requirements. Trade and credit lending data this week suggested the world’s No.2 economy was recovering faster than expected from the coronavirus shock. Market participants are now waiting for third-quarter GDP data, due next Monday, for more trading cues. China’s economy is expected to have grown 5.2% in July-September from a year earlier, faster than the second quarter’s 3.2%, a Reuters poll shows.
50,000 Shoppers Give China’s Digital Yuan Its Biggest Test Yet
Huawei ban, Covid-19 pandemic fears push China’s integrated circuit imports to record high
In September, China imported over 53.7 billion integrated circuits, 12 per cent more than the month before and all-time high Chinese companies are said to be stocking up on chips amid concerns of supply disruptions due to US-China tensions and the pandemic
Huawei labelled as security threat to the EU’s 5G network
Chinese 5G vendors Huawei and ZTE have been labelled as “high risk” companies that could pose a security threat to European networks, 41 prominent Members of the European Parliament say.
SAMSUNG AND XIAOMI STRENGTHEN THEIR POSITION WHILE HUAWEI FALLS
Few doubted that Huawei will not be able to maintain its leadership in the smartphone market for a long time and its sales will go to a steep peak. And these forecasts are already confirmed in the latest report of the specialists of Counterpoint Technology Market Research on the results of August.
Korea’s 5G twice as fast, admits Huawei
He said download speeds in China were only around 270MBPS on average, while those in South Korea were 600 MBPS. Yun said the 5G network in South Korea was widespread and the penetration rate of 5G users in South Korea was 25 percent as of September, while the rate in China was only 8 percent.
China to step up construction of small 5G base stations in 2021
Telecom operators in China, after slowing down construction of 5G base stations in fourth-quarter 2020, are expected to reactivate new infrastructure projects in 2021 with focus placed on small stations, and optical communications equipment with 10G and 25G specs to become the mainstream, according to industry sources. China’s three major telecom players had completed over 600,000 5G base stations as of the end of September this year, accomplishing the annual construction goal set for 2020 well ahead of schedule. But construction has slowed down since the start of the fourth quarter due mainly to tough US trade sanctions on Huawei starting mid-September and partly to poor weather conditions in the quarter, the sources said.
Miniso, the Japanese-looking variety store from China, sees shares jump in US IPO
Investors are jumping aboard a value store chain that is bringing Japanese-inspired lifestyle goods to consumers around the world. The company, Miniso, raised $608 million from an initial public offering in New York on Thursday. It debuted at $24.40, above its pricing range of $16.50 to $18.50, and finished the day up 4.4%. Everything about the seven-year-old firm — from its name, branding, products, to its website — suggests it is Japanese, except in fact it was born and bred in China. It bears a striking similarity to Muji, Uniqlo and dollar store Daiso in many ways, and has been called a copycat of its Japanese lifestyle predecessors.
Zara and H&M under threat from China’s little-known giant
The fast-fashion player is encroaching on the territory of more established rivals like Zara and H&M. It has become the largest, purely online, fashion company in the world measured by sales of self-branded products, according to Euromonitor. Nanjing-based Shein, founded in 2008, is aiming squarely at the “Gen Z” social-media generation, using influencers on Instagram and TikTok, and discount codes, to attract younger shoppers in an increasingly crowded fashion market. It offers low-cost styles, uploading hundreds of new designs to its app every week. The price for a dress is around half that of Zara, according to a recent Societe Generale price survey.
Shanghai Fashion Week Outpaces The Big Four
For the first time in its history, the Jing Daily Fashion Week Score evaluates how Shanghai Fashion Week’s designers connected with Chinese audiences.
China’s carbon neutral efforts to get boost from new ways to produce methanol, hydrogen
The Dalian Institute of Chemical Physics is leading projects to turn solar power into methanol and produce hydrogen from methanol China, the world’s largest investor in renewable energy, has pledged to become carbon neutral by 2060
EV maker Byton CEO departs amid restructuring: report
Chinese electric vehicle startup Byton could be steering itself out of deep financial trouble with the departure of its founder as part of a broader restructuring plan to begin production of its first model next year. The removal of a formative leader marks a turning point for the once-hyped EV startup that has suspended operations for months after the onset of a massive cash crunch beginning last year.
China Fired, Puerto Rico Hired
In that context, it was exciting to read about companies making the switch from Asia to Puerto Rico, especially from outside pharma.It’s not just tariff-plagued and cyber-insecure China that companies are fleeing for Puerto Rico. SJT has also snatched production from Malaysia, a country that is viewed as an alternative to China. This underscores a critical point: A move across the border from China to neighboring Southeast Asian countries like Malaysia or Vietnam might (or might not) provide a quick fix for the tariff problem, but may create new supply-chain anxieties. For a start, those countries could soon find themselves with a target on their backs for their own trade practices, such as currency manipulation, abetting illegal transshipment, and dumping.
Australian cotton the latest casualty in trade tensions with China
Australia’s cotton industry is bracing for what could be a devastating blow as it becomes the latest casualty in the escalating trade tensions with China
China’s largest trade show struggles to excite in virtual format
Canton Fair turns to domestic buyers under Xi’s ‘dual circulation’ strategy The fair has traditionally touted the value of deals signed during each event, which often reached roughly $30 billion. No figure was released for the spring edition, and there is speculation that the online format led to a significant plunge. This time around, the trade show is shifting its focus to domestic buyers. To attract supermarkets and online retailers within China, its website features user-friendly displays of products available for local buyers. This effort aligns with Chinese President Xi Jinping’s call for “dual circulation” — an economic strategy, frequently mentioned by his administration since summer, to increase self-reliance and ease dependence on foreign demand. The Canton Fair is working to stimulate domestic consumption by focusing more on buyers at home.
Virtual trade fair highlights strong economic rebound
The 128th China Import and Export Fair, also known as the Canton Fair, kicked off in Guangzhou, South China’s Guangdong Province, on Thursday. “I think China has been a ‘ trailblazer’ in the sense that the country is well accustomed to novelties such as ‘cloud expos’ and ‘livestreaming e-commerce,’ but many of our customers are apparently finding this whole online expo and procurement thing a new experience, and they need some time to get used to it,” Li said, noting that one of the benefits of having the Canton Fair “on the cloud” is that it saves booth rent of up to 300,000 yuan ($44,577) otherwise required in a brick-and-mortar setting. Trailblazing is the role that China is heading to fill. Indeed, a virtual trade fair would be unthinkable if it were not for China’s well-founded digital infrastructure, its know-how in e-commerce platforms and its strengths in artificial intelligence
Australia’s strong China coal exports exhausted quotas, justifying ban, but politics also at play, analysts say
Australia became the largest exporter of coking coal to China in the first half of the year due to its post-coronavirus infrastructure and property building boom Australian thermal coal exports to China have been resilient due to a rebound in Chinese power generation despite the exhaustion of import quotas
Chinese Walter White Busted for Selling Marijuana as ‘Tea’
Drug trafficking is a serious offense in China. According to the country’s criminal law, marijuana is classified in the same category as heroin, cocaine, and other hard drugs. Depending on the scale and circumstances of an operation, smuggling or trafficking in illegal drugs can be punishable by 15 years in prison, life imprisonment, or death.
‘Black Mirror,’ Real Lives: Documenting China’s Digital Underclass
Chinese internet platforms promise a new era of freedom, convenience, and opportunity. But as a new documentary explores, reality feels very different.
Cut by a Minute, Zhang Yimou Film ‘One Second’ Secures China Release
Regulators have finally approved the renowned director’s long-delayed Cultural Revolution drama, which is said to be 60 seconds shorter than when it was abruptly withdrawn from last year’s Berlin International Film Festival.
Understanding the China miracle
So, the lesson in China’s success story is: understanding the fluid nature of the global economy, wherein no status is permanent, and all indicators are constantly facing their peaks and downs. Nations that are not ready to re-innovate their success, and find fresh avenues of business and ways of creating and embracing change in commerce, will be crushed beneath the wheels of obsoleteness and decay. Like Iqbal said “apni dunya aap paida ker agar zindoon mein hai”, the secret of conquering the world of commerce lies in creativity, innovation and newness.
What can other countries learn from China’s travel recovery path?
In May, we asked how much the world could learn from China’s postpandemic travel recovery. Now, we explore where lessons from the latest data from China may be relevant for other countries.
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