Would a new trade war launched by the US government make America lose again? Indeed. And what could be the economic and trade consequences for US trading partners?
China’s influence on world markets far outweighs the degree of integration of its own banks and financial markets with the rest of the world. While the country has only gradually eased controls on its capital account and foreign exchange markets, illicit flows of capital are playing an outsized role in some overseas markets and industries. This will change. But how and when? The “New Silk Road” project underlines Beijing’s ambition to keep promoting globalization, in a sharp contrast with the rise of protectionism in the US. But the pace of reforms needed to push that process forward has been slowing. Most than anything, Chinese authorities fear the volatility associated with a higher degree of integration.
The Chinese initiative continues to raise many questions and no less controversial issues four years after its creation. What is its exact nature? What economic and political goals does it hide?
Working class Americans in midlife's mortality rate, after 100 years of declining, has turned the wrong way or at least flattened out. This is not happening to other groups in the US. It’s not happening to Hispanics. It’s not happening to African-Americans. And it’s not happening in any other rich country in the world. Angus Deaton tried to make sense of a trend closely associated with the rise of populism in the US.
As reported by the media, US Republicans in the House of Representatives have launched an initiative to lower corporate tax to 20%, instead of 35% today, one step further in the tax competition between countries. The Trump administration seems to support the project. Donald Trump himself even mentioned the possibility of lowering this rate to 15%. As worrying as is seems for the United States' trading partners, this drop isn't even the most important part of the reform. In reality, the measure forms part of wider radical project that will give corporate tax the same features as a tax that doesn't exist in the United States, namely, VAT or value-added tax, probably the most innovative and popular tax (as far as governments are concerned) since the 1950s.
The term university covers a wide range of institutions. In time, this diversity could narrow down to two main types of universities: a local model, with institutes and Bachelor degrees related to regional development; a global model, including prototypes such as Harvard or Oxford, and emerging players in Europe or China. These world-class universities can be seen as a new type of universal power.
Different hierarchies of needs explain why, in the internet industry and other high-tech industries in China, there are both the Chinese way and the Silicon Valley way of doing business, and why some big American companies have been struggling to make headway here. High-tech sounds high-up, but for online service providers, it all boils down to understanding other people’s ways of thinking and doing things. They have to understand local governments, their employees, business partners, users and clients. Looking back, the U.S. internet giants that failed were simply out of tune with the Chinese market. They didn’t clearly see the importance of understanding Chinese culture; they talked to the wrong people in the wrong ways about the wrong things.
The slowdown in international trade and the digital revolution converge to shake up global value chains, a paradigm for international trade since approximately 25 years. A value chain, it should be recalled, encompasses all of the activities that form a product or service, from its conception to its use by the end consumer. The globalization of value chains that began in the early 1990s opened a cycle that now seems to bend. On these different links, the way value is created changes greatly. Western companies draw lessons by changing their business model. But emerging countries have also entered the game. Ultimately, maybe only a few winners with a global corporate status will be left.
The sinking of the British steel industry has resulted in confusing, and sometimes contradictory debates. The politicization of these challenges tends to obscure questions having primarily to do with industrial strategies. Strategies of the concerned companies of course, but also those of States and Europe.
Since Reform and Opening Up began in 1978, China has witnessed exponential double-digit GDP growth. While the coastal regions provided most of China's GDP growth, central and western China were quickly outpaced, as they lacked both the openness and the infrastructure needed to adopt this model. Coastal-inland inequalities are now closing the gap.
Clextral is an engineering company located in Firminy near Saint-Etienne, France. It employs 275 people including 80 engineers, sells its machines in 88 countries and has subsidiaries and offices on every continent. What's the secret?
Articles analyzing why there's no Chinese innovation are all over the place. Meanwhile, the situation is changing at a rapid pace. How do Chinese entrepreneurs move from imitators to innovators? To better understand these issues, our Chinese edition invited a number of pioneers and observers at the front-line of domestic and international innovations.
Today, manufacturers operate in a harsh competitive environment. How can they maintain and develop their competitive edges? What kind of industrial policy can help them when facing this challenge?
This is the other side of globalization: more and more cases of misunderstanding. However, it is not impossible to avoid them. All you need are a few keys that allow you to step into the other person's shoes. Here are ten such keys, covering some especially sensitive points met in the business world.
Is the global crisis behind us? The divergent development of major emerging countries, Europe and the United States reminds us that despite a strong tendency for unification during the past two decades, despite our growing interdependence, the world economy is still highly fragmented. Under the circumstance, it doesn't make sense to draw a general picture without taking a closer look at these differences: between emerging and advanced countries, between the United States and Europe, and even within Europe itself.
Delocalization and automation are now impacting the service sector, with noteworthy consequences on employment in developed countries. Even in the case of highly intellectual activities, a number of inherent tasks can be codified and pre-programmed; some of the processes involved can be automated just like similar industrial applications. The tasks can be automated or executed remotely. Notwithstanding, not all services can be delocalised. It is in the interest of any territorial entity (conurbation, region, city…) seeking to define its strategy for future development or reconversion, to identify and indeed reinforce those services that offer clear competitive edges.
You may not know Hon Hai, but it is to produce 70% of all iPhones 6. It also operates the largest factories on Earth. Terry Gou, founder and chairman, based his success on cheap labor costs as well as audacious merging strategies. Will the rise of automated factories mean the end of this success story, and more broadly the end of China as the world factory? As a matter of fact, Mr. Gou is fond of robots, and he won't be the last to launch an automated factory. But he may need Chinese arms for a while. Here is why.
The African digital boom has already begun. McKinsey estimates that the contribution of the Internet to the annual GDP of Africa could rise from $18 billion in 2014 to $300 billion in 2025. Yet, all the countries are not addressing the digital wave with the same attitude.
A few decades ago, when Africa was crumbling under the burden of debt, economic forecasts were very pessimistic. But the vigorous growth of African economies has proven them wrong. Where does the African growth come from? What are its specificities? What does Africa need to be able to race with other great emerging countries?
Between planned economy and privatization, Chinese capitalism is trailblazing its original path. What will the next twenty years be like? To form an idea, we must go over the course of reforms that have been carried out so far, while taking the full measure of a major phenomenon, which should encompass 300 million more people within a few years: urbanization.