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“China is also a much larger economy than it was, accounting for more of the world’s manufacturing. It had 31% of global manufacturing output in 2022, and 14% of all goods exports, according to World Bank data. Two decades earlier China’s share of manufacturing was less than 10% and of exports less than 5%.” #manufacturing #globaleconomy #globalmanufacturing #usreshoring #regionsrecruiting

📈 Shift in Asia's Supply Chains Korea and Taiwan's exports to the US have surpassed their exports to mainland China for the first time in 20 years, as per Goldman Sachs Research. This marks a significant pivot in trade dynamics, influenced by China's evolving economic landscape. Key Points: 1. China's labour costs have surged from 30% to nearly 70% of US levels since 2000, reflecting a move up the value chain 2. A strategic shift towards self-sufficiency has seen China reduce intermediate goods imports (notably chemicals, automobile parts, and electronic components), favouring final consumer goods instead 3. Post-pandemic supply chain diversification and the US’s resilience initiatives are steering trade flows away from China, especially in technology and microchips 4. The US's increasing demand for AI chips and the relocation of tech assembly lines are enhancing exports from Korea and Taiwan, highlighting a regional trade realignment Why this matters: With China's rising labour costs and strategic pivot towards self-sufficiency, the cost and availability of intermediate goods like chemicals and components vital for fertiliser production may fluctuate, while increased trade flow from Korea and Taiwan to the West may influence trade routes. Stay ahead by diversifying your supply sources, ensuring consistent access to quality fertilisers. #SupplyChain #GlobalTrade #EconomicShifts #AsiaMarketTrends

Chinese electronics and other consumer goods sectors are experiencing a degree of overcapacity, but that’s likely temporary, the EIU said. china overall manufacturing overcapacity has peaked as global demand picks up in consumer sectors, the Economist Intelligence Unit said, predicting trade tensions will persist due to Chinese companies’ rising competitiveness. “We consider the worst of China’s excess industrial capacity to have already passed,” the EIU said, adding that a slowdown in investment by firms seeing lower profitability will lead to slower capacity growth. The report feeds into a global debate over the idea that China’s industry is experiencing unusual overcapacity that’s depressing prices, with US Treasury Secretary Janet Yellen and German Chancellor Olaf Scholz pressing Beijing on the issue. Read more at: https://lnkd.in/gsieCNyK

China faces a confluence of economic headwinds. The anticipated surge in emerging markets, intended to offset trade friction with the US and EU, hasn't materialized. While high-tech and advanced manufacturing sectors have seen growth, traditional manufacturing continues to shrink.This, coupled with the housing market's third consecutive year of decline, creates a growing economic malaise. Soaring youth unemployment, now exceeding 17%, threatens social stability. President Xi's current Sino-African summit presents an opportunity to solidify China's presence in these markets and find outlets for its traditional manufacturing sector. However, the landscape is shifting. African leaders, like President Cyril Ramaphosa of South Africa, are seeking better trade deals and greater returns from Chinese projects. (https://lnkd.in/dzfMWk9G) China's government and businesses will need a more balanced approach to develop sustainable partnerships. These are challenging times for the Chinese economy, with profound implications for global markets. The path forward will significantly influence not only global economic momentum but also geopolitical dynamics.

A different sort of China shock Even so, “the concerns are more fundamental” now, Autor said, because China is competing with advanced economies in cars, computer chips and complex machinery—higher-value industries that are viewed as more central to technological leadership. China’s economy expanded 5.2% last year, a subdued rate by its standards, and is expected to slow further as a drawn-out real-estate crunch crushes investment and consumers rein in spending. Capital Economics, a consulting firm, thinks annual growth will slow to around 2% by 2030. Beijing is seeking to engineer an economic turnaround by plowing money into factories, especially for semiconductors, aerospace, cars and renewable-energy equipment, and selling the resulting surplus abroad. The result could be a world swimming in manufactured goods, and short of the spending power to buy them—a classic recipe for falling prices. #china #macroeconomy #inflation #prices #gdp #disinflation #competition #balance #automotive #manufacturing #growth #trump #us #europe

China manufacturing activity slows again. China’s #economy has showed further signs of sluggish momentum as factory activity slowed, increasing pressure on leader Xi Jinping to do more to boost growth days before Beijing opens its annual flagship political event, reports the Financial Times. The country’s official manufacturing purchasing managers’ index stood at 49.1 for February, according to figures released on Friday, slipping from a reading of 49.2 in January and in line with a Reuters analyst forecast. A reading below 50 marks a contraction from the previous month. The consistent weakness in #China’s #manufacturing #PMI—which has been below 50 every month since March bar September—comes as Beijing is due to open the annual meeting of its rubber-stamp parliament, the National People’s Congress, on Tuesday, where it will announce its targets for economic growth and fiscal stimulus this year. The downbeat reading will add to pressure on policymakers to announce stronger stimulus measures, with the Chinese Communist party leadership body, the politburo, this week indicating that more may be needed, though few expect Beijing to announce a “bazooka” package typical of the past. -- China Economic Review.

China may embrace greater stimulus, bolster manufacturing, and allow the yuan to weaken to offset the negative effects of a second Trump presidency on the Chinese economy, analysts said. The measures could limit the impact on growth to less than 1 percentage point on average each year over the course of Donald Trump’s four-year term, according to 15 of the 19 economists surveyed by Bloomberg News after the US election last week. Three predicted a 1 to 2 percentage point drop in gross domestic product, while one saw no significant impact at all.

There is no doubt that China's economy will remain the world's most powerful growth engine for the foreseeable future. Why? The main thing that brought the US economy down was wealthy oligarchs offshoring the US manufacturing base. China is a market economy, now, in large part, but it is still a command economy too. And the technocrats at the helm will not simply allow manufacturing to be wholesale raised from the ground. Some examples: China is inshoring to economically developing areas within its own borders. This also makes sense, as China's internal logisics network is the most advanced the world has ever seen. China also has more than half of all industrial robots in the world, allowing labor costs impact production less. The short of it is: China is not going to make the same mistakes the US made. This is an Asian century, and China is its beating heart. Jason Smith Beijng X #China producing for the entire world 🌎 Leading the world in many ways #CleanEnergy #eMobility #Collaboration

🚨 China's Manufacturing Crisis: The Impact of Overcapacity on the Economy 🚨 I came across this video that clearly captures the issues facing China today. 🏭 China Update YouTube News Channel highlights the serious consequences of overcapacity in China's manufacturing sector. The author explains as follows: In a recent piece by the Wall Street Journal, it was noted that while Western companies are feeling the squeeze from an influx of cheap Chinese goods, a similar struggle is happening within China itself. As Beijing continues to ramp up industrial capacity, manufacturers are facing immense challenges due to the lack of new demand. Angang Steel reported to its shareholders that its loss for January through June is projected to be nearly double compared to the same period last year. This is a clear indicator of the struggle caused by overcapacity. In response to weak domestic sales, many Chinese companies are shifting their focus to exports. 🌍 #China #Manufacturing #Economy #Overcapacity #IndustryChallenges #EconomicTrends #GlobalMarkets

The Wall Street Journal recently published an article on the potential for a new China Shock. Essentially, domestic consumption is floundering in China due to a declining population and deflating property bubble. To keep industry going, the government is subsidizing EV, low-end semiconductors, steel and aluminum, and goods manufacturers and incentivizing them to export to the global market. This was seen in the late 90's and early 00's with cheap, low-value goods, only this time China has moved up the value chain and isn't reciprocating by buying goods from the likes of the US and Germany. The investment implications here go far beyond those specific industries, with knock on effects for entire nations such as Australia. At the same time, China's situation would be an exportation of disinflation to economies that have the opposite problem. A confluence of factors that leads to some interesting opportunities across the globe both on the long and short side. https://lnkd.in/dyUsk4wC