WCA March 2009

asserted by the other two commentators. If it were to become clear that its American project is not working, he told Mr Zakaria, China has a Plan B: to focus on boosting its own consumption through government spending and easing credit to its people. “The big question today,” Mr Ferguson said, “is whether Chimerica stays together or comes apart because of this crisis. If it stays together, you can see a path out of the woods. If it splits up, say goodbye to globalisation.” China’s trade numbers are worrisome, but some small businesses in the US intend to adapt Expectations of a possible helping hand from China were further dashed by export statistics published 11 th December by the Chinese government. It was reported that exports fell 2.2% from November 2007 to November 2008 – the largest year-over-year monthly decline since April 1999 and a clear sign that China has big troubles of its own. Exports to all of China’s trading partners suffered, with those to the United States down 6.1% in November. For a startling comparison, Chinese exports to the US were up 12.4% as recently as October. In the weeks leading up to the exports report, the Chinese government allowed the yuan to fall against the US dollar after a long period of appreciation. This suggests a move by Beijing to strengthen China’s exporters by making their goods cheaper and more competitive abroad. This – together with China’s growing trade imbalance – could signal greater US-China tensions ahead. But, at levels below the national, commerce is looking to find its own way. While the volume of trade between small businesses in China and in Southern California has diminished, American companies expect trade through ports in Los Angeles and Long Beach to continue, and even pick up, during the economic downturn. James Flanigan of the New York Times cited an example of this optimism: Composite Technology Corp (Irvine, California), which makes carbon fibre cables for electric power transmission. Last year through November it had sold more than $12 million in cable to its Chinese distributor, the Jiang-su Far East Group. Now, Composite is expanding its manufacturing operation in Irvine in expectation of doing even more business with China. To promote such trans-Pacific ties, the investment bank Roth Capital Partners (Newport Beach, California) arranges financing for small companies in China. In the week in which Mr Flanigan wrote, Roth was bringing executives from 70 Chinese companies to meet with American investment managers at a conference in Las Vegas. (“An Eye on Growth, Deals Stretch Across the Pacific,” 20 th November)

Dorothy Fabian Features Editor

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Wire & Cable ASIA – March/April 2009