Chinese Economics Thread

[Jura The idiot]

now I read
Spotlight: Chinese investment boosts jobs in U.S. rust-belt states
Xinhua| 2017-11-08 12:56:48

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As the

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is stepping up efforts to revive the country's old industrial states, the so-called Rust Belt, Chinese investment in the region has also entered a phase of rapid growth, creating thousands of manufacturing jobs.

BLUE-COLLAR WORKERS

Fifty-eight-year-old James Wilkerson has been working in the semitrailer business in the Midwestern U.S. state of Indiana for 36 years. Not only has he experienced the ups and downs of the industry, he also witnessed how investment from China breathed life into the local community.

Monon, the town where Wilkerson lives, saw its heyday in 1980s and 1990s, when the local trailer company HPA Monon hired as many as 400 workers, roughly one third of the town's population.

The company, along with many others in the rust-belt states, trimmed its production and went bankrupt around 2001 due to the economic slowdown, putting hundreds of local residents out of work.

"There was a time of idleness. Nothing happened here until the CIMC acquired the assets," Wilkerson told Xinhua, referring to China International Marine Containers (CIMC), a Shenzhen-based transportation equipment company, which came to Monon in 2003 and built a wholly owned subsidiary called Vanguard National Trailer Corporation.

"We had 35 or 40 people at first. And then we slowly ramped up and now we have almost 500," said Wilkerson, who started as a superintendent of the factory's production line and is now the director of manufacturing.

In 10 years, Vanguard became Monon's largest employer, contributing some 80 percent of the local gross domestic product.

"Vanguard is so important to the health of the town," Randy Mitchell, president of White County Economic Development, said. "Probably every family has a member that has worked either at Vanguard now, or previously."

A similar story is unfolding in Moraine, Ohio. More than 2,000 people are working at a nearly 470,000-square-meter glass fabrication factory started by Fuyao Group, China's leading manufacturer of automotive glass.

The Fuyao facility, the largest Chinese investment project in Ohio's history, has been widely hailed as a silver lining for the local community, as the closure of General Motor's assembly plant in 2008 had wiped out thousands of jobs.

With Fuyao's further expansion in the United States, the company expects the employment number to grow to 2,300-2,500 by the end of 2017.

HIGH-TECH INDUSTRY

While Chinese companies are rehiring blue-collar workers in rural towns like Monon, they also actively engage in rust-belt cities that are transforming themselves from old industrial heartlands into new technology hubs.

In 2009, when the brake and chassis business of Delphi Automotive came to a halt in Dayton, Ohio, BeijingWest Industries Co.(BWI Group), a Chinese supplier of chassis, suspension and brake components, appeared.

BWI Group purchased the business and turned it into the company's product design and innovation center, developing advanced suspension systems for mostly high-end vehicles.

"When we were part of Delphi, we were in the mode of being either sold or wound down," recalled Brent Dunlap, an engineering site manager of BWI Group.

Dunlap said the previous company was reluctant to invest more in "higher technology based products" due to the overall decline of the auto industry.

As Delphi was purchased by BWI, there was a surgent growth of investment. "We were starting to grow not only here locally but also worldwide," Dunlap told Xinhua.

Meanwhile, hundreds of high-tech jobs were created within the company, including technicians, engineers and designers who know how to fix and program machines.

The company is altogether hiring more than 400 people and is expected to create up to 441 new, high-wage jobs by 2021 as the business grows, according to Dunlap.

Moreover, the high-level product innovation has earned BWI Group a good reputation in the industry, attracting talents from all over the country.

"We get a good support of employment because the products we work on are very interesting...it's very impressive when you can talk to a person and say you'll be working on the next generation Corvette or the next generation Ferrari," said Dunlap.

"It has been a fairly easy sell of the company to get employees to come here," he added.

LOCALIZATION EFFORTS

Chinese companies invested over 20 billion dollars in the nine U.S. states of the Midwest region as of 2016, creating over 45,000 jobs, according to China General Chamber of Commerce-U.S.A.

American workers believe that the success of Chinese companies is well deserved given their continuous efforts in localization.

"Vanguard is a very good company to work for. We are a Chinese-owned company but we are American-run," said Wilkerson.

Dunlap also agreed that in terms of "day-to-day job description or job function," not much has changed after the acquisition.

"Yet on a global perspective or a vision perspective, I think they've brought a lot to us," he added.

According to Vanguard CEO Charlie Mudd, CIMC's philosophy of "Global Opportunity, Local Knowledge" is also the key to collaborative success.

"A Chinese company will not be successful trying to open a Chinese factory in the U.S., build Chinese equipment and run it in a Chinese way...The best success comes from the combination of Chinese knowledge and capabilities paired with American knowledge and capabilities," he said.

 

[Jura The idiot]

now I read
Economic Watch: China's foreign trade growth reveals growing economic strength
Xinhua| 2017-11-08 17:58:27

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China's goods trade grew fast in the first ten months of this year, mainly due to international demand and a strong domestic economy.

Foreign trade rose 15.9 percent year on year to 22.5 trillion yuan (3.4 trillion U.S. dollars) in the first ten months of this year, the General Administration of Customs (GAC) said Wednesday.

Exports increased 11.7 percent to 12.4 trillion yuan, while imports rose 21.5 percent to 10.1 trillion yuan, said the GAC.

The trade surplus shrank 17.8 percent to 2.3 trillion yuan in the same period.

Exports to the EU, the United States and Japan were up by 16.2 percent, 17.2 percent and 14.2 percent, respectively.

The volume attributed to private enterprises increased by 17.1 percent, 38.4 percent of the total, both up on the same period last year.

In October, foreign trade rose 10.2 percent to 2.2 trillion yuan, with exports up 6.1 percent and imports up 15.9 percent. The trade surplus shrank 20.3 percent to 254 billion yuan.

Exports of machinery, electronics and labor-intensive products continued to expand in the first ten months, while the volume of steel exports dropped 30.4 percent year on year to 64.5 million tonnes.

The world economy has shown signs of warming since the beginning of this year, as the economic situations of major developed economies and emerging markets generally improved.

The IMF last month raised its forecasts for world economic growth to 3.6 percent in 2017 and 3.7 percent in 2018, both 0.1 percentage point higher than its July forecasts.

Growth of Chinese economy and solid economic fundamentals contributed to growth of foreign trade, according to Li Dawei of the National Development and Reform Commission.

China's GDP expanded 6.9 percent year on year in the first three quarters, holding steady with the 6.9 percent growth in the first half.

Major international institutions, including the IMF and the World Bank, have raised their forecasts for China's growth. The IMF has raised its forecast for the fourth time this year, estimating the economy would grow at 6.8 percent this year and 6.5 percent next year, both 0.1 percentage point higher than previous predictions.

In Jan.-Sept., China's value-added industrial output expanded 6.7 percent year on year, faster than the 6 percent increase a year ago. The tertiary sector expanded 7.8 percent year on year in the first three quarters, outpacing a 3.7-percent increase in primary industries and 6.3 percent in the secondary sector.

There are still many uncertainties for trade growth in the final quarter, principally protectionism and competition from other countries, according to Zhao Ping with China Council for the Promotion of International Trade.

China's foreign trade should move up to the medium-high end of the global value chain, and the government must continue to improve the business environment, said Li Dawei.

 

[Hendrik_2000]

I though I read article about a small town called Monon in Indiana home of semi trailer manufacturer Vanguard that went bankrupt and was vacant for 2 years. Now bought by CIMC, they restarted the production and hire 500 local people . This is win win for both countries. here is the summary

HPA Monon, a trailer company in the town of Monon, Indiana, saw its heyday around 2000. Then the company slashed its workers to less than 100 and closed in May 2002. In 2003, Vanguard, a wholly owned subsidiary of China International Marine Containers (CIMC), came into the picture. With new equipment, investment and management in place, the factory has gradually recovered to a healthy operation. And according to Charlie Mudd, Vanguard CEO, there is a grander story to it.

Chinese investment gives wheelpower to small US town
Xinhua | Updated: 2017-11-08 11:27

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[Jura The idiot]

now I read
Major consensus reached at Xi-Trump summit
Xinhua| 2017-11-09 21:22:57

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Chinese President Xi Jinping and visiting U.S. President Donald Trump have reached extensive and important consensus on the development of China-U.S. relations, Vice Foreign Minister Zheng Zeguang said Thursday.

The following highlights the major consensus about what the two sides should do.

-- Have broad common interests and important responsibility for protecting world peace, stability and prosperity

-- Display the strategic and leading role of head-of-state diplomacy in developing bilateral relations

-- Continue close contact through telephone conversations, letters, meetings and exchange views on major issues of common concern in a timely manner

-- Give full play to the four high-level dialogue platforms: the diplomatic and security dialogue, the comprehensive economic dialogue, the law enforcement and cybersecurity dialogue, and the social and people-to-people dialogue

-- Enhance macro-policy coordination concerning fiscal, monetary and exchange rate policy; keep communication and coordination on domestic structural reform and global economic governance

-- Step up communication on increasing imports from the United States and review policy of foreign investment involving national security concerns

-- Substantially ease market access to China's financial markets such as banking, securities and funds, and insurance industries, in accordance with China's timetable and roadmap

-- Reduce tariffs on automobiles gradually and properly by the Chinese side

-- Reinforce exchanges and dialogues at various levels between the two militaries

-- Strengthen cooperation in combating cybercrime and protecting the Internet

-- Prevent each other from becoming a paradise for fugitives

-- Make positive achievements in repatriating illegal immigrants

-- Enhance law enforcement cooperation on drug control and the spread of new psychoactive substances

-- Strengthen protection of people and agencies in the other country

-- Stick to the one-China policy

-- Enroll more students from each other

-- Welcome the extension of China-U.S. Agreement on Cooperation in Science and Technology

-- Cooperate on the prevention and treatment of AIDS, emerging and reemerging infectious diseases

-- Dedicate to promoting peace, stability and prosperity in the Asia-Pacific region

-- Safeguard international nuclear non-proliferation regime; promote complete, verifiable, irreversible denuclearization on the Korean Peninsula; not to accept the nuclear status of the Democratic People's Republic of Korea

-- Expand cooperation on fighting terrorism on a two-way and mutually beneficial basis

-- Offer assistance to Iraq

-- Stand by the "Afghan-owned and Afghan-led" way to realize the peaceful reconstruction of Afghanistan

-- Cooperate in nuclear safety, crack down on nuclear smuggling, and fight nuclear terrorism

 

[Hendrik_2000]

Via onebyone from pakdef

Chairman of Taiwan Semiconductor Manufacturing Co. (TSMC), Morris Chang, speaks during a quarterly investors results conference in Taipei on Oct. 25, 2012. (Mandy Cheng/AFP/Getty Images)

China’s semiconductor industry, one that will make the core components of smartphones and PCs, is growing fast. If you said "hey wait, supplying semiconductors for consumer electronics sounds like more of a Taiwan thing," you'd be right but outdated.

China’s semiconductor sector is thriving on investment from the Beijing government’s

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, Taipei-based market research firm TrendForce says in a media statement in October. China already has the world’s biggest semiconductor market, so more work on components helps perfect a domestic supply chain and reduces reliance on imports. Annual revenue from Chinese semiconductors this year will reach 517.6 billion yuan ($78 billion), up 19.4% over 2016, TrendForce forecasts. Revenue will grow 20% this year to a new record, the research firm says. Average growth worldwide is expected at just 3.4%.

“Numerous wafer fabs in China will be entering mass production during 2018, coinciding with the start of operation of many newly established domestic companies that focus on specific IC markets,” TrendForce says in the statement. A wafer is a semiconductor; a fab, a factory.

Gaining on Taiwan

Semiconductors are supposed to be Taiwan’s sweet spot. At least 130 firms here work on these components, according to the

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. Taiwan officials have said semiconductors will keep Taiwan’s estimated $131 billion high-tech industry strong despite crushing competition from China and elsewhere to develop end-user devices such as smartphones. Taiwan’s exports rose 12.5% in July partly on global demand for these chips for electronic devices, per this

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.

The tech-dependent island semiconductor will face pressure now from China’s growth, just as its

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was doing in 2013.
Taiwan lacks the scale, domestic market size and recent infusion of government support that China has. China may also attract the best world talent, impacting Taiwan further, says Charles Chou, analyst with the Market Intelligence and Consulting Institute in Taipei.

“With China investing massively into wafer fabrication and packaging and testing service, it could cause oversupply and eventually lead to a significant price fall."

Can China chip away at TSMC?

China’s semiconductors will have arrived if they starts taking down the industry’s global standard bearer Taiwan Semiconductor Manufacturing Co., or

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.

“As Chinese brands are to prioritize Chinese suppliers, it would likely squeeze their orders placed with TSMC in the future,” Chou says.

The Taiwanese contract chipmaker, with

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share and a growing

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last year, has led much of the industry in mastering ever smaller semiconductors, such as super-tiny

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chips due to be produced in 2019 for mobile and high-speed computing.

Chinese customers buy the new iPhone X at the Apple store in Beijing on Nov. 3, 2017. Device makers in China are key customers of locally produced semiconductors. (FRED DUFOUR/AFP/Getty Images)

The firm’s Nasdaq-listed share prices have caught investor attention for years as a hassle-free, profitable investment. Share prices had

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as of Wednesday in Asia.

A TSMC spokesperson did not answer a request for comment.

Over the next year, Chinese manufacturers will need certification that will keep foundry orders coming to Taiwanese competitors, TrendForce research manager Lin Jian-hong says. Over the next two years, Lin says, Chinese chipmakers may “not be technologically mature enough” to build semiconductors for advanced hardware.

But what happens after that depends on the world market for advanced chips under 10 nanometers over the coming five years, Lin says. A declining market for the high-end would favor Chinese producers, which so far specialize in chips for lower-end hardware.

“In the medium and long term, Chinese fabs will eventually be able to exert greater competitive pressure on TSMC and Taiwan’s semiconductor sector in general,” he says. “If the demand for advanced processing is not as strong, then TSMC’s long-term revenue outlook will be less positive due to the competition from Chinese fabs in the mid-range and low-end market segments.”

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[Skywatcher]

Wonder if we'll start seeing cross straits mergers soon enough (UMC is planning that with Hajian, IIRC)?

 

[Jura The idiot]

now I read
Economic Watch: Cracking China's e-commerce packaging puzzle
Xinhua| 2017-11-10 23:21:32

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As the Singles' Day shopping season in November has become a new tradition in China, the massive waste left by its packaging has brought the nation a huge headache.

With 1.5 billion packages expected to be delivered in this year's shopping festival, e-commerce companies are trying as many ways as possible to reduce the amount of waste left behind.

It's a tough job, but the companies have several weapons at their disposal, some of which are inspiring ways to solve the puzzle of packaging sustainability.

SHARED PACKAGING

With a booming sharing economy, the Chinese people have accepted the idea that everything can be shared, and so can packaging. Recycling express boxes seems to be the most direct solution for e-commerce enterprises who want both sustainable packaging and cost reductions.

JD.com, Suning.com and other e-commerce businesses have introduced plastic boxes that can be recycled and reused.

Suning.com has already put 50,000 plastic boxes in use, and says it plans to use "shared boxes" in 13 Chinese cities, including Beijing, Chengdu and Hangzhou, for Saturday's Singles' Day sales.

Meanwhile, as retrieving used boxes from customers may be inconvenient, companies are considering sharing packaging between logistics firms and suppliers.

"Now we prefer boxes without logos printed on them, so that our logistics partners can reuse them freely," said Duan Yanjian, leader of JD.com's green packaging project.

Duan said his company had also cut down on the size of tapes and express sheets, and put tape-free boxes and biodegradable delivery bags in use. Customers are encouraged to use electronic invoices to avoid paper use.

By using express sheets 30 percent smaller than before, tens of millions of square meters of paper can be saved in a single year, he said.

Sharing of express boxes also helps lower logistics costs. For Suning, a "shared box" costs the company 25 yuan (3.76 U.S. dollars), which cuts the cost for a single delivery to less than 0.03 yuan as it can be reused a thousand times.

GREEN, HIGH-TECH DELIVERY

Yet sustainable packaging is only one aspect of the eco-trend in the industry. New energy vehicles, drones and big data analytics are all buzz words in today's tech world, linked with Chinese efforts to make deliveries greener.

In a number of remote regions of China, drones are increasingly used in delivery. E-commerce giants like Alibaba and JD.com have both drones to deliver packages over water or mountains.

"It improves delivery efficiency and saves energy use by avoiding long detouring into remote areas where only a few deliveries are made," said Zhang Zhitong, a senior researcher with JD.com's data research institute.

Zhang's company is also planning to replace all its vehicles with new energy ones in the next five years.

Meanwhile, instead of human decision-making, Cainiao Network, Chinese e-commerce giant Alibaba's delivery arm, is relying on algorithms and big data to plan packing, and delivery routes, helping save packaging materials and boosting efficiency.

Test runs in rural areas showed that delivery algorithms saved vehicle use by more than 10 percent, according to Cainiao.

GOVERNMENT GOALS

The Chinese government is also clear and determined about goals in greening the courier sector.

A document released by the State Post Bureau and other government departments has made clear that by 2020, half of external packages should be degradable, 90 percent of bills electronic, and packing material for each parcel cut by 10 percent.

Tape and woven bags should be gradually replaced, it said.

The State Post Bureau said a courier package regulation system would be built, and there would be policies to support green packaging in taxation and credit.

Xu Benxin, associate professor with Kunming University of Science and Technology, said shared packaging was an innovative option for environmental protection and resource saving.

He said he expected a "green revolution" in the logistics industry, but it required more government measures to encourage green consumption.

"We also hope green packaging will be a joint drive with the government and other institutions and companies," Duan said.

 

[Franklin]

A article about China's Golden Week holidays. The most interesting part of the article is that Chinese outbound tourism seems to be helping to spread Chinese fintech abroad.

China National Day Golden Week 2017 Review

Tourists sit near a water fountain and a China national day decoration in Macau, China, on Wednesday, Sept. 27, 2017. Junkets flush with high rollers, full hotels charging five times their usual prices and brand-new entertainment options have the potential to make Golden Week the most lucrative in at least the past decade for the world's biggest gaminghub, analysts and industry officials said. Photographer: Billy H.C. Kwok/Bloomberg

This year was a record year for retail and food services spending during China’s National Day Golden Week holiday, which took place on October 1‒8, and Chinese outbound tourism continued its growth trend.

Retail and food services spending during the holiday registered a record high of ¥1.5 trillion ($226 billion), up 10.3% year over year, and data from the China National Tourism Administration (CNTA) showed that tourists made 705 million trips during the combined eight-day National Day and Mid-Autumn holidays. These accounted for tourism-related revenues of ¥584 billion ($88 billion).

The CNTA also estimates that the number of outbound tourists during Golden Week exceeded 6 million, a slight increase compared to last year. These tourists are focusing more on local experiences and appear to be spending in a sophisticated manner, looking for uniqueness and tailored travel plans.

Experiential travel: Airbnb announced that domestic bookings increased 126% and overseas bookings increased 32% during the holiday period. Local bed-and-breakfast player Tujia saw an over 400% increase year over year. A spokesperson for Tujia noted that tourists are looking for more personalized experiences and high-quality accommodations, with an average spending of ¥557 ($84) per room per night during the Golden Week holiday.
Customizable travel: There is also growing demand for more personalized/tailored holiday experiences, as more than half of Chinese tourists prefer customizable travel. Some 45% of Chinese tourists chose traditional package tours, 44% chose self-planned trips and 11% chose tailor-made travel services, according to data from the travel website Ctrip.

When it comes to travel destinations, less conventional options are also becoming increasingly popular. In our preview report, we anticipated that Southeast Asia, Thailand and Japan would be the top beneficiaries of Chinese outbound travel during this year’s National Day Golden Week holiday. According to the CNTA, and aligned with our view, the most visited countries this year included Thailand, Vietnam, Singapore and Malaysia, however, the data showed that tourists also opted for countries in Central and Eastern Europe and Russia.

According to Ctrip, several new destinations saw more than 50% growth in the number of tourist bookings this year: Morocco, Turkey, United Arab Emirates, Czech Republic, Croatia, Finland, Austria, Germany, Vietnam, Cambodia and Italy. In total, Chinese outbound tourists traveled to 1,155 overseas cities in 88 countries for this year’s holiday, according to the CNTA, which shows that mainland tourists are also becoming increasingly adventurous.

Retail and restaurant spending registered a record year, with revenues reaching ¥1.5 trillion ($225.6 billion) during the holiday and daily average sales up 10.3% year on year, according to the Ministry of Commerce. Duty free shopping continues to be the favorite among Chinese tourists. According to data from WeChat, over 52% of outbound tourists shopped at duty free retailers over the National Day Golden Week holiday.

When travelling, Chinese tourists are increasingly reverting to using the payment methods they are accustomed to at home. Overseas transactions for Ant Financial’s Alipay grew eightfold over the National Day Golden Week holiday, compared to the same period last year, according to Ant Financial. For more on our coverage of Chinese outbound tourists, please refer to our annual survey on Chinese outbound tourist trends and preferences.

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[Jura The idiot]

now I read
China's Singles' Day sales hit 1.5 bln USD in first 3 minutes
Xinhua| 2017-11-11 17:10:50

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China's Singles' Day sales on TMall hit 10 billion yuan (about 1.5 billion U.S. dollars) at just three minutes past midnight on Saturday.

In 2016, the volume was achieved in six minutes and 58 seconds, according to Alibaba, owner of TMall.

November 11 has been celebrated as China's Single's Day since the 1990s. The date was chosen because 11-11 resembles four "bare sticks," a Chinese term for bachelor. Alibaba introduced the Single's Day shopping event in 2009.

As of 1 a.m. Saturday, transactions were made in 201 countries and regions, with Japan, the United States, Australia, Germany and the Republic of Korea being the top five sources of imports.

In 2016, Alibaba's Singles' Day sales totalled 120 billion yuan (about 18 billion U.S. dollars).

"This year, we have over one million retailers worldwide who registered both online and offline stores; we have targeted 52 core commercial areas globally and we ran 30,000 service centers in rural areas of China to provide quality products to consumers there," said Zhang Yong, CEO of Alibaba.

The industry expansion involves not only retailers, consumers and logistics but also industrial engineers, designers, farmers and production managers, he said.

The new consumption trend and technological revolution are changing the lives of every one on the globe, he added.

 

[delft]

now I read
Spotlight: Chinese investment boosts jobs in U.S. rust-belt states
Xinhua| 2017-11-08 12:56:48

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How come an American company goes broke but becomes a success after being taken over by a Chinese company in the same activity? Was it lack of investment? The quality of the owners in some other respect?