tremendous trajectory
On 11 May 2019, at 4:31 PM, J wrote:
Precisely correct, because they dare given that they can access all markets irrespective of where made,
Does not apply to Vietnam entrepreneurs
Probably wasn’t what deep-state counted on
Imagine net net positive for Hong kong, as revenue / profit would remain offshore to both China and Vietnam.
On 11 May 2019, at 3:34 PM, M wrote:
Apparently, it is the Chinese themselves that are relocating to places like Vietnam....
And I had dinner with the Dean of Nanyang Business School of Singapore last weekend.
He says ultra-high end is being done in Singapore as that is where the cutting edge is done because of talent and ability to protect IP.
Said Indonesia could do great except that they are their own worst enemy in bureaucratic nonsense and unwillingness to let foreigners help make things more efficient due to "loss of face." Vietnam is not great, but better than Indonesia. Malaysia offers opportunities in specific areas as energy costs are low. And textiles were leaving China for Bangladesh, etc. in any case due to wages being so much more expensive on a relative basis - they were moving even without the tariff issue.
scmp.com
SNIP:
The first quarter of 2019 saw foreign investment in Vietnam rise by 86.2 per cent, to US$10.8 billion, with Chinese investment accounting for almost half of that, according to the Chinese state-run ?Securities Times newspaper.
On 11 May 2019, at 1:55 PM, J wrote:
Which mid-tech company w/ both china and usa market is going to invest in a plant in Vietnam that would be pulverised in the event of trade peace?
Which low tech manufacturer dependent on China OEM is going to migrate to Bangladesh?
Which high tech OEM is going to migrate to Malaysia?
At the margin, sure. One off two off maybe even three off.
The fourth one who stays in China shall reap the dividends upon trade victory.
Systemic? Hardly.
At least that is one possible outcome.
Let’s play.
On 11 May 2019, at 12:31 PM, M wrote:
Agreed.
The biggest winners are Vietnam, Bangladesh, Malaysia, Indonesia, etc.
Losers all around elsewhere I suspect.
M
On Sat, May 11, 2019 at 12:29 PM S wrote:
The practical problem for China is that what it imports from US is mostly high-tech products for which there is no medium term alternative producer or fungible commodities – soybeans, pork, energy – for which there is a worldwide market, so that the global commodity trading companies can simply rearrange the trade flows.
The US tariffs, on the other hand, are hitting consumer products without ready alternative markets at similar price points, and for which sourcing is easy to shift to other countries in the short term. The result is that the Chinese suppliers are absorbing most of the cost of the tariffs and the US buyers having been lining up alternative sources for the last year in the event the trade war gets worse. The impact of a 10% tariff at the importer level on US consumer prices has been minimal especially when much of it has been pushed back to suppliers. Result so far has been pain for China but little actual pain for US.
The 25% tariff, if not quickly removed, changes the game. Expect US buyers to immediately begin switching to alternative suppliers they have spent the last year developing. Big gain for Vietnam, Bengladesh, Indonesia, Malaysia, Cambodia.
Global manufacturing/supply chain proponents, like GE Healthcare where one factory produces a product for a global market, get crushed. Scanners and Ultrasound from owned China factories get whacked by the tariff versus competitors producing in EU. On the other side, US produced products get whacked by China tariffs. Less advanced producers, often European, relying on simple local assembly operations come out ahead. Expect to see rush for re-alignment of global manufacturing operations but will take longer than simple sourcing operations, with non-aligned countries being the big winners.
Winners:
1. SE Asia
2. Europe
Losers:
1. China
2. US
Expect Trump to press Europeans to contribute to cost if he’s successful. (He may not know where SEA is.) |
