Topic Category: Economy

An emerging narrative in 2012 is that a proliferation of protectionist, treaty-violating, or otherwise illiberal Chinese policies is to blame for worsening U.S.-China relations. China trade experts from across the ideological and political spectra have lent credibility to that story. Business groups that once counseled against U.S. government actions that might be perceived by the Chinese as provocative have changed their tunes. The term “trade war” is no longer taboo.

Topic: Economy
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While the Obama and Romney campaigns spar over who or what “saved” the U.S. automotive industry, available data indicate that the nation’s frequently overlooked Foreign-Trade Zones (FTZ) program should be in line for a lot of the credit—without bailout loan guarantees or massive federal appropriations.

Enacted by Congress in 1934, the FTZ program allows producers in the United States to bring foreign merchandise for processing into the United States at reduced or zero tariff duties. The hundreds of foreign-trade zones and subzones established across the country—such as Nissan’s two Tennessee manufacturing facilities—are considered outside U.S. Customs territory even though all health, safety, labor and other U.S. laws fully apply.

Topic: Economy
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Globalization, defined as the integration of national markets through international trade and investment, has boosted competitiveness, productivity, innovation, and living standards around the world. And that’s not all. According to Geoffrey Gertz of the Brookings Institution, a Washington, D.C.-based think tank, globalization is responsible for reducing the world poverty rate by approximately 70 million people each year since 2005, a number equal to the population of Turkey.

Topic: Economy
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What is NAFTA really about? This might seem a silly question. NAFTA is about trade, right? It’s the North American Free Trade Agreement after all.

But what if it’s not really mainly about trade at all? Thinking chiefly in terms of trade might actually obscure the real point.

Topic: Economy
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China’s current administration is in a relatively stable position having engineered an apparently successful soft landing of the economy following the global economic crisis. Its main political objectives have been maintained, while increasingly focusing on the economic transformation to ensure sustainable long-term development.

Topic: Economy
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Looking back 30 years, China was only just emerging from a planned economy. Its retail sector was strictly regulated, commodities were scarce, and a ration system was still in place.

Coupons were issued not only for food and fuel, but also for bikes and televisions. Each coupon specified an item, quantity and sometimes a retail outlet as well. Meat in particular was in short supply, rationed at 0.25 kilogram per person per month, and many Chinese had to eat vegetarian diets. Regardless of financial wealth, without coupons Chinese people simply couldn’t purchase goods.

Topic: Economy
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Today’s post-recessionary economic realities combined with dynamic global trends are impacting virtually every aspect of our lives—and certainly the profitability of our businesses. Unless organizations understand the following five realities and adapt, succeeding in the years ahead will be extremely difficult.

Topic: Economy
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As I write this commentary, the Dow Jones Industrial Average is down. But this isn’t really about the stock market; it’s about three recent news items.

First, a special session that prevented our nation’s leaders from their August recess added another $26 billion to government spending. Second, the Federal Reserve formally announced its decision to downgrade its forecasts of coming U.S. economic growth and agreed to a small amount of further monetary stimulus (called QE or quantitative easing), and implied that more might be needed. Third, Laurence Kotlikoff, Boston University professor of Economics and a former member of the President’s Council of Economic Advisors, said the U.S. is financially bankrupt and clearly argued against further fiscal stimulus spending.

Topic: Economy
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What had been a recurring story line buried in the business section has now burst onto the front page: “Economic growth slowed by trade gap,” the Washington Post reports. This headline sets the stage for a story long on generalizations: “A widening U.S. trade deficit has become a substantial drag on economic growth as the country’s exports struggle to keep pace with the swelling sums that Americans are again spending on imported goods.”

Topic: Economy
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China’s unexpectedly strong economic rebound may appear miraculous. In reality, it’s derived from a combination of that government’s huge economic stimulus package and increasingly strong domestic consumer demand. Our firm, InterChina Consulting, views Chinese consumer spending as an increasingly important contributor to the Middle Kingdom’s long-term economic growth. It also is offsetting continued weakness in global demand for China’s exports and will be the foundation for sustainable growth in the future.

Topic: Economy
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