China’s industry needs more qualitative upgrading

12 July, 2021

Western politicians and business representatives often point at the big future technological challenges that companies from their own country will face from Chinese competitors. This will come true in many cases but certainly not automatically. My long-time feeling remains in place: Western knowledge about China continues mostly to be too general.

China is such a giant county

My impression from many trips to China still is in place that certain academically oriented views from Chinese researchers may be relatively open and humble. This seems to be possible when the Chinese feel that their discussions with foreign colleagues can be conducted in a fair way, of course “fair” according to some kind of international scientific definition. This can even provoke critical economic standpoints about the future by the Chinese themselves which, for example, can be found in the following article http://global.chinadaily.com.cn/a/202106/12/WS60c4045ba31024ad0bac671a.html).

At a seminar in June 2021 industry experts said according to the above-quoted article that “… the industrial structure of China needs urgent transformation during which the country should establish an entire industry chain that moves limited resources to high-end industries…”. Without doubt, there is an insight that China should manage a qualitative upgrading as soon as possible – meaning that China should be able to include everything in terms of industry chains.

However, we should at the same time try to understand the large-scale dimensions of the necessary improvements/innovations of products and industry chains. So much must happen in the giant country of China to come up to relevant macroeconomic dimensions!

At least many Chinese themselves are aware of this phenomenon and necessity. They know that China will have to work very hard itself. There is no automatic success story.

 

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board

 

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Emerging countries are still on the map

14 June, 2021

Related to the covid-19 pandemic, I have at several occasions urged for more global vaccination solidarity – also in this blog. Really poor but also the somewhat more favored emerging countries have been for a long time – and still are – dramatically undersupplied with vaccines. Finally, the Indian drama was recognized in our part of the world. Africa was sometimes touched upon – but by far too little. Latin America was also neglected painfully – even Brazil. The following graph demonstrates that many countries and politicians really should feel ashamed https://ourworldindata.org/grapher/cumulative-covid-vaccinations-continent?country=Africa~Asia~Europe~North+America~Oceania~South+America.

If you wish, you can regularly join the updated global vaccination numbers according to the following source, also country by country https://ourworldindata.org/covid-vaccinations .

Whatever one may think politically, it cannot be neglected that President Biden has provided the emerging world with new hope and solidarity for the fight against corona. Hopefully, the mentioned numbers of additional vaccines at the G7 meeting in Cornwall can be kept alive or – preferably – be widened further.

Maybe the emerging world now also enters a new period of international multilateralism. This would be desirable and the only way forward for poor countries. We have seen too much bilateralism in the past years, mainly driven by the U.S., the UK and China.

In my view, bilateralism is also a crucial enemy for combatting the worsening global environment efficiently enough.

 

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board

 

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IfW Kiel launches new global trade indicator – also for emerging countries

2 June, 2021

The Kiel Institute for World Economics (IfW Kiel) has been a leading institution for research on international trade and economics for many years. A lot of interesting papers and forecasts have been published during a long time. When I recently re-visited the website of the institute, I found the official introduction of the newly developed “Kiel Trade Indicator” (KTI).

https://www.ifw-kiel.de/topics/international-trade/kiel-trade-indicator/

Description of the indicator

KTI summarizes exports and imports of 75 countries to a global index and also for the EU as a subgroup. But trade numbers for exports and imports can also be found for each of these 75 countries – with new updated numbers around the 3rd and the 20th of every month. A forecast for the following month is included.

Particularly interesting is the approach of applying algorithm with machine learning and AI in a real-time environment. Goods-transporting ships are registered when they are entering or leaving 500 ports worldwide. Furthermore, another 100 ship movements in maritime regions are added.

In my view, good transparency should be applied in the future by IfW Kiel when quality evaluations finally take place – particularly since a new and modern modeling technology is applied. How does this approach work?

Current situation somewhat dampened

Some weakening export developments compared to the previous month could be observed in May both globally (-1.4%) and for the EU (-4,7%), the United States (-2.2%), Germany (-1,7%), China (-1.0) and India (-2.4%).

The Kiel economists explain the currently slightly shrinking world trade with rising commodity prices and shortages of certain industrial products, possible also with rising costs for transports.

However, positive export numbers for June are, for example, predicted for   Italy, Poland, Germany, Spain, Canada, Japan and India – but not for the U.S. and China. Summarizing these impressions, one should conclude that world trade will remain dampened in June. But this does not rule out a more significant upswing of global trade in the second half of 2021.

 

 

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board

 

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