Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21
CISCO 2020 Dot com Bubble Stock vs 2021 Bubble Tech Stocks Warning Analysis - 6th Oct 21
Precious Metals Complex Searching for a Bottom - 6th Oct 21
FB, AMZN, NFLX, GOOG, AAPL and FANG+ '5 Waves' Speaks Volumes - 6th Oct 21
Budgies Flying Ability 10 Weeks After wings Clipped, Flight Feathers Cut Grow Back - 6th Oct 21
Why Silver Price Could Crash by 20%! - 5th Oct 21
Will China's Crackdown Send Bitcoin's Price Tumbling? - 5th Oct 21
Natural Gas News: Europe Lacks Supply, So It Turns to Asia - 5th Oct 21
Stock Market Correction: One More Spark to Light the Fire? - 5th Oct 21
Fractal Design Meshify S2, Best PC Case Review, Build Quality, Airflow etc. - 5th Oct 21
Chasing Value with Five More Biotech Stocks for the Long-run - 4th Oct 21
Gold’s Century - While stocks dominated headlines, gold quietly performed - 4th Oct 21
NASDAQ Stock Market Head-n-Shoulders Warns Of Market Weakness – Critical Topping Pattern - 4th Oct 21
US Dollar on plan, attended by the Gold/Silver ratio - 4th Oct 21
Aptorum Group - APM - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 3rd Oct 21
US Close to Hitting the Debt Ceiling: Gold Doesn’t Care - 3rd Oct 21
Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
Original Oculus VR HeadSet Rift Dev Kit v1 Before Facebook Bought Oculus - 3rd Oct 21
Microsoft Stock Valuation 2021 vs 2000 Bubble - Buy Sell or Hold Invest Analysis - 1st Oct 21
How to profit off the Acquisition spree in Fintech Stocks - 1st Oct 21
�� Halloween 2021 TESCO Shopping Before the Next Big Panic Buying! �� - 1st Oct 2
The Guide to Building a Design Portfolio Online - 1st Oct 21
BioDelivery Sciences International - BDSI - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 30th Sep 21
America’s Revolving-Door Politics Behind the Fall of US-Sino Ties - 30th Sep 21
Dovish to Hawkish Fed: Sounds Bearish for Gold - 30th Sep 21
Stock Market Gauntlet to the Fed - 30th Sep 21
Should you include ESG investments in your portfolio? - 30th Sep 21
Takeda - TAK - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 29th Sep 21
Stock Market Wishing Away Inflation - 29th Sep 21
Why Workers Are NOT Returning to Work as Lockdown's End - Wage Slaves Rebellion - 29th Sep 21
UK Fuel PANIC! Fighting at the Petrol Pumps! As Lemmings Create a New Crisis - 29th Sep 21
Gold Could See Tapering as Soon as November! - 29th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

China’s path from World’s Factory to World Market

Economics / China Economy Nov 07, 2019 - 12:15 PM GMT

By: Dan_Steinbock

Economics The rise of the Shanghai Import Expo reflects China’s huge transformation from world producer and cheap prices to world consumer and innovator.

Speaking at the second China International Import Expo (CIIE) in Shanghai, Chinese president Xi Jinping pledged China will stimulate increased imports, continue to broaden market access, foster a world-class business environment, explore new horizons of opening-up and promote international cooperation at multilateral and bilateral levels.  



In order to safeguard and promote economic globalization, Xi said two years ago at the World Economic Forum in Davos, Switzerland that “efforts to reduce tariff barriers and open up wider will lead to inter-connectivity in economic cooperation and global trade.” In contrast, “the practices of beggaring thy neighbor, isolation and seclusion will only result in trade stagnation and an unhealthy world economy.”

Today, that message is critical. The World Bank has forecast only 2.6 percent global growth in 2019. That’s the lowest since the global financial crisis of 2008-9. And the collateral damage of trade protectionism is spreading worldwide.

China shifts from exports to imports

In the past, the best known trade event in China was the Canton Fair in the southern Guangdong province. In October, even amid the US tariff wars, it attracted more than 210 countries and regions, 25,000 companies and some 200,000 potential buyers, most of which were from Belt and Road countries.

China is now promoting the Shanghai CIIE as the world’s first international import expo. Its partners include the World Trade Organization and key United Nations trade organizations, which understand well that the CIIE reflects China’s structural rebalancing from investment and net exports toward innovation and consumption.

Shanghai, the most international Chinese megacity, is the natural host of the import expo. While the Canton Fair built its clout over decades, the Shanghai CIIE could develop its international influence in a matter of years.

Despite international tensions, it has attracted foreign leaders, such as French President Emmanuel Macron, diamonds from Belgium, Cambodian fragrant rice, and Kenyan farm products, along with US automaker Ford’s cutting-edge Ford and Lincoln brands. Despite the US tariff war against China, almost 200 US-based companies – from GE to Qualcomm – are participating in the CIIE and US companies have the largest exhibition space at the expo.

While the Canton Fair has morphed from traditional manufacturing exports to advanced technology, the Shanghai CIIE is focused on imports. It’s a massive shift in a country of more than 1.3 billion people. As China has prospered, Chinese companies have invested increasingly abroad, while Chinese consumers can afford foreign imports, thanks to reforms and opening-up policies, and Chinese innovation in ecommerce. 

Middle-income consumers drive import growth

Recently, the European Union (EU) said that its firms had provided positive feedback on the CIIE last year, registered increased sales or met new potential buyers. Yet, EU wants more to do more vis-à-vis the EU-China investment agreement.

Obviously, the US, the EU and Japan would like to see China implementing the kind of reforms that support their exporters in the near term. But such reforms cannot happen disruptively. Even the advanced countries fought two world wars and were engaged in a Cold War before import growth truly picked up internationally.

While the middle class is shrinking in the West, China’s gradual reforms will ensure a rapidly expanding middle-income consumer base, the new precondition of international trade. As the world factory is morphing into the world’s largest market, rising numbers of consumers fuel import growth.

As China’s intensive industrialization shifts toward a post-industrial society, GDP growth is decelerating, but living standards, as measured by per capita income, are rising (Figure). That is vital for import growth over time and provides a blueprint for middle-income groups in other large emerging countries, such as India.

Figure          Chinese Imports and GDP Per Capita, 2000-2019

As long as globalization advances in both rich and middle-income economies, imports to China increase. For instance, as the world economy was still recovering in early 2018, Chinese imports reached an all-time high. But after the US began imposing heavy tariffs on Chinese imports, businesses invested more cautiously and consumers became more cost-conscious. After all, China’s average per capita income remains only 15-25 percent of that in the US and Western Europe.

Long-term benefits require global cooperation

Some US research firms expect China to become the world’s top retail market this year, surpassing the US. The forecast may be optimistic, but the trend is clear. Today, China's imports of goods and services are estimated to be about 10 percent of the global total and, given international peace and stability, they will continue to expand.  

China’s focus is on economic development that shuns trade protectionism and seeks to balance the needs of the global economy and its own economy. That’s why, instead of promoting “China First” nationalism and imposing excessive tariffs on imports, China is helping the Canton Fair to expand international trade and the Shanghai CIIE to supports import and that’s why President Xi promotes globalization.

That’s very much in the long-term interest of both the advanced and developing economies.

Dr. Dan Steinbock is the founder of Difference Group and has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and the EU Center (Singapore). For more, see http://www.differencegroup.net/  

© 2019 Copyright Dan Steinbock - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dan Steinbock Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in