Organised by the Hong Kong Trade Development Council (HKTDC), the 31st Hong Kong Gifts & Premium Fair concluded today at the Hong Kong Convention and Exhibition Centre (HKCEC). The concurrent 11th Hong Kong International Printing & Packaging Fair (27-30 April) also came to a close at AsiaWorld-Expo. The twin fairs together attracted more than 64,000 buyers from 134 countries and regions. Around 50,000 buyers visited the Gifts Fair, while over 14,000 buyers attended the Printing & Packaging Fair. Markets such as the Chinese mainland, Malaysia, the Philippines, Italy and Indonesia saw growth.
Tag: trade
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Expansion Alibaba to Indonesia to Cause Rising Trade Deficit with China?
Through the acquisition Alibaba is to have a firmer grip on the online retail business in Southeast Asia, including Indonesia, the region’s largest economy where Internet and smartphone penetration have been developing rapidly in recent years (although coming from a low base). The Southeast Asian nations where Lazada has been operating so far have a combined population of 560 million (of which an estimated 35 percent are online and thus potential online shoppers). However, Southeast Asia is also a challenging environment for online retail firms as the area is characterized by tough logistical issues (partly due to the relatively weak state of infrastructure) and there remains a lack of warehousing outside more advanced markets such as Singapor
Through the China-ASEAN Free Trade Agreement (CAFTA), effective per 1 January 2010, about 90 percent of imported goods between Indonesia and China are subject to a zero percent tariff. Due to China’s higher developed manufacturing industry and lower logistics costs the implementation of CAFTA has caused a continuously rising flow of Chinese products into Indonesia. This has caused a rising trade deficit and also curtails development of Indonesia’s manufacturing sector (after all it is cheaper and quicker to import products from China than to invest in costly and long-term import-substitution industrialization).
In 2015 Indonesia imported USD $29.22 billion worth of (non-oil & gas) products from China, while Indonesian exports to China only totaled USD $13.26 billion, implying a trade deficit of nearly USD $16 billion for Indonesia that year. This is in stark contrast to the years before 2008 when Indonesia had the upper hand in trade with China. The table below shows that Indonesia’s trade deficit with China rose significantly after the implementation of CAFTA in early 2010.
Indonesia-China Trade Balance (non-oil & gas):
2007 2008 2009 2010 2011 2012 2013 2014 2015 Export to China
(in USD billion)9.7 11.6 11.5 14.1 21.6 20.9 21.3 16.5 13.3 Import from China
(in USD billion)8.6 15.3 14.0 19.7 25.5 29.0 29.6 30.5 29.2 Trade Balance
(in USD billion)
1.1 -3.7 -2.5 -5.6 -3.9 -8.1 -8.3 -14.0 -15.9 Source: Indonesian Trade Ministry
With Alibaba now owning a controlling stake in e-commerce platform Lazada, which has a rising costumer base in Indonesia, it could cause two developments: (1) due to the stronger ties between Lazada and China it gives rise to an increasing flow of Chinese products into Indonesia putting pressure on Indonesia’s trade balance, and (2) it threatens the position of local Indonesian start-up e-commerce businesses such as Bukalapak or Tokopedia because Lazada is expected to get a capital injection from Alibaba for expansion purposes and has easier access to cheap Chinese products (more competitive).
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China’s trade slumps in January
China’s trade slumped in January due to weak global demand and holiday effects, casting new shadow over the outlook of the world’s second-largest economy, data from the General Administration of Customs showed yesterday.
Exports shrank 6.6 percent from a year earlier to 1.14 trillion yuan (US$174.6 billion) in January, ending a one-month-long growth stream of 2.3 percent in December. Imports contracted 14.4 percent to 737.5 billion yuan, much widening from the loss of 4 percent a month earlier.
As a result, January’s trade surplus shot to 406.2 billion yuan, a record high that was up 12.2 percent year on year and more than December’s surplus of 382.1 billion yuan.
“China’s exports fell sharply, suggesting weak global demand,” said Liu Ligang, chief economist at Australia & New Zealand Banking Group. “The decrease of imports was in part due to still low commodity prices.”
Liu noted the earlier timing of the Chinese New Year in 2016 compared with 2015 has also distorted the annual growth rates as traders tended to frontload their shipments in December when exports staged a remarkable rebound.
Wendy Chen, a research analyst at Nomura, said the trade data, together with other indicators, suggested growth momentum in China weakened further in January.
“As China’s retail sales remained stable, the trade slump mainly reflected weakening investment demand, possibly from weaker property investment and measures to reduce overcapacity,” Chen said.
China’s economy had a “bumpy start” this year as data for January stayed weak due to the holiday effects and the extremely cold weather. Factories continued to report contracted activities while service providers also saw their business less robust.
China’s growth momentum has kept slowing as the country entered the state of “new normal,” illustrated by moderating growth rate but better growth quality.
China’s gross domestic product grew 6.8 percent in the fourth quarter of last year, and ended 2015 with a rate of 6.9 percent, the slowest annual expansion in a quarter of a century.
In January, China’s trade decreased 9.8 percent to 1.88 trillion yuan, the Customs data showed. It deteriorated further from last year’s contraction of 7 percent, when China missed its government target of a 6-percent increase.
The European Union remained China’s largest trading partner last month, although its trade with China declined 9.9 percent to 290.3 billion yuan. It was followed by the United States and the ASEAN countries, which shipped goods worth 269.8 billion yuan and 234.2 billion yuan respectively, down 9.9 percent and 10.8 percent.
Foreign trade involving China’s private firms delivered the best performance by increasing 1.1 percent during the period, while foreign traders said their business lost 14.3percent and state-owned traders reported a contraction of 21.9 percent.
Shanghai’s trade retreated 6.1 percent to 219.4 billion yuan last month.
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Suzhou selected to host China Retail Trade Fair
The China Retail Trade Fair, more commonly known as CHINASHOP, the benchmark and barometer of China’s retail industry, announced that following voting by exhibitors and followers, Suzhou International Expo Center, the convention and exhibition venue owned and operated by Suzhou Culture and Expo Center Co., Ltd., has been selected to host 18th edition of the event, CHINASHOP 2016, with 41% of votes.
CHINASHOP rolled out a voting campaign on December 11, 2015, inviting exhibitors and followers to select the host venue for the 18th CHINASHOP by choosing between five cities: Haikou , Qingdao , Nanjing , Suzhou and Chongqing .
Suzhou outrivaled other cities with 41 per cent of votes. Following a wide-ranging consultation with exhibitors and on-site investigation of the venue, the organizers announced that the event will be held at Suzhou International Expo Center between the 3rd and the 5th of November 2016.
With the approval and support of China’s Ministry of Commerce, CHINASHOP is organized by China Chain Store & Franchise Association and Beijing Zhihe Lianchuang Exhibition Co., Ltd. With a 16-year track record under its belt, CHINASHOP has become China’s largest and the world’s second largest retail industry event and is regarded by retailers worldwide as a key annual gathering.
The city’s unique advantages lend to Suzhou International Expo Center’s popularity
Suzhou, located in the fast-growing Yangtze River Delta, is in close proximity to major commercial centers including Shanghai , Nanjing and Zhejiang and is, itself, a city which is seeing a rapid expansion in its commercial activities. Recent statistics show that dozens of large shopping malls and supermarkets opened their doors here in 2015 and that the local retail industry has been on the fast growth track.
At the same time, Suzhou and the nearby cities of Shanghai , Wuxi and Kunshan are all home to China’s leading manufacturers of commercial shelves, logos and signs. CHINASHOP 2016 in Suzhou will not only allow purchasers to visit and inspect suppliers, but also reduce exhibitors’ labor and transportation costs. Jiangsu province is also a very active hub in terms of the development of China’s online businesses, giving exhibitors an opportunity to enter into face-to-face conversations with China’s leading Internet companies and further explore how to best be a part of the transformation of the traditional retail industry in the new consumption environment.Suzhou International Expo Center is located in Suzhou Industrial Park. The center has available 60 conference rooms of varying sizes, occupying a combined area of 50,000 square meters, as well as 100,000 square meters of indoor exhibition space and 60,000 square meters of outdoor space. Its 8,000 square meter column-free luxury banquet hall is among the best in Asia . Based in Suzhou, a city with deep historical and cultural roots, the center has a full range of support facilities in immediate proximity including hotels, restaurants, shopping malls and entertainment venues. At the same time, the center is conveniently located in terms of transportation, with proximity to airports and high-speed railway stations in Shanghai and Wuxi, facilitating access for exhibitors and visitors.
“We are honored to provide the venue for CHINASHOP 2016,” said Yin Weidong , chairman of Suzhou International Expo Center. “We sincerely invite all to the center between November 3 and 5, 2016 , when we will offer exhibitors and visitors all over the world an international expo with the most advanced exhibition facilities, the most comprehensive support services and the most professional exhibition team.”
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Mood darkens for trade in China
The business sentiment of Korean companies in China has worsened in the second quarter – particularly in the automotive and electronics sectors – mainly due to the slowdown in overall consumption in the Chinese market on the heels of a wobbling stock market.
It was the second straight quarter that the business sentiment index remained below the 100 mark.
According to a report by the Korea Institute for Industrial Economics and Trade (KIET) on Monday, the companies’ business survey index in the second quarter was 71, lower than 77 in the first quarter this year.
The index reflects business sentiment, considering different business environments like quarterly profit performance, sales, costs and business regulations. As the index ranges from 0 up to 200, a number smaller than 100 means more survey participants expressed negative answers, while the index larger than 100 means more positive answers.
The slump in business sentiment was the largest in automotive and electronic devices, two industries in which Chinese rivals are quickly catching up on Korean technologies and in which consumer demands change quickly.The survey was taken for a month from June 15, by the Korea Chamber of Commerce & Industry’s Beijing office and a Korean business association in China, on some 226 Korean companies operating in China. They were doing business in seven different sectors, ranging from electronics and automotive to chemical, textile and retail.
Korean auto companies in China gave 45 points in the second quarter, a lot lower than the 94 points in the first quarter, during which the Chinese auto taste has quickly moved to favor sports utility vehicles (SUVs) that are more affordable than Korean autos.
Korean electronics companies gave 54 points in the second quarter, also much more negative than the first quarter’s 88 points, after Samsung smartphones lost market share to Xiaomi and Huawei.
Only Korean chemical and retail industries expressed positive assessments regarding their businesses in the second quarter, each giving 103 points and 100 points, respectively.
Survey participants said the slowdown of demand in the Chinese domestic market was the main reason for their business hardships in the second quarter, followed by competition with Chinese rivals and elevated labor cost, which raised overall production costs.
In the first quarter, a steep increase in labor costs was the main reason Korean companies found it hard to do business in China, reflecting the slowdown in the growth of the domestic economy.
However, the Korea International Trade Association (KITA) rolled out a positive outlook on Monday that the Chinese economy will maintain its growth rate at the 7 percent range in the latter half of the year and Chinese investment is on its way to recovery thanks to state-led infrastructure building projects, which bring up both imports from other companies as well as local real estate transactions.
The outlook said Korea’s export to China and local production of Korean companies will stay contracted until the third-quarter due to the unstable Chinese stock market and contracted consumption sentiment.
The Chinese economy is forecast to rebound to last year’s level by the fourth quarter at the latest, the KITA outlook forecast, as the central government there is pushing policies to boost cash liquidity and the real estate market.
“The sagging domestic economy made Chinese consumers lean towards frugal consumption, which helps local Chinese companies with advanced product quality gulping up market share against foreign products,” said Lee Bong-geol, a senior researcher at the Institute for International Trade at KITA