Topic Category: Economy

Speculation is growing that the U.S. economy may have already slipped into recession. If the past is any guide, politicians on the campaign trail will be tempted to blame trade and globalization for the passing pain of the business cycle.

Rising unemployment and falling output can provide fertile ground for attacks on imports and foreign investment by U.S. multinational companies. But an analysis of previous recessions and expansions shows that international trade and investment are not to blame for downturns in the economy, and may, in fact be moderating the business cycle.

Topic: Economy
Read More Comment (0) Hits: 2353



The United States attracted $180 billion in foreign direct investment in 2006. This is extremely important since inbound investment creates millions of high-wage, high-skilled American jobs that support our growing standard of living. But protectionist trends could disrupt this.

Global Funds Are Needed

In 2006, 20 bills were introduced in Congress that, if implemented, would have restricted foreign investment in the United States. What’s more, they could have prevented the Abu Dhabi Investment Authority’s $7.5 billion investment in Citigroup or the China Investment Corporation’s $5 billion injection in Morgan Stanley at the end of last year.

Topic: Economy
Read More Comment (0) Hits: 2645



World commodities prices remain high, even as they recover from a recent sell-off due to interest rate concerns. Despite the volatility that goes hand-in-hand with commodities, prices have benefited from sky-high energy markets this year and growth in China that has resulted in an almost insatiable appetite for industrial raw materials.

The Dow Jones AIG Commodity Index has trended upward since January 2002, more than doubling as of mid-May this year. Continuing instability in the Middle East and the onset of the summer travel season pushed oil over $70 a barrel earlier this year, while copper prices hit historic highs, surpassing $6,000 a ton during the first quarter.

Topic: Economy
Read More Comment (0) Hits: 2632



Many Americans fear an increasing U.S. deficit and believe it will ultimately lead to economic crisis. The facts, however, may surprise you.

By the most basic measure of economic performance—the change in real gross domestic product (GDP)—the U.S. economy performs best when current account deficits (which largely consist of the trade deficit) are high.

Topic: Economy
Read More Comment (0) Hits: 2384



Since the emergence of local, regional and national economies, there has been a constant evolution in the stages of cultural and economic development. Globalization is another step in that evolution. It is not a unique event just bursting onto the scene, but rather, the 21st century version of a predictable age old dynamic. Yet due to the accelerated pace at which change now occurs, a backlash is growing and supported by a variety of groups.

Topic: Economy
Read More Comment (0) Hits: 2527



New research and analysis reveal that companies linked to the global marketplace perform better than those that only operate domestically. And the employees and communities of globally-engaged firms prosper more. But the benefits don’t just apply to exporters.

The data reveal that companies that import, invest abroad or are recipients of foreign direct investment (FDI) also prosper more than their domestically focused counterparts. And, the analysis compares apples to apples: companies of the same size in the same industries. This research is likely to persuade many firms to expand their horizons. How will it affect your strategic plan?

Topic: Economy
Read More Comment (0) Hits: 2749



On several occasions since World War II, and currently, the U.S. economic locomotive has been instrumental in pulling the rest of the world out of periods of poor economic growth. As this occurs, global markets improve, creating new opportunities for traders and investors. Today, new opportunities are emerging in Europe, Latin America and Asia, as well as risks that may affect your company’s bottom line.

Topic: Economy
Read More Comment (0) Hits: 2223



In this extremely competitive global economy, financing is not only a necessary part of the export process, but also a very important tool. Your ability to offer your foreign customers liberal payment terms can provide the necessary edge to sell more goods and services worldwide. But, in doing so, it’s essential to accurately weigh the risks. This could mean the difference between international success and failure.

Topic: Economy
Read More Comment (0) Hits: 2962



With amazing, even surprising speed, the economic crisis that impacted many Asia Pacific countries during the late 90’s has begun to fade. To varying degrees, the countries have begun the struggle toward recovery. What does this mean for your business?

The swift improvement in Asian economies is certainly encouraging news for U.S. exporters. And while not all countries are expected to increase demand immediately, the overall growth will surely support the continuing economic expansion in the United States.

Topic: Economy
Read More Comment (0) Hits: 2547



Asian growth is projected to increase this year, signaling a departure from negative trends inflicted by the Asian crisis. As regional growth rises, U.S.-Asian trade will move into high gear. But that’s not all.

Japan, which has not yet escaped economic malaise, also should benefit from more economically vibrant neighbors. Furthermore, as the world’s second largest economy and the United States’ third largest export destination, Japan represents a huge market. And although its economy is predicted to remain flat, it continues to offer a variety of export, import, and investment opportunities you may wish to consider.

Japan’s Economy Is Struggling

Among other problems, Japan is trying to recover from high levels of debt and low levels of confidence in the financial sector caused by the bursting of the economic bubble in the late 1980s and early 1990s. Additionally, many Japanese sectors, especially transportation, construction, labor, power, telecommunications and energy, are highly overregulated.

Consequently, competition has been constrained and inbound investment has been limited. In response, the Japanese government has taken strong steps to stimulate the economy and lighten the regulatory burden. According to the office of the U.S. Trade Representative, the Japanese government estimates that if deregulation plans are fully implemented, by 2003 Japan’s gross domestic product (GDP) will grow by an additional 0.9% annually.

Japan Represents a Huge Market

Japan’s GDP per capita exceeds $29,000. This is slightly less than the United States’ $31,000, and 38 times more than China’s. Due to the purchasing strength of Japan’s 126 million consumers, U.S. exports there, although down, are still tremendous as compared to other markets.

For example, U.S. exports to Japan last year reached almost $58 billion. Although this is down from its high of $67.5 billion in 1997, it’s still just 10% less than all U.S. exports to the Newly Industrialized Countries (NICS), and more than a third of the total U.S. exports to the Pacific Rim.

U.S. Technology and Service Firms Are Very Competitive in Japan

U.S. high-tech companies, primarily those producing computers, semiconductors, software, pharmaceuticals, medical devices, and aviation products, are extremely competitive in Japan. And many of these large firms have established a solid presence there.

As a result, these firms have learned what it takes to introduce new products quickly. Smaller, new-to-market U.S. firms with innovative technology are often able to find an agent or joint venture partner and begin exporting to Japan with few regulatory hurdles.

Through foreign direct investment, U.S service companies are gaining a greater foothold in Japan. In fact, U.S. providers of retail, entertainment, internet, franchise, restaurant, hotel, marketing, and design services are finding Japan an accommodating market.

U.S. Exporters of Agricultural and Consumer Goods Remain Optimistic

Japan must continue to increase its imports of processed foods to compensate for declining agricultural labor output, according to the U.S. Department of Commerce. This means U.S. exporters of processed food stand to benefit.

Additionally, U.S. suppliers of consumer goods are making Japanese inroads through new marketing channels, including direct marketing, private label, discount shopping and foreign-owned retail stores.

Export Opportunities to Consider

The U.S. Department of Commerce has identified products in strong demand in Japan. These include:

  • Electronic components & power equipment
  • Software, computers & peripherals
  • Telecommunications equipment
  • Automobiles
  • Medical equipment & devices
  • Auto parts & accessories
  • Building products
  • Cosmetics
  • Dietary supplements
  • Machine tools & metalworking equipment
  • Scientific equipment & services
  • Pollution control equipment & services.

Trade Barriers Can Be Complex

Reportedly, many U.S. firms have found it difficult to obtain information on Japanese duties and taxes, as well as standards, regulations and other barriers. And the process often can be cumbersome, slow and discouraging.

However, steps have been taken by Japanese authorities to simplify the process. Nevertheless, it is recommended that U.S. firms work closely with a Japanese partner to obtain guidance and an understanding of the culture and business environment.

Asia Appears Back on Track

Asian output no longer is falling. Improvements in the region’s trade surplus, combined with an easing of local monetary and fiscal policies, have resulted in growth. Thus, all regional economies, except Japan’s, are predicted to achieve annual GDP growth in the 0% - 3% range in the year 2000.

Korea is recovering well, and in some cases, leading the pack. China, which partially has been insulated from the Asian crisis, has taken steps to stimulate its economy. The result: an increase in domestic demand that has somewhat offset a deteriorating trade balance. By mid-1999, however, China’s currency may be allowed to gradually depreciate — which may make your exports less price competitive.

This article appeared in April 1999. (CB)
Topic: Economy
Comment (0) Hits: 2464



Page 10 of 12

Quick Search

Stock Watch

FREE Impact Analysis

Get an inside perspective and stay on top of the most important issues in today's Global Economic Arena. Subscribe to The Manzella Report's FREE Impact Analysis Newsletter today!