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Tag: trade

  • Malaysia’s economy expands 4.7% in Q4 2018

    Malaysia’s economy expands 4.7% in Q4 2018

    The Malaysian economy grew at a faster pace of 4.7% in the fourth quarter (Q4) of 2018 driven by private sector activity. This compares with a 4.4% growth in Q3 2018. For 2018 as a whole, the local economy also expanded 4.7%. According to Bank Negara Malaysia (BNM), a rebound in exports of goods and services contributed towards the positive growth of net exports.

    Headline inflation declined to 0.3% from 0.5% in Q3, mainly due to transport inflation turning negative.

    The zerorisation of the Goods and Services Tax and the implementation of the Sales and Services Tax continued to exert an overall downward impact to headline inflation during the quarter.

    BNM governor Datuk Nor Shamsiah Mohd Yunus said the Malaysian economy is expected to remain on a steady growth path with private sector demand being the main driver of growth.

    She said headline inflation is expected to average moderately higher.

  • Trump says could extend March 1 China trade talks deadline

    Trump says could extend March 1 China trade talks deadline

    US President Donald Trump (pix) said Tuesday he would consider extending the deadline for a trade deal with China beyond March 1. “If we’re close to a deal, where we think we can make a real deal… I could see myself letting that slide for a little while,” Trump said at the White House. But he added: “Generally speaking I’m not inclined to do that.”

    The comments came as the third round of trade negotiations were set to resume in Beijing to avert more than doubling tariffs on $200 billion in Chinese imports.

    “China wants to make a deal very badly,” he said, and “things are going well” in the talks. And while no date has yet been agreed for a meeting with China’s President Xi Jinping, he said he expects that to happen “at some point.”

    The high-stakes dispute has raised concerns it could spill over into the global economy after Trump last year hit China with 25% punitive tariffs on $50 billion in goods, and then imposed 10% duties on another $200 billion in annual imports.

    The rate on all those imports are set to increase to 25% if no agreement is reached by March 1.

    China’s economy already has shown signs of slowing, while the trade war has shaken the confidence of US businesses, as retaliatory tariffs have raised prices and helped choke off a key export market.

    And Trump’s aggressive strategy has failed to produce a reduction in the US trade deficit with China, which he set as a primary goal.

    He repeated the incorrect statement that China is paying the duties, which in fact are paid by US companies importing goods.

    And economists say much of the intended effect of the duties in reducing imports, has been offset by the devaluation of China’s currency, which makes goods cheaper for importers.

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  • SE Asia Stocks: Most end lower, Vietnam hits near 2-month high

    SE Asia Stocks: Most end lower, Vietnam hits near 2-month high

    Most Southeast Asia stock markets closed lower on Tuesday while Vietnam rallied for the second straight session to its highest level in nearly two months. Washington and Beijing will commence high-level trade talks this week to negotiate an end to their bitter trade dispute. Despite positive responses from both sides, the sailing of two U.S. destroyers near the disputed South China Sea, and China’s subsequent anger over the move appeared detrimental to negotiations.

    The Indonesian index fell the most in the region, closing 1.1 percent lower in its worst session this year, weakened by a slump in financial and telecom stocks.

    The country’s biggest bank by market value, Bank Central Asia, shed 0.6 percent, whereas Telekom Indonesia lost 2.8 percent.

    The Philippine benchmark slipped 0.6 percent, dragged by consumer and industrial stocks. Meanwhile, the country’s trade deficit narrowed in December as imports tumbled for the first time in a year.

    The stock index has outperformed other exchanges in the region so far in 2019, gaining about 7.3 percent.

    “We are mildly concerned about the surprise pullback in capital goods and raw materials. If this continues, this could show that recent aggressive tightening by the BSP (Bangko Sentral ng Pilipinas) is starting to bite into investment appetite, hampering the nascent investment-driven growth story that we have witnessed of late,” ING said in a note.

    Meanwhile, Vietnam benchmark rose for the second straight session and ended up 1.2 percent at its highest level since Dec. 17, with real estate and consumer stocks leading the gains.

    Property developer Vingroup JSC scaled 4.9 percent, while Saigon Beer Alcohol Beverage Corp jumped 1.9 percent.

    Vietnam was also chosen to host this month’s summit between U.S. President Donald Trump and his North Korean counterpart KimJong Un.

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  • RM25b export target for wood-based products achievable: Malaysian Council

    RM25b export target for wood-based products achievable: Malaysian Council

    The Malaysian Timber Council (MTC) remains optimistic that Malaysia will achieve its RM25 billion export target for wood-based products by 2020 despite a fragile global trade and economy caused by the US-China trade war. “We believe that the RM25 billion target is still achievable notwithstanding the potential headwinds that may come along the way, for instance Brexit, US-China trade war and other regional conflicts,” MTC CEO Richard said.

    “The good part about the timber and wood industry is that a lot of Malaysian businesses are very innovative, and they respond to changes quite quickly, in terms of adjusting to the changing needs and demands and also the challenges of the industry as well as economy,” he added.

    To recap, the Ministry of Plantation Industries and Commodities (MPIC) had in 2017 reduced the wood-based exports target from RM53 billion to RM25 billion due to shortage of raw materials.

    Yu said the RM25 billion target is more “realistic”, noting that the previous RM53 billion target was first formulated prior to the 2008 global financial crisis.

    “The planning and the formulation of the strategy was before that (the financial crisis). At that point of time, even in terms of the exchange rate was pretty favourable to us from ringgit terms perspective.

    “And looking at last year’s numbers, I think to get another incremental of about RM1 billion-RM2 billion for another three years should be quite realistic,” he added.

    The timber industry’s contributed RM23.2 billion to the government coffers in 2017, up 4.8% compared to last year’s figures.

    As at August 2018, the export figures had reached RM14.57 billion, in which the wooden furniture, plywood, sawn timber, fibreboard and builders’ joinery and carpentry are the main revenue generators for the sector.

    However, Yu noted that there is concern raised by the industry players on the potential Chinese products dumping.

    “That will obviously have an effect on our exports. But I believe the Ministry of International Trade and Industry is monitoring this issue closely,” he said.

    At present, Malaysia exports timber and timber-based products in over 160 countries.

    Moving forward, Yu said the country’s commitment in maintaining its forest cover at above 50% will ensure that the timber industry remains sustainable in the long-term.

    The MTC was established in January 1992 to facilitate the local industry players and promote the development and growth of the timber industry.

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  • US retail sales expected to grow at slower rate in 2019

    US retail sales expected to grow at slower rate in 2019

    US retail sales are expected to climb between 3.8 per cent and 4.4 per cent to more than US$3.6 trillion ($4.97 trillion) in 2019, according to data from the National Retail Federation (NRF). The predicted rise in retail sales, which is excluding automobile dealers, gasoline stations and restaurants, however, would be less than the 4.6 per cent growth in 2018, citing threats from an ongoing trade war, the volatile stock market and the effects of the government shutdown.

    NRF said in August of last year it expected 2018 retail sales to be up at least 4.5 per cent.

    The retail industry group says the 2018 figure is its preliminary estimate for retail sales last year, pending the release of December data from the Commerce Department that was stalled from being announced during the government shutdown.

    Matthew Shay, NRF president and CEO, said the biggest priority is to ensure that the economy continues to grow and to avoid self-inflicted wounds.

    “It’s time for artificial problems like trade wars and shutdowns to end, and to focus on prosperity not politics,” Shay said.

    Shay said despite fears in the industry that a trade war in China or an economic slowdown might impact consumer spending, they believe the underlying state of the economy is sound.

    “More people are working, they’re making more money, their taxes are lower and their confidence remains high,” he said.

    Preliminary estimates, according to the NRF, show that retail sales during 2018 grew 4.6 per cent over 2017 to US$3.68 trillion ($5.08 trillion), exceeding NRF’s forecast of at least 4.5 per cent growth.

    The figures include online and other non-store sales, which were up 10.4 per cent to US$682.8 billion ($942.6 billion). That met NRF’s forecast of 10-12 per cent online growth, and online is expected to grow in the same 10-12 per cent range again this year. The numbers exclude automobile dealers, gasoline stations and restaurants.

    Growth of between 3.8 per cent and 4.4 percent would result in total 2019 retail sales of between US$3.82 trillion and $US3.84 trillion ($5.27 trillion to $5.3 trillion). Based on growth of 10-12 per cent, online sales would total between US$751.1 billion and US$764.8 billion ($1.03 trillion and $1.05 trillion), which are included in the total.

    The 2018 results are based on Commerce Department data up through November but include NRF estimates for December because the agency was closed during the recent government shutdown and has not yet released December figures.

    The NRF said the results are subject to revision once December numbers become available, and government numbers are revised again each spring regardless of the shutdown.

    “We are not seeing any deterioration in the financial health of the consumer,” said Jack Kleinhenz, NRF chief economist.

    “Consumers are in better shape than any time in the last few years,” Kleinhenz said. “Most important for the year ahead will be the ongoing strength in the job market, which will support the consumer income and spending that are both key drivers of the economy.”

    Kleinhenz said the bottom line is the economy is in a good place despite the ups and downs of the stock market and other uncertainties.

    “Growth remains solid,” he said.

    NRF said it expects the overall economy to gain an average of 170,000 jobs per month, down from 220,000 in 2018, and that unemployment – currently at 4 per cent – will drop to 3.5 per cent by the end of the year. Gross domestic product is likely to grow about 2.5 per cent over 2018.

    Kleinhenz said inflation and interest rates are expected to remain low this year and that retail sales have been helped by recent reductions in gasoline prices.

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  • Foreign buying on Bursa slows to RM146.8m last week

    Foreign buying on Bursa slows to RM146.8m last week

    Foreign funds snapped up RM146.8 million net of local equities last week during the holiday-shortened week. “Foreign funds resumed their entry into stocks listed on Bursa for the fourth consecutive week albeit at a slower pace compared to the preceding week,“ MIDF Research said in its weekly fund flow report.

    It said last Monday saw a moderate net inflow of foreign funds worth RM37.3 million, extending the daily buying streak to nine days. However, this foreign buying spree came to an end on the next day as international funds sold RM12.8 million net, coinciding with the local bourse’s 0.4% slide to settle at 1,690 points.

    Risk appetite was weak on Tuesday following the overnight 2.8% slump in Brent crude oil price combined with the anticipation ahead of the Sino-US trade negotiations.

    Notwithstanding this, offshore investors returned to Bursa on Wednesday at a tune of RM65.1 million net, the highest foreign net inflow during the week.

    The catalyst responsible for the boost of foreign net inflows on that day was 0.4% increase in Brent crude oil price as US President Donald Trump’s administration slaps sanctions on Venezuela’s state-owned oil company while Saudi Arabia had a deeper output cuts in January than initially pledged.

    The momentum of foreign net inflows continued on the last trading day of the week as foreign investors bought RM57.2 million net.

    “We opine that the sentiment was partially supported by the Malaysia’s exports in 2018 which grew by 6.7% to reach almost RM1 trillion. Meanwhile, the FBM KLCI was little changed, declining by less than 1% on Thursday ahead of the long weekend and festive season.”

    The month of January 2019 saw a foreign net inflow of RM1.03 billion or US$249.3 million, the first monthly net inflow since September last year.

    “In comparison with the three other Asean markets we monitor, Malaysia has the second lowest foreign net inflow while Indonesia leads,“ said MIDF.

    Foreign investors were the only group which saw a weekly increase in average daily traded value, jumping by 21.0% to remain above RM1 billion for the second week running.

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  • Asia stocks quiet, dollar firm after upbeat US job data

    Asia stocks quiet, dollar firm after upbeat US job data

    Asia stocks hovered near four-month highs on Monday after a mixed performance on Wall Street at the close of last week, while the dollar firmed against the yen following strong US job and manufacturing data. MSCI’s broadest index of Asia-Pacific shares outside Japan was almost flat. It had scaled a four-month peak on Friday along with a surge in its global peers.

    Trade was subdued with many of the region’s markets closed for the Lunar New Year. China’s financial markets are closed all week, while those in South Korea are shut until Thursday.

    Hong Kong’s Hang Seng, which is trading for only half a day, edged up 0.2%.

    Japan’s Nikkei added 0.5%.

    On Wall Street on Friday optimism from a surge in January US job growth was offset by a weaker-than-expected outlook from Amazon.com Inc that battered retail stocks. The Dow nudged up 0.26% while the Nasdaq shed 0.25%.

    “Key points for the markets this week will be how the remaining US corporate earnings releases turn out, and whether they are in line with recent upbeat data,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

    “While corporate earnings and fundamentals remain key, political developments, notably the US-China trade situation, remain potential risk factors,” he said.

    A US Labor Department report on Friday showed nonfarm payrolls jumped by a stronger-than-forecast 304,000 jobs last month, the largest gain since February 2018.

    That report, along with better-than-expected ISM manufacturing activity numbers for January, pointed to underlying strength in the world’s biggest economy.

    “After last week’s risk appetite revival, the data pulse and the tone of Fed speakers will be important. For the Goldilocks market to continue, we need to find a delicate balance between improving data and still-neutral central banks,” strategists at ANZ wrote.

    Global equity markets performed strongly last week after the Federal Reserve pledged to be patient with further interest rate hikes, signalling a potential end to its tightening cycle.

    Friday’s robust economic data triggered a sharp rebound in US Treasury yields, in turn lifting the dollar.

    On Monday, the US currency was a shade higher at 109.555 yen after advancing 0.6% on Friday.

    The euro was little changed at $1.1456 after getting pulled back from a high of $1.1488 on Friday.

    The Australian dollar was mostly steady at $0.7244 after slipping 0.4% the previous session.

    The benchmark 10-year U.S. Treasury yield was at 2.686% after climbing nearly 6 basis points on Friday to pull away from a four-week low of 2.619% earlier last week.

    West Texas Intermediate (WTI) US crude oil futures extended Friday’s rally and were last up 0.3% at $55.42 per barrel.

    On Friday, WTI futures had rallied 2.7% on the upbeat US job report, signs that Washington’s sanctions on Venezuelan exports have helped tighten supply and data showing US drillers cut the number of oil rigs.

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  • Vietnam per capita income matches Malaysia’s 20 years ago

    Vietnam per capita income matches Malaysia’s 20 years ago

    Vietnam’s recent economic achievements notwithstanding, much effort is needed for it to close the gap with other countries, a minister has said. Minister of Planning and Investment Nguyen Chi Dung said at a conference Wednesday that while Vietnam’s GDP per capita had surged by 27.4 times in the last 30 years to almost $2,590 last year, Malaysia had achieved this figure 20 years ago.

    Thailand had done so 15 years ago and Indonesia 10 years ago.

    The main limitations of its economy were low labor productivity, economic efficiency and competitiveness, and the country also faced the risk of being stuck in the middle-income trap.

    According to the 2018 Vietnam Annual Economic Report, average productivity per worker was VND60.73 million ($2,600) in 2017, lower than that of China, Japan, the Philippines, Thailand, and Cambodia.

    Currently the country also faced challenges like the U.S.-China trade war, the minister said.

    For these reasons, institutional reforms were necessary to achieve a more sustainable economy, he noted.

    Macroeconomic stability and high economic growth with innovation in science and technology were imperative.

    The private sector had to remain one of the pillars of the economy in future, Dung said. “If Vietnam doesn’t catch the 4.0 train, the gap between it with other countries will become wider. Vietnam needs to narrow that gap.”

    Vietnam’s GDP has grown at 6.8 percent a year on average for the last 20 years, and the economy has grown 39 fold in the period to $245 billion last year.

    Growth last year was 7.08 percent, the highest in a decade.

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  • Vietnam’s exports slow down

    Vietnam’s exports slow down

    Vietnam’s exports fell by 1.3 percent year-on-year in January to $20 billion as phone shipments fell sharply. Exports of phones were 27.5 percent down at $2.9 billion, according to the General Statistics Office. Computer and electronics exports fell 5 percent to $2.3 billion.

    But exports of textiles and garments rose by 6.7 percent to $2.7 billion, footwear by 12.8 percent to $1.6 billion and machinery and equipment by 15.2 percent to $1.4 billion.

    The U.S. was the biggest importer ($4 billion) followed by China ($3.8 billion) and the EU ($3.2 billion). The country’s Southeast Asian neighbors only accounted for $2 billion.

    Meanwhile, Vietnam’s imports rose by 3.1 percent to $20.8 billion.

    Last year exports were worth $244.72 billion, up 13.8 percent, and imports cost $237.51 billion, giving Vietnam its highest trade surplus ever of $7.21 billion.

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  • Sandro parent unphased by trade spat

    Sandro parent unphased by trade spat

    The parent of affordable-luxury fashion labels Sandro, Claudie Pierlot and Maje appears unphased by the Sino-US trade spat, vowing to continue its expansion in the region. SMCP’s CEO Daniel Lalonde said in an interview that the company plans to continue to open new stores in Mainland China and invest in e-commerce across the region.

    “From our perspective, everything is still intact [in China]. Any slowdown in our business is related to the comparison base … and we still expect to grow that market by more than 20 per cent this year,” Lalonde said. “We’re still confident on the region.”

    France-based SMCP is controlled by Chinese company Shandong Ruyi. This week it reported an 8.1 per cent increase in fourth-quarter sales to €276.1 million.

    SMCP has doubled its annual sales during the past four years, reaching €1 billion last year, largely due to rapid expansion in Mainland China. Asia is now SMCP’s third-largest geographic market behind France and the rest of Europe, with China accounting for the bulk.

    However, he said sales in Hong Kong were “a little softer” as a result of currency fluctuations between the Hong Kong dollar and the renminbi.

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  • Bursa Malaysia’s Q4 earnings fall 6.2% to RM51.9m

    Bursa Malaysia’s Q4 earnings fall 6.2% to RM51.9m

    Bursa Malaysia Bhd’s net profit in the fourth quarter ended Dec 31, 2018 (Q4FY18) was down by 6.2% to RM51.9 million, from RM55.27 million a year ago, mainly due to lower contribution from the securities segment.

    Revenue for the quarter declined 8.7% to RM128.9 million, compared with RM141.2 million in the previous corresponding quarter.

    The exchange has approved a second interim dividend of 11.6 sen per share for FY18, amounting to about RM93.7 million which is payable on Feb 28, 2019. With that, the total dividend (including special dividend) declared for the year amounts to 33.6 sen per share.

    Bursa’s full-year net profit was slightly up by 0.4% to RM224.04 million, from RM223.04 million a year ago, while revenue decreased by 1.2% to RM550 million, against RM556.8 million previously.

    For the year under review, securities market trading revenue increased 2.4% to RM265.8 million from RM259.6 million in FY17, mainly due to higher average daily trading value (ADV) for securities market’s on-market trades (OMT) in FY18.

    However, non-trading revenue saw a marginal decrease of 0.1% to RM165.9 million from RM166.1 million in FY17 due to lower listing and issuer services revenue.

    Bursa CEO Datuk Seri Tajuddin Atan said despite market volatility and challenging global economic environment, the exchange’s financial performance remained resilient.

    “Throughout the year, to create a more facilitative environment, we continued implementing initiatives to further enhance the vibrancy and liquidity of the market,” he added.

    At 2.35pm, Bursa’s share price was trading 7 sen or 0.9% lower at RM7.32 on 751,900 shares done.

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  • Asia shares slip as China’s Huawei in legal hot water; focus on Sino-US talks

    Asia shares slip as China’s Huawei in legal hot water; focus on Sino-US talks

    Asian shares stumbled on Tuesday and the dollar hovered near two-week lows as prospects for a long-awaited Sino-US trade deal was dealt another blow after the United States levelled sweeping criminal charges against China’s telecom giant Huawei. MSCI’s broadest index of Asia-Pacific shares outside Japan got off to a shaky start with losses accelerating as other regional markets opened.

    Australia and New Zealand led the losses, with their benchmark indices down 0.7% each while South Korea’s KOSPI was off 0.3%. Chinese shares opened in the red too, with the blue-chip index down 0.2%.

    Japan’s Nikkei slid about 1%. US stock futures also lost ground following from a torrid overnight session on Wall Street, with E-Minis for the S&P 500 down 0.4%.

    Investor sentiment, already shaken by pessimism over global growth, took another hit after the US Justice Department unsealed indictments against China’s top telecom equipment maker, Huawei, accusing it of bank and wire fraud to evade Iran sanctions and conspiring to steal trade secrets from T-Mobile US Inc.

    The jolt to Huawei could undermine prospects for a trade deal between the economic giants as markets nervously await a fresh round of trade talks with Chinese Vice Premier Liu He set to meet US officials on Wednesday and Thursday.

    Further complicating matters, China triggered the legal process on Monday for the World Trade Organization to hear Beijing’s challenge to US tariffs, and berated the United States for blocking the appointment of judges who could rule on it.

    Souring US-China relations roiled global markets for much of last year, and have kept investors on the back foot this month. The trade war’s broadening impact on world growth is one reason the US Federal Reserve has signalled it will be patient on policy after raising rates four times in 2018.

    Overnight, markets got a reminder of the potentially damaging economic impact of the Sino-US trade war as Wall Street stocks were hit by profit warnings.

    The losses came as shares of Caterpillar and Nvidia Corp nosedived after the two manufacturers joined a growing list of companies cautioning about the crippling effects of softening Chinese demand.

    Caterpillar plunged more than 9% for its worst single-day drop since August 2011 while chipmaker Nvidia slid 13.8%.

    “Both companies are seen as industry bellwethers and their disappointing results provide further evidence that this time China’s slowdown is for real,” said Rodrigo Catril, Sydney-based strategist at National Australia Bank.

    The downbeat global growth impulse mean investors will look for further confirmation the Fed will pause its rate-hike cycle at a two-day policy meeting ending Wednesday.

    Overnight on Wall Street, the Dow and S&P 500 each closed down 0.8% and the Nasdaq was off more than 1%.

    WARNING BELLS

    Worryingly, earnings at China’s industrial firms too shrank in December, pointing to more troubles for the country’s vast manufacturing sector already struggling with a decline in orders, job layoffs and factory closures.

    Slowdown fears slugged the US dollar which faltered to its lowest in two weeks on Monday. The dollar’s index, which measures the greenback against a basket of major currencies, was last at 95.758.

    Against the safe haven Japanese yen, the dollar was down at 109.17, on track for a third straight session of losses.

    Markets will have more catalysts this week with over a 100 of the S&P500 companies reporting results, including Amazon, Apple and Facebook.

    Many economists, including the International Monetary Fund, have cut their forecasts for global growth this year citing the US-China trade war.

    “Slowdown is feeding into some acute areas of economic unease,” US investment bank Citi said in a note, citing recent disappointing factory output data out of Europe and China.

    “In some respects, markets seem to have reacted more to recent negative changes in economic data than at other points in recent decades,” it added, while noting investors are now pricing in a 1% contraction in global earnings per share (EPS) this year.

    “This would be the worst year-on-year percentage change in EPS since 2015” even though economic growth is seen much higher this year than in 2015.

    Elsewhere, Sterling dithered against the dollar ahead of voting in Britain’s parliament on Tuesday that aims to break the Brexit deadlock. It was last at $1.3148

    Oil bounced after hefty overnight losses. US crude was last up 16 cents at $52.15 a barrel while Brent gained 18 cents to $60.11.

    US gold futures hovered near a seven-month high around $1,302.3 per ounce. Spot gold was last at 1,303.3 after breaking above a key psychological barrier of $1,300 an ounce on Friday.

  • Companies, workers struggle as cracks appear in China’s economy

    Companies, workers struggle as cracks appear in China’s economy

    Cracks are opening in China’s mighty economy: investors are backing away from deals, factories are moving abroad and companies are shedding jobs. The world’s second-largest economy is losing steam, hitting its slowest growth in almost three decades last year, and flagging further in recent months. While gross domestic product grew at 6.6% in 2018 – a rate that would be the envy of most nations – China’s efforts to cut its debt mountain have weighed on the economy.

    Private businesses in particular face new hurdles as costs rise and financing becomes harder to come by, while the trade war with the United States has not helped.

    Here is a look at some of the struggles faced by Chinese companies and people:

    Game over for gamers

    Feeding China’s addiction to video games seemed an easy bet for Beijing Yixin Technology, a tech startup behind the mobile game Farm Take Home.

    The game allows players to harvest wheat, raise chickens and plant apple trees – a bucolic refuge from the pressures of urban China.

    But in real life, the tech firm has struggled to find investors.

    “In December our company’s funding ran out, we had an investment lined up, but the money never came through,” said chairman Cui Yi. “This month I arranged another investor, then he backed out too. I think we can’t hold out.”

    His company is not alone.

    Venture capital funding dried up at the end of last year. Total investment in the fourth quarter fell 13% from a year earlier, according to data from Preqin market research.

    Policymakers are partly to blame, pushing a war on debt and financial risk that has cut the funding flowing into investment firms, industry insiders say.

    Another government diktat halted new video game approvals for months – officially due to youth gaming addiction concerns – sending firms like Beijing Yixin into a deep freeze.

    Trade war

    Other companies are facing the fallout from the trade war with the United States.

    More than a handful of exporters have sought to get around US tariffs by building factories outside China, according to a review of public stock filings.

    Others are sending workers home early for Chinese New Year or cutting overtime.

    Last month China’s exports fell.

    “It has hit our profits,” Harry Shih, manager of Runfine Bearings in eastern Zhejiang province, said of the trade war.

    Washington slapped 25% taxes on many types of ball bearings in July. Shih said he had shared the cost increase with his customers, roughly half of whom are from the US.

    “Business is going down for most companies including factories. Like me they have the same problems, profits are going down” as costs rise, said Shih.

    Job crunch

    Official data shows unemployment at a stable rate, rising slightly to 4.9% last month. But independent data paints a different picture.

    In October-December advertised tech positions fell by 20% from a year earlier, after declining 51% in the third quarter, according to data from Zhaopin, China’s largest recruitment website and Renmin University.

    China’s economy “faces downward pressure, and to some extent this pressure will be transmitted to the job market,” said Meng Wei, a spokeswoman for the National Development and Reform Commission, China’s state planner.

    A lawyer who consults on labour disputes, Guo Xuehai of Beijing Zhonghai Law Firm, said, “there are definitely more employees coming for help than before,” but added this was usually the case at this time of the year.

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  • Vietnam makes debut in Bloomberg innovative economy index

    Vietnam makes debut in Bloomberg innovative economy index

    Vietnam has for the first time entered the Bloomberg Innovation Index of the world’s 60 most innovative economies. It scored 45.92 out of 100 in the 2019 index. Other new entrants include India, Mexico and Saudi Arabia. Bloomberg said: “The index analyzes dozens of criteria using seven metrics, including research and development spending, manufacturing capability and concentration of high-tech public companies.”

    Vietnam’s highest rankings were 34th in high-tech density and 39th in patent activity. It ranked a lowly 59th in productivity.

    Its productivity in 2017 was among the lowest in Asia despite growth, according to the Vietnam Annual Economic Report released by the Vietnam Institute for Economic and Policy last year.

    An average Vietnamese worker made VND60.73 million ($2,600), lower than the rate for Cambodia, Indonesia Malaysia, the Philippines, and Thailand, it said.

    In the Bloomberg index, South Korea retained its top place from last year and was followed by Germany, Finland, Switzerland, and Israel.

    Other Southeast Asian countries were Singapore in sixth place, Malaysia (26th) and Thailand (40th).

  • China will flood US with its product

    China will flood US with its product

    Turnover in the Chinese retail industry will eclipse that of the US later this year, according to analyses. “Nothing is going to stop them,” said one commentator as new data emerged showing a fast-narrowing gap between the two markets. The fact China would overtake the US was never in doubt – China’s population of 1.4 billion is vastly more than the US population of 325 million.

    According to data from eMarketer, total Chinese retail sales will grow 7.5 per cent this year to reach US$5.636 trillion. But growth in the US is likely to be significantly slower at just 3.3 per cent, reaching $5.529 trillion.

    Not even the slowdown in China’s economic growth is likely to affect the figures – a rebound may even hasten the milestone.

    GlobalData Retail MD Neil Saunders says a big factor in the speed of China’s retail growth is the way the industry has evolved. In the US, retailers were established well before the advent of the internet meaning adapting to the new online environment has meant managing their brick-and-mortar stores while pursuing growth online.

    But in the US, the market began to mature in an online world, and online spending there will account for more than 30 per cent of total retail sales this year. In the US, online is predicted to account for less than 11 per cent.

    “The US retail environment grew up in a very different era,” says Saunders. “It grew up before the internet. There is a historical difference and an evolutionary difference, which has created this very different backdrop to retail.”

    The rapid rise of the Chinese retail industry has been fuelled by rising incomes across the country, the urbanisation of the population and a burgeoning middle class.

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