How Did China Succeed? | Joseph E. Stiglitz
Company that owns President Trump’s Vancouver hotel files for bankruptcy
The company that owns the Trump International Hotel in Vancouver, Canada, has filed for bankruptcy, according to Canadian records — raising questions about the future of one of President Trump’s newest hotels, just three years after it opened.
Trump does not own the Vancouver hotel; the building’s owner pays Trump’s company to operate the hotel and to license the Trump name.
The Trump Vancouver hotel has already been closed for four months because of the coronavirus pandemic. By Friday — a day after the bankruptcy filing — the hotel’s website was taken down, its name was missing from Trump Hotels’ corporate website, and the Vancouver hotel’s accounts were deleted from Twitter and Facebook.
Projected GDP for 2020, change from a year earlier
1 In 3 Cars Worldwide Is Produced In China
China’s poverty relief campaign
Brazil builds industrial port to boost trade with Asia
Brazil is building a large, modern port complex to facilitate trade with Asia, its main market, and benefit a range of productive sectors.
The 1,800-hectare facility, called Porto Central, is located in the coastal town of Presidente Kennedy, in southeast Espirito Santo state, on the border with neighboring Rio de Janeiro state.
At a seminar organized Tuesday by China’s Consulate General in Rio de Janeiro, the general director of Porto Central, Jose Maria Novaes, invited Chinese companies to join the project and make use of the port, designed to be South America’s most modern, when it opens in late 2023.
“Asia, particularly China, is Brazil’s largest trading partner, and this international trade flow, mainly of commodities from Brazil to Asia and industrialized products from Asia to Brazil, requires large ships” that few Brazilian ports can now accommodate, noted Novaes.
“There are few ports in Brazil capable of loading and unloading the world’s great ships. That is the differential of the Porto Central project: being able to receive the world’s largest ships, in each class, at each port terminal,” he said.
The port will feature a series of terminals, an internal channel with gradually decreasing water depth for ships sailing in, and 13 docks for ships carrying liquids, said Novaes.
“It is an industrial port enabling water, energy and gas at competitive prices, with terminals for the export of raw materials and semi-finished products, and with the flexibility to accommodate the interests of project developers,” he added.
Taiwan’s GDP was 50% of China’s back in 2000
2020 Fortune Global 500 list
The 2020 Fortune Global 500 list was released, with Walmart becoming the world’s largest company for the seventh year in a row, Sinopec remaining in second place, State Grid moving up to third, PetroChina in fourth, and Shell dropping to fifth place. seven Internet companies made the list, including Amazon, Alphabet Inc. and Facebook Inc. from the U.S., as well as China’s Jingdong Group, Alibaba Group, Tencent Holdings Ltd. and Xiaomi Group. The most striking change in this year’s rankings is the number of companies in Mainland China + Hong Kong, which reaches 124, surpassing the US (121) for the first time in history.
Net investment inflows exceed $60 billion USD in the second quarter
Data show that in recent years, the pace of foreign investment in China’s A-share significantly accelerated, in which the largest amount of stock purchases, have achieved considerable gains. However, they bought more bonds than stocks.
Foreign investors increased their holdings of Chinese bonds for 20 consecutive months.
Data show that the amount of bonds investment increased sharply in July. The face value of bonds under custody of overseas institutions was 2,344 billion yuan that month, up 148 billion yuan from June, up 6.74 percent, which means that overseas institutional investors have increased their holdings of Chinese bonds for the 20th consecutive month. It is understood that this is the second time during the year that foreign investors have increased their positions in a big way, and it is the highest monthly record for foreign investors to increase their positions in Chinese bonds since September 2017.
In the second quarter of this year, foreign institutions increased their holdings of Chinese bonds by 238 billion yuan, of which the largest increase was in government bonds, at 148 billion yuan, and if we add the bonds issued by banks such as China Development bonds, Import and Export bank bonds, and Agricultural Development bonds, the amount of increase in interest rate bonds by foreign institutions in the second quarter reached 246 billion yuan; in addition, ordinary bonds and local government bonds increased by 710 million yuan and 80 million yuan. The remaining asset-backed securities, corporate bonds, government-backed agency bonds, secondary capital instruments and medium-sized bills were all reduced by overseas institutions.
In the A-share market, trading within the prescribed range of stocks listed on the Shanghai Stock Exchange and Shenzhen Stock Exchange through the Hong Kong Stock Exchange , known as “northbound funds”北向资金.
As of August 7, this year, 124 billion yuan of foreign funds have flowed into A-shares through the Hong Kong Stock Exchange. By the end of June this year, northbound funds held 2145 A-share stocks , the total position market value of 1.71 trillion yuan, an increase of 412 billion yuan from the end of March this year . During the second quarter, the “northbound funds”, increased new holdings of 970 stocks. Among them, Guizhou Moutai, Midea Group, Wuliangye and Li Xun Precision, four stocks position market value growth of more than 10 billion.
China Becomes a haven for US Companies
China, which overcame the impact of the epidemic earlier, was described as a “key haven” for many US companies. China’s economic recovery in the second quarter helped them hedge against sales losses in the US.
In reporting financial results for the second quarter of this year, presidents of some of the best-known US brands cited China’s business as helping them through what could have been a much worse period.
Skechers, the third-largest U.S. sneaker brand, revealed the company’s overall sales fell 42 percent in the second quarter from a year earlier, but were up 11.5 percent in China. Retail sales in China recovered faster than most expected from April to June, falling just 3.9 percent from a year earlier. US retail sales, on the other hand, were down 8.1 percent year-over-year in the second quarter.
Despite the current intensifying political tensions between the US and China, US branded retailers selling in China have been virtually unaffected and can benefit from China’s economic recovery.
Luxury sales are the area where the contrast between China and the world is greatest. LVMH revealed that the company’s luxury revenue fell 38 percent in the second quarter from last year, yet rebounded 65 percent in China. Consumers are mainly choosing to buy in the country because of travel restrictions.
Kering SA, the parent company of luxury brand Gucci, was in a similar situation, with luxury sales down 43 percent in the second quarter from a year earlier, and up 40 percent in China.
While the US and other Western countries are struggling to contain a new outbreak and restart their economies, China has the epidemic largely under control. Many analysts are predicting a return to positive retail sales growth in China in the third quarter. In April, the Economist Intelligence Unit (EIU) argued that China would not achieve positive retail sales growth until 2021. Now the agency is revising its forecast and sees year-on-year growth of 1 percent in the third quarter of this year and 2.4 percent in the fourth quarter.
US coffee shop chain Starbucks’ second-quarter retail sales in China were down 19% year-over-year, but still below the global revenue loss (-38%).
Yum China, which operates fast-food brand, KFC, also revealed that the recovery has been uneven, with the market performing better in eastern China than elsewhere. The company’s operating income fell 11 percent in the second quarter.
In the apparel and footwear sector, high-end brands fared relatively better, with Canadian athleisure brand Lulu Lemon doing better in the second quarter. Canadian athleisure wear brand Lululemon saw only single-digit sales growth in China in April this year, but has grown 20% year-over-year in recent weeks.
Nike Group’s sales in China also returned to positive growth in the year to May 31, up 1 percent from last year, helping to offset a 38 percent decline in the company’s global revenue. Nike’s chief financial officer revealed that retail sales in China saw strong double-digit growth in May.
Finally, while overall car sales in China have not fully recovered, Tesla doubled its China sales to 48,384 units in the first half of the year year year-over-year through the production of its Model 3 electric model in Shanghai. Although Tesla’s U.S. factory was forced to close at one point, the company still posted a $104 million profit in the second quarter, with the Chinese market playing a key role.