Page 11 - 2020 Special Report on the State of Business in South China
P. 11
sibility of a collapse is not farfetched. In such a ?½ç?è¿??????¡ä?ç®??è´¸æ???·®????¨å?ï¼??å®??
scenario, world recession would not be far behind. è¿??ä¹?¸ºç¾????????°å?ä¸?????ä½????便ä?ä»?6%
American companies, as well as most companies on ??¹´å¢??????¿ï?ä¸??æ¯?¹´GDPä¹??å¢??è¶??8500
the planet, depend on this supply chain for various 亿ç????æ¯??å£??ä¸??家ç?GDP?½é?ï¼??ä½???·å?
reasons. Many goods assembled in China or the US GDP???建è?ï¼??ä»??è¦??ä¸?????ï¼??ä¸??ç»??ä¸?
depend on raw material from and parts manufactured ????´å¤§??»½é¢????????¸ç¾??ä¸??¶æ?ç»?´¸??????
in many different countries in the world. As it is stated ç¾ç½²ï¼?¾¾???äº??段ç?交æ???????对å?è¦????
in our White Paper research, it will take 2-3 trillion US
dollars to replace the current supply chain. Therefore, 对ä¸ç¾?´¸????¤ï???»¬ä¾?????±å????并å?ä¿¡ä¸
it is of paramount importance that the two major ç¾?¸¤?½å?å°?¾¾??´¸???å®????ç»????????对ç???
economies of this supply chain sit down to establish ç¨?????è¨?è¯???»ã????¤é?ä¸??两å?ç«?????è°??
the stabilizer we suggested earlier in this message. æ¡??ï¼??å§??è¡??äº??段è??¤ï?ä¸??ä¹?¡¨ç¤ºè??¨è???
å¾??å®??ï¼?????ç¬???¶æ?å°??为è?ä¸?代人以æ???å¤?
It?? time to get to work. According to a 16-month ???治失败å?ç»??失败??¸ºäº??????ºå?è´¸æ????
study by Professor Michael Enright of the University å±??ç¬???¶æ?è°??å¿?¡»???è¿????
of Hong Kong (former faculty at the Harvard Business
School) using foreign direct investment (FDI) numbers ?½ç?è°??è¿?????ï¼????ºº?½ç¡®å®??äº??段å?å®?
and its multipliers, on the average across China one ?°å??½å?è¾¾æ???´¸????¿é???????ï¼??ä¸???????
third of China?? GDP and 27 percent of its employment å¾??满æ??ä¿¡å??°å?å®???????ä¸???¨å?注两?½é?å¯?
are created by foreign invested enterprises (FIEs). ??¸¾????½é?è´¸æ?????¥å?ç¾?¸??????è¿??å¹´ã??
This analysis also show in Shanghai 67 percent of
the industrial output and 90 percent of its high-tech
output are created by FIEs. Considering that China??
2019 nominal GDP was reported at around US$14.2
trillion, this information translates into roughly 4.68
trillion US dollars of economy generated by FIEs of
which American companies are a substantial part. It
has taken billion of US dollars and much commitment
and resources to create this part of the economy.
While this amount of business is not calculated as a
part of the trade deficit, it creates thousands upon
thousands of high paying jobs back in the US. Keeping
in mind that even growing at a 6 percent annual rate,
China creates over 850 billion additional US dollars
to its economy ?? an amount larger than the GDP of
Switzerland and just under the entire GDP of the
Netherlands. I suggest that we need to work with
China to capture an even larger piece of this economy.
With Phase One signed, finalizing a Phase Two deal
becomes an absolute necessity.
We remain hopeful and determined that these
two nations will work out a deal that will eventually
see an end to the tit-for-tat tariffs and harsh rhetoric.
But unless the US and China immediately return to the
negotiating table to start Phase Two, a step that China
has also indicated is not imminent, Phase One will go
down as one of the biggest political and economic
failures in a generation. For the sake of international
markets and trade growth, the negotiations must
continue to make progress.
Progress can still come, but whether a Phase
Two will live up to the promises is anyone?? guess.
The persistent uncertainty over trade has made it
hard for companies and investors to make plans with
confidence. The world is watching for leadership from
both countries. International trade does not accept
that an agreement between the US and China can be
pushed down the road for another year.
11
scenario, world recession would not be far behind. è¿??ä¹?¸ºç¾????????°å?ä¸?????ä½????便ä?ä»?6%
American companies, as well as most companies on ??¹´å¢??????¿ï?ä¸??æ¯?¹´GDPä¹??å¢??è¶??8500
the planet, depend on this supply chain for various 亿ç????æ¯??å£??ä¸??家ç?GDP?½é?ï¼??ä½???·å?
reasons. Many goods assembled in China or the US GDP???建è?ï¼??ä»??è¦??ä¸?????ï¼??ä¸??ç»??ä¸?
depend on raw material from and parts manufactured ????´å¤§??»½é¢????????¸ç¾??ä¸??¶æ?ç»?´¸??????
in many different countries in the world. As it is stated ç¾ç½²ï¼?¾¾???äº??段ç?交æ???????对å?è¦????
in our White Paper research, it will take 2-3 trillion US
dollars to replace the current supply chain. Therefore, 对ä¸ç¾?´¸????¤ï???»¬ä¾?????±å????并å?ä¿¡ä¸
it is of paramount importance that the two major ç¾?¸¤?½å?å°?¾¾??´¸???å®????ç»????????对ç???
economies of this supply chain sit down to establish ç¨?????è¨?è¯???»ã????¤é?ä¸??两å?ç«?????è°??
the stabilizer we suggested earlier in this message. æ¡??ï¼??å§??è¡??äº??段è??¤ï?ä¸??ä¹?¡¨ç¤ºè??¨è???
å¾??å®??ï¼?????ç¬???¶æ?å°??为è?ä¸?代人以æ???å¤?
It?? time to get to work. According to a 16-month ???治失败å?ç»??失败??¸ºäº??????ºå?è´¸æ????
study by Professor Michael Enright of the University å±??ç¬???¶æ?è°??å¿?¡»???è¿????
of Hong Kong (former faculty at the Harvard Business
School) using foreign direct investment (FDI) numbers ?½ç?è°??è¿?????ï¼????ºº?½ç¡®å®??äº??段å?å®?
and its multipliers, on the average across China one ?°å??½å?è¾¾æ???´¸????¿é???????ï¼??ä¸???????
third of China?? GDP and 27 percent of its employment å¾??满æ??ä¿¡å??°å?å®???????ä¸???¨å?注两?½é?å¯?
are created by foreign invested enterprises (FIEs). ??¸¾????½é?è´¸æ?????¥å?ç¾?¸??????è¿??å¹´ã??
This analysis also show in Shanghai 67 percent of
the industrial output and 90 percent of its high-tech
output are created by FIEs. Considering that China??
2019 nominal GDP was reported at around US$14.2
trillion, this information translates into roughly 4.68
trillion US dollars of economy generated by FIEs of
which American companies are a substantial part. It
has taken billion of US dollars and much commitment
and resources to create this part of the economy.
While this amount of business is not calculated as a
part of the trade deficit, it creates thousands upon
thousands of high paying jobs back in the US. Keeping
in mind that even growing at a 6 percent annual rate,
China creates over 850 billion additional US dollars
to its economy ?? an amount larger than the GDP of
Switzerland and just under the entire GDP of the
Netherlands. I suggest that we need to work with
China to capture an even larger piece of this economy.
With Phase One signed, finalizing a Phase Two deal
becomes an absolute necessity.
We remain hopeful and determined that these
two nations will work out a deal that will eventually
see an end to the tit-for-tat tariffs and harsh rhetoric.
But unless the US and China immediately return to the
negotiating table to start Phase Two, a step that China
has also indicated is not imminent, Phase One will go
down as one of the biggest political and economic
failures in a generation. For the sake of international
markets and trade growth, the negotiations must
continue to make progress.
Progress can still come, but whether a Phase
Two will live up to the promises is anyone?? guess.
The persistent uncertainty over trade has made it
hard for companies and investors to make plans with
confidence. The world is watching for leadership from
both countries. International trade does not accept
that an agreement between the US and China can be
pushed down the road for another year.
11
