32 / 72
From the
Americas
30
Wire & Cable ASIA – July/August 2007
Trade
China’s exporters are looking beyond
the American market
To judge from recent trends in the Chinese export
market, the importance of the US consumer to Chinese
manufacturers has dwindled. With the support of the
government in Beijing, Chinese companies are using trade
missions and trade fairs as a springboard for expansion
into the markets of many rapidly growing economies.
The Americans in the equation are not customers but
competitors.
Reporting from what is still called the Canton Fair – held
in Guangzhou, China, in the spring – Keith Bradsher
of the New York Times noted that Chinese business
representatives mentioned such factors as weaker growth
in the American economy, rising protectionist sentiment in
Washington, and the decline of the dollar against China’s
yen. This last development, energetically sought by US
President George W Bush, makes it more expensive for
Americans to buy Chinese products. (“China Leans Less on
US Trade,” 18
th
April)
Accordingly, Chinese producers see their fastest growth
these days as lying in Europe, Africa, the Middle East, South
America, and elsewhere in Asia: “Practically anywhere
other than the United States,” said Mr Bradsher. While
the Chinese exporters perceive much less protectionist
sentiment in Europe than in the US, currency fluctuations
may be a more important element in the new commerce.
In February, the rise in the value of the Euro pushed China’s
exports to European Union countries past its exports to the
US for the first time.
The Hang-zhou Jilin Machinery Co, which makes
screwdrivers and other tools, was cited by the
Times
as an
illustration of the effect of currency rates on one Chinese
company’s finances. Its American sales have remained
basically flat, while those to Africa, Europe, the Middle East,
and especially Australia are on the rise.
Zhao Wei, the company’s sales manager, assigns much
of the blame to the dollar’s lower value against the yen.
Officials in Beijing raised the value of the Chinese currency
by 2.1% against the dollar in July 2005, and have let it drift
up 5% more since then.
“It’s a big problem,” Ms Zhao told the American visitor.
While the shift in Chinese exports away from the
US has been underway for some time, the question
arises whether the present regime in Beijing is actively
promoting the trend. Wang Tongsan, a senior Chinese
economic forecaster and member of a committee of
experts overseeing the current five-year plan, told the
New York Times that the government did not have a
policy of pushing exporters to focus on markets other
than the United States. He attributed the rise in sales
to developing countries to the strong entrepreneurial
talents of many Chinese business people.
Several exporters at the China Import and Export Fair
(the re-named Canton Fair) said they had not been told
by the Commerce Ministry to reduce their dependence
on the American market.
❖
But one exhibitor pointed out that abundant information
in Chinese about foreign markets could now be found on
Internet sites run by Alibaba.com, based in Hangzhou,
and by various government agencies. And, while foreign
companies were invited to show their wares at the fair,
they were relegated to the remote top floor of just one
of the more than 30 halls that the trade fair fills at the
city’s two convention centres. According to the
Times’s
Mr Bradsher, only 18 American companies attended,
most of them little known and with small booths.
South Korea and the US sign
a bilateral deal that strengthens
America’s position in Asia
The free trade agreement reached by the US and South
Korea on 2
nd
April was a rare and welcome triumph for the
administration of President George W Bush, which has
been struggling to sell an opposition Democrat-controlled
Congress on bilateral trade pacts with Panama, Peru,
and Colombia. The high-profile deal struck with Seoul, a
first with a major Asian economy, is Washington’s biggest
since the tripartite (US-Canada-Mexico) North American
Free Trade Agreement took effect in 1994. When ratified
by Congress, the new pact will immediately remove tariffs
on more than 90% of all goods traded between the US and
South Korea, American officials said. It could add as much
as $20 billion to that trade, estimated at $78 billion in 2006.
In return for opening up its market, which had offered only
restricted access to such important American products
as cars, South Korea will gain an opportunity to boost its
export-driven economy. In the first year under the pact,
South Korean exports to the United States are expected
to rise by 12%, some $5.4 billion. Potential gains to the
American economy range from $17 billion to $43 billion,
and would help narrow the large US trade imbalance with
South Korea.
More broadly, the agreement ‘highlights the United States’
strong commitment to active engagement and partnership
throughout Asia,’ said deputy US trade representative
Karan Bhatia. Reading between those lines, and the jubilant
announcement of the pact by Mr Bush, will disclose an
important subtext.
The newly cemented relationship between the US and South
Korea – the world’s largest and eleventh-largest economies,
respectively – offers the US a position in Asia from which
to counter the growing influence of China throughout the
region. While Washington has actively pursued bilateral
pacts in Asia, its talks with Malaysia are stalled, and deals
with Japan and with China itself are considered unlikely.
Manufacturing
New industrial/labour alliance
comes out swinging – against China and
the National Association of Manufacturers
An unusual alliance of top US manufacturers and the United
Steelworkers labour union (USW) has introduced itself by
taking a strongly confrontational stance toward China,