Wednesday, November 26, 2003

And China gets now really annoyed

Keeping this week literally the middle-ground between China and the US by staying in Europe, but things look grim at the trade-front. Chinabiz gives an overview of the battlefield.

Tuesday, November 25, 2003

US expands trade war to TV-sets

The Bush administration will impose levies on TV-sets from China that are perceived to dodge the real prices to conquer the US market, writes the Financial Times. Well, those TV-sets are damned cheap in China too, I cannot imagine how they can be made for that price, but they still do.

Friday, November 21, 2003

Textile and North Carolina

Interesting background article in the New York Times regarding the backyard of George Bush: the South. In this case: the struggling textile industry in North Carolina.
Stop the internet – the WTO column

(This weekend at Chinabiz)

Ann Arbor, MI – US trade officials have been demanding China to float its currency, to deal with the infringement of intellectual property rights. The Bush administration is doing it best to trigger off a trade war over textile quota. Deputy trade secretary Josette Shiner is this week in Beijing to add US farm goods at the political agenda.
History does no do very well with the current US government, even when it is only a few years ago.
It was in the days when China was about to enter the World Trade Organization and US media announced that their agricultural products would wipe away Chinese agriculture when China would lower its trade barriers. The US was still hailing China’s accession into the WTO as a great opportunity to get even in trade. We already felt pity with the hapless Chinese farmers that would have to face such a harsh future.
Well, that did not happen, not so much because China was actively blocking US goods, but because logistics is still rather poorly developed in China. That makes it very hard for US apples and oranges to leave the coastal areas. Local products had it much easier, because they were often already there were they were needed.
When Shiner will be pressing for more access for agricultural products, he might was well bring some shovels along to join the building craze.

Of course: the lack of infrastructure brings literally an unequal playing field, but China is picking up very fast her, although not as fast as the US hoped for. Being in the US it does not need much to see how jobs leave the US. I just saw an article in the New York Times of American radiologists who are loosing their work to their Indian colleagues. While the average US radiologist earns a whappy 350,000 US dollar per year, his Indian colleague can do the same work for 25,000 US dollar.
On one of my recent flights I met an American business man who supplies larger retailers like Wal-mart with displays. He described how the American retailer is using the internet for to let its suppliers bid on their projects. “You see your competitors moving in, taking away your work, while you look at your screen,” he said. Like most Americans he used to like transparency, although he can now also see the negative side of it.
While the US are still lagging behind Canada, Japan and Korea in terms of connectivity, the country is catching up fast, offering broadband connections to source work out to cheaper places in the world. That is how the USA is loosing it jobs, very fast. We can add value in many other ways, tell me the futurologists at the University in Michigan.
Well, let’s see.
When railroads were being built, opposition groups resisted that novelty that would destroy traditional life. They were right, it did destroy traditional life, but nothing could be done to stop it, and efforts to stop the railways also failed.
I’m just waiting for a ‘kill the internet’ movement, the ultimate anti-globalization movement. It will come, and it will fail.

Fons Tuinstra

Thursday, November 20, 2003

China retaliates

China disqualified the US textile quota as a move against free trade, Reuters reports. It stopped several deals with the US due to logistical and visa probmens, but a major trade war seems to be in the making, although the New York Times qualifies the response as very moderate.

Wednesday, November 19, 2003

US expands textile quota for China

The Bush-administration has taken a firm line against China by imposing new quota for three textile products, bra's, dressing gowns and robes, writes AP. "U.S. textile makers hailed the announcement as a major victory to protect their beleaguered industry while critics warned that the decision would hurt American consumers by raising prices," says the article.
US Importers of textile have dismissed the move, since it will not bring back any jobs, they say.
State-owned newswire Xinhua in China repeated almost verbatim the AP story, without adding any comments at this stage.

Who did react was the International Monetary Fund (IMF) that said the Renminbi was not really overvalued and had warned the US government against taking additional trade measures, like the textile quota.

Tuesday, November 18, 2003

US economy picking up

The US economy is picking up, also in terms of jobs for MBA-students, told Linda Lim, professor at the Michigan Business School me this afternoon. Especially the job prospects for the American students look very bright again.
That is not yet the case for the international students, as American companies tend to hire mainly US students. "They think they might get problems in getting a visa for those students," said Lim. "That is nonsense, but it makes it hard for international students anyway.
The US-China relations are going to be an issue in the upcoming elections, she aknowledged. Lim in the past also spoke out again the US policy of putting pressure on China. Lim: "It simply does not make sense."

Monday, November 17, 2003

Internet kills US jobs

What makes reading papers fun is the combination of articles you sometimes see. Today in the Money&Business section of the New York Times an in-depth article on the outsourcing of US jobs for radiologists in this case to India. US radiologists can earn up to 350,000 US dollar, while their Indian colleagues can do a similar job - thanks to the internet - for 25,000 US dollar.
On the same page an article about a start-up company that offers wireless broadband access to US citizens, as the traditional suppliers cannot meet demand. The paper compares the expansion of the broadband internet access to the expansion of the railroad in the 19th century and the highways in the 20th, both developments that defined the US in their days.
On my way from Shanghai to Tokyo I sat next to a supplier of Wal-mart who also had to deal with the effects of the internet. Wal-mart now organizes global bidding through the internet between suppliers. "You see the price drop on the screen, and nothing you can do about that." This is called 'transparancy', isn't it?
There seems only one way out: ban the internet. But that was tried with the railways in the past, but also did not work out.
US trade official on farm goods and IPR

US deputy secretary Josette Shiner is the next in line to visit Beijing and pressure China in this case on infringements of intellectual properties and farm goods, reports Reuters.
"U.S. officials have identified intellectual property rights as an area where the United States could take action against China at the World Trade Organization," writes the newswire.
This happened after the US administration had to give up possible legal action against China refusal to float its currency.
Access of US agricultural goods might be another dead end issue on the US agenda. Before China entered WTO US farm goods were expected to flood the country and even wipe out Chinese agriculture. The opposite happened, mainly because of the poor logistics inside China, that made it hard for US goods to leave the coastal areas and move to the interior. That situation might not have changed in the past few years.

Wednesday, November 12, 2003

China savior of the world economy

The International Herald Tribune joined the Financial Times is cheering up China's economic performance as the newly found safety belt for a sluggish world economy.
That was slightly different from US commerce secretary Don Evans I watched yesterday at the show of Lou Dobbs at CNN and warned China again to get an "equal playing field", whatever that might mean.
But the Bush administration resists proposals in Congress to impose a 27.5% tariff on Chinese goods, the China's official newswire Xinhua reports.

Tuesday, November 04, 2003

A balanced European viewpoint

In the Financial Times of today.
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