In The Spotlight
Islamabad, Oct, 14: Emerging Asia’s Singapore knocks United States, the world's largest economy, out of the top spot in the World Economic Forum's annual competitiveness report for 2019. The Asian city state scored top marks for its infrastructure, health, labor market and financial system, according WEF report. With a score of 84.8 out of 100, Singapore is the country closest to the frontier of competitiveness.
Minister for Trade and Industry Chan Chun Sing said on Facebook that the ranking was encouraging as it reflected how strong economic fundamentals here continue to distinguish Singapore from its competitors.
“Nevertheless, as a small and open economy, we cannot afford to take things for granted,” he added.
Other Asian giants Hong Kong stood at 3rd position despite domestic turmoil while Japan clinched the 6th position in the index.
Hong Kong, the financial hub of Asia, received high marks for its macroeconomic stability, health, financial system and product market - the most of any economy.
"Hong Kong's biggest weakness is undoubtedly its limited capability to innovate," the report said, adding that the region also lags behind Singapore in worker protection
The report stated also that Asia-Pacific is the most competitive region in the world, followed closely by Europe and North America.
Other G20 economies in the top 10 include the United States (2nd), Japan (6th), Germany (7th) and the United Kingdom (9th) while Argentina (83rd, down two places) is the lowest ranked among G20 countries
Though the United States has lost out to Singapore but it remains an innovation powerhouse, ranking 1st on the business dynamism pillar, 2nd on innovation capability, and 1st for finding skilled employees.
The reported stated Nordic countries are among the world’s most technologically advanced, innovative and dynamic while also providing better living conditions and social protection.
Denmark, Uruguay and Zimbabwe have increased their shares of renewable sources of energy significantly more than other countries at their respective levels of competitiveness.
The Global Competitiveness Report series was launched in 1979 to provide an annual assessment of the drivers of productivity and long-term economic growth.
By : Dr.Muhammad Arif
China and Cameroon Vow to Deepen Pragmatic Cooperation under the Framework of the Belt and Road Initiative (BRI)
Yaoundé, Jan. 23: China and Cameroon have vowed to deepen pragmatic cooperation under the framework of the Belt and Road Initiative (BRI) and implement the proposals agreed at last year's Forum on China-Africa Cooperation (FOCAC).
Yang Jiechi, Chinese President Xi Jinping's special representative, made the remarks on Friday during a meeting with Cameroon's President Paul Biya in Yaounde. Yang is also a member of the Political Bureau of the Central Committee of the Communist Party of China (CPC) and director of the Office of the Foreign Affairs Commission of the CPC Central Committee.
He said the two nations should jointly boost cooperation under the BRI and enhance friendly exchanges at all levels. China is willing to continue to support economic development and to improve people's livelihoods in Cameroon, he continued.
Yang conveyed to Biya cordial greetings from Xi, noting that the African nation's president attended September's Beijing Summit of FOCAC and has achieved important consensuses with Xi, opening up new development opportunities for bilateral ties.
Biya said that Cameroon attaches great importance to its friendship with China and appreciates its partner's long-term support and assistance.
He stressed that Cameroon is determined to jointly implement the fruitful outcome of FOCAC, and strengthen communication and cooperation with China in multilateral affairs.
During the visit, Yang also met Cameroon's Prime Minister Joseph Dion Ngute and Foreign Minister Lejeune Mbella Mbella.
(Cover: Yang Jiechi (L), Chinese President Xi Jinping's special representative, meets with Cameroon's President Paul Biya (R) in Yaounde on January 18, 2019. /Photo via the official website of Chinese Foreign Ministry).
Cameroon and China signed five development agreements last year. These include:Cameroon and China signed five development agreements last year. These include:
1) An economic and technical cooperation agreement between the governments of Cameroon and China;
2) A memorandum of understanding on the development of human resources;
3) A protocol agreement to reinforce cooperation on infrastructural development between the Chinese Ministry of Trade and Cameroon’s Ministry of the Economy, Planning and Regional Development;
4) A capacity-building framework agreement on production between the National Development and Reform Commission of the People’s Republic of China and Cameroon’s Ministry of the Economy, Planning and Regional Development;
5) A Concessional Loan agreement between the Exim Bank of China and Cameroon to cover phase two of the potable water supply project in nine towns in Cameroon.
Nigerian President Inaugurates China-Assisted New Terminal at Nnamdi Azikiwe International Airport in Abuja, Nigeria
Abuja, Dec. 23: China-assisted and built Nnamdi Azikiwe International Airport terminal in the capital city of Abuja was inaugurated by Nigerian President Muhammadu Buhari on Thursday, paving the way towards achieving the dream of African connectivity. The multi-billion dollar infrastructure project will boost regional integration and enhance trade and cultural ties.
The “ultra-modern” facility will accelerate the government’s goal to develop Nigeria into a regional air transportation hub, President Buhari said while speaking at the the inauguration ceremony of the terminal, supported by the Export-Import Bank of China and constructed by the China Civil Engineering Construction Corporation (CCECC), which is involved in many ongoing infrastructural projects in Nigeria, including rail and road construction.
“This event today reflects Government’s deliberate policy to sustain the development of Nigeria’s infrastructure. We are gradually closing the infrastructural deficit bedeviling our country,” Buhari added.
In his speech, Buhari also said that the Nnamdi Azikiwe International Airport terminal is the first to be connected to a rail transport system in the country and the West African region.
The new international airport terminal, the largest in West Africa, is a world-class aviation transport facility designed to handle 15 million passengers annually, open more convenient air routes and contribute immensely to the economic and infrastructure development of Nigeria.
The new terminal, the second in a series of four new terminal projects in Nigeria, was constructed in partnership with the Chinese government. In October, a terminal was inaugurated at Port Harcourt Int’l Airport in southern Nigeria. The other two terminals are respectively in Kano and Lagos.
These four new international airport terminals are counted on to modernize airport operation and passenger facilitation across Nigeria, enabling the Nigerian government to realize its set objective of elevating its aviation industry to meet international standards.
Travelers and users of the major airports in Nigeria have long complained about congestion, insufficient facilities and outdated equipment.
The new terminal at Nnamdi Azikiwe has 72 check-in counters, five baggage collection carousels, 28 immigration desks at arrival and 16 at departure, eight security screening points and eight passenger boarding bridges.
It also has a walkway to link the Nigerian capital metro rail with an additional apron linking the domestic wing of the airport and many other facilities.
Nigerian Aviation Minister Hadi Sirika said the facilities were properly designed and laid out in accordance with modern requirements for airport operations.
Sirika said the airport is strategic to Nigeria, as the gateway to the nation’s capital, and is the second busiest airport in the country.
“Likewise, the Nnamdi Azikiwe International Airport is the fastest growing in passenger traffic in West and Central Africa with an average growth rate of 8 percent,” Sirika said.
Chinese Ambassador to Nigeria Zhou Pingjian, noting that the most effective way to develop an economy is to provide transportation infrastructure, urged the Nigerian government to continue to improve the sector.
Zhou said the completion of the capital international airport terminal project has added impetus to the mutually beneficial China-Nigeria cooperation, noting that the Chinese government is committed to partnering with Nigeria to build long-lasting infrastructure in the country.
Tunis, Nov. 25: Tunisia will become a new member of the Asian Infrastructure Investment Bank (AIIB), a multilateral development bank that aims to support the building of infrastructure in the Asia-Pacific region. The bank currently has 87 member states from around the world.
'Tunisia’s accession into AIIB will allow the country to benefit from the funding granted by this bank to implement development projects in infrastructure, transport, renewable energy, environment and water resources management, Jin Liqun, President of the Asian Infrastructure Investment Bank (AIIB, said on Wednesday while meeting with Tunisian President Beji Caid Essebsi, in Tunis.
Jin Liqun, who is making a working visit to Tunisia, also stressed the importance that the AIIB attaches to co-operation with Tunisia whose strategic location and different strengths allow it to be a promising regional platform.
Essebsi called for cooperation programs and future financing for the development of inland regions through infrastructure and renewable energy projects.
Tunisia is a North African country bordering the Mediterranean Sea and Sahara Desert.
several Tunisian officials have expressed their willingness to see Tunisia participate in the “Belt and Road” initiative.
Tunisia, enjoying a key position in the Mediterranean between Europe and Africa, is a privileged tourism destination attracting Chinese investments in the service sector.
At 2018 Forum on China-Africa Cooperation, Tunisian established “solid partnership” with the China’s Belt and Road Initiative (BRI). The deals included projects to turn Tunisia’s southern port of Zarzis into an economic and trade hub, build a bridge connecting Djerba, Tunisia’s main tourism island, to Djorf in the mineral-rich Medenine region and construct a 140km railway connecting the coastal region of Gabes to Zarzis.
Joining AIIB would help Tunisian business community to diversify their trade and investment.
Moscow, Aug. 2: A Russian inventor tested his limits by designing a homemade turbo jet-powered bicycle. The invention will add new direction to the Russian engineering.Igor Negoda demonstrated his incredible design, which he dubbed a “jet bike,” during a test run in the Rostov Region last weekNegoda mounted the 18kg (39lb) thruster onto the back of the bicycle, and added some extra features such as a GPS system to monitor his speed. He also built in tech to watch the engine’s RPM, thrust and temperature.
As well as mounting various other pieces of core kit such batteries and a power radio receiver to the bike, Negoda carries a mini-fuel tank in his backpack.
The inventor and speed demon first demonstrated the turbo jet’s thrust by clearing the dust and rocks from his surroundings, before taking the jet bike to an open road where he reached speeds of 72kph (45mph).
Russian Inventor Makes Turbo Jet Engine-Powered Bicycle Reaching 72kmh
According to the ministry, this project is important not only for Turkey, but for the whole region.
"The BTK project will ensure transportation of goods from Central Asia to Europe and vice versa.
The ceremony was attended by Chairman of Azerbaijan Railways CJSC Javid Gurbanov, Turkey’s Minister of Transport, Maritime and Communications Ahmet Arslan, CEO of Georgian Railway Mamuka Bakhtadze and President of JSC NC Kazakhstan Temir Zholy (Kazakhstan Railways) Kanat Alpysbaev.
The ministry said also that it is expected that cargo transportation via the BTK can be increased up to 35 million tons after 20 years of the railway’s operation.
The BTK railway project will bring additional revenues to Turkey.
The BTK railway is being constructed on the basis of the Georgian-Azerbaijani-Turkish intergovernmental agreement. The peak capacity of the railway will be 17 million tons of cargo per year. At the initial stage, this figure will be one million passengers and 6.5 million tons of cargo.
Baku, July 19: An agreement to establish a logistics center was signed in Kars In the framework of the Baku-Tbilisi-Kars (BTK) railway project, said Javid Gurbanov, the head of Azerbaijan Railways CJSC, during his visit to Kars province of Turkey on July 19, one of the Turkish TV channels reported.
Gurbanov noted that entrepreneurs will annually be able to send 2 million tons of goods with preferences by the BTK railway, further adding that in the future the volume of cargo transportation along the BTK route will be increased.
He went on to say the BTK railway communication project will ensure the development of the region. He also expressed the hope that in the future cargo transportation from Kazakhstan and China via the Baku-Tbilisi-Kars railway will increase to 500,000 containers. The BTK railway is being constructed on the basis of the Azerbaijan-Georgia-Turkey intergovernmental agreement.
The main purpose of the project is to improve economic relations between the three countries and gain foreign direct investment by connecting Europe and Asia.
The project implementation began in 2007 and construction began in 2008. The line is intended to transport one million passengers and 6.5 million tons of freight at the first stage. This capacity will then reach 3 million passengers and 17 million tons of cargo.
BEIJING, Sept.25: The war-torn Iraq will be joining China’s multination infrastructure investment project “Belt and Road”, Iraqi Prime Minister Adil Abdul-Mahdi announced this while meeting with Chinese president Xi Jinping on Monday in Beijing.
Abdul Mahdi was on an official visit to China from Sept. 19 to 23 at the invitation of Chinese Premier Li Keqiang.
“Iraq has gone through war and civil strife and is grateful to China for its valuable support,” said Mahdi, in comments broadcast on Chinese state media outlet CGTN.
“Iraq is willing to work together in the ‘One Belt, One Road’ framework,” he further added.
The chief architect of BRI, Chinese president Xi, who proposed the BRI in 2013, in his remarks said that the two countries would cooperate on oil and infrastructure projects.
“China would like, from a new starting point together with Iraq, to push forward the China-Iraq strategic partnership,” said Xi.
China was the first country to participate in Iraqi economic reconstruction and continued its work for the longest period. China has the most widely distributed projects in Iraq in terms of geography and fields. Chinese companies remained in Iraq even when the security situation was at its worst, said Xi.
Chinese premier Li Keqiang in his remarks said that China is willing to participate in Iraq's reconstruction, maintain a long-term and stable energy partnership with Iraq, and expand cooperation in capacity, manufacturing and agriculture to fuel the diversified development of the Iraqi economy and achieve win-win results.
China stands ready to work with Iraq to dovetail the Belt and Road Initiative with Iraq's reconstruction plan, supports Chinese enterprises to positively take part in Iraq's infrastructure construction and hopes that Iraq will take forceful measures to guarantee the safety of Chinese institutions and individuals in the country.
Abdul Mahdi further said his country has experienced war and is rebuilding its homeland, and added China is a country that loves peace and advocates cooperation, adding that Iraq is willing to work with China to enhance cooperation in the fields of trade, the economy, infrastructure construction, energy and culture to realize greater development of bilateral relations.
After the talks, Li and Abdul Mahdi witnessed the signature of a series of bilateral cooperation documents on the economy and technology, finance and culture.
After nearly 16-years of war, Iraqis are looking abroad to seek over $90 billion for the reconstruction of the homeland.
In 2018, trade volume between China and Iraq was more than US$30 billion (US$1.00 = RM4.18), according to state news agency Xinhua.
Beijing is Baghdad’s biggest trade partner, while Iraq is China’s second biggest oil supplier.
The Belt and Road Initiative (BRI) is a massive global network of ports, railways, roads and industrial parks spanning Asia, Africa, the Middle East and Europe, which will see trillions invested in new infrastructure.
Many developing countries have joined the China’s megaproject to seek financial support for their development projects.
More than 150 countries and international organizations have joined BRI, which is thought to be the largest infrastructure project in human history.
China has already made Belt and Road cooperation agreements and launched development projects with a number of other Middle Eastern nations, including the UAE and Saudi Arabia.
By Muhammad Arif,
ISTANBUL, Dec. 20 : ICBC Turkey, a branch of the Industrial and Commercial Bank of China (ICBC), on Thursday was named the "International Bank of the Year" for its "distinguished contributions" to Turkey's economy. At an awarding ceremony in Istanbul, Binali Yildirim, speaker of the Grand National Assembly of Turkey, granted the award to Gao Xiangyang, chairman of ICBC Turkey.
The speaker himself and Uzbek President Shavkat Mirziyoyev were named "the Statesman of the Year" and "the Statesman of the Year in Central Asia" respectively by the Turcomoney magazine, Turkey's leading journal on finance and economy.
Some Turkish businessmen, institutions and exporting companies were also honored with awards for creating significant job opportunities.
Granting awards for those making contributions to Turkey and the world is a traditional program of Turcomoney, which is marking its 7th founding anniversary.
ICBC Turkey, which was established after ICBC purchased a majority of shares of Turkey's Tekstilbank in May 2015, is a business institution that provides all-round financial services, as it is licensed for commercial banking, investment banking and asset management.
ICBC is China's largest commercial bank as well as the world's largest bank by assets.
Turkey's geographical location holds a significant position in the Belt and Road Initiative (BRI) stretched along the ancient “Silk Road” — a network of trading routes established by the Han Dynasty spanning the Asian continent — served as a bridge between China and Asia Minor (modern-day Turkey).
Actually, BRI is a global development project launched by Chinese president Xi Jinping in 2013 and looks to connect Asia, Africa and Europe, with billions of dollars' worth of infrastructural investment projects involving roads, railways, ports and energy transmission lines.
Abu Dhabi, Dec. 16: China’s COSCO Shipping Ports (CSP) and Abu Dhabi Ports on Monday inaugurated the new CSP Abu Dhabi Terminal at Khalifa Port to help connect Abu Dhabi to the company’s global network of 36 ports and bolster its role as a hub along China’s Belt and Road Initiative (BRI).
The deep-water, semi-automated container terminal includes the region’s largest container freight station, covering a total area of 275,000 square-metres. The facility also offers facilities for full and partial bonded container shipments and a range of container packing services, warehousing for de-consolidated cargo and connectivity to other terminals in Khalifa Port.
The terminal is also CSP’s first greenfield subsidiary. So far, CSP has invested AED 1.1 billion ($299.4 million) in capital expenditure on construction and machinery at the facility.
According to Abu Dhabi Ports, the partnership with CSP forms part of a larger effort to strengthen Abu Dhabi’s maritime sector and the emirate’s economic diversification.
Abu Dhabi Ports has earmarked AED 10 billion ($2.72 billion) in investment to increase capacity at Khalifa Port from the current 5 million TEU to 9.1 Million TEU, which includes boosting capacity at Terminal 1 to over 5 million TEU.
The CSP Abu Dhabi terminal, for its part, has a design capacity of 2.5 million TEU and will begin with a handling capacity of 1.5 million TEU.
“The decision by COSCO Shipping Ports to invest in Abu Dhabi is a testament to our strategic location, attractive business environment and supportive regulation,” said Sheikh Theyab bin Mohamed bin Zayed Al Nahyan, Chairman of the Department of Transport. “We believe that it will open the door to more foreign direct investment.”
Ning Jizhe, Deputy Director of China’s National Development and Reform Commission, said that the CSP terminal is a “major milestone” for China’s Belt and Road Initiative.
“[It is} also a good start for China and UAE’s pragmatic cooperation in other areas,” he said. “The two countries strong determination for cooperation laid a solid foundation for development and deepening of mutual relations, and thus provided promising prospects for cooperation in the future….China and UAE will continue to cooperate in more flagship projects and jointly contribute to the Belt and Road Initiative.
China is currently the UAE’s largest non-oil trading partner, with bilateral trade between the two increasing 15 percent to $53 billion in 2017.
During the same period the UAE accounted for nearly 30 per cent of total Chinese exports to Arab countries and about 22 per cent of total Arab-China trade. Bilateral trade is expected to increase to $70 billion a year by 2020.
The new terminal is also expected to ease the way for companies seeking to establish, expand or enhance their trade by using local manufacturing, warehousing or logistics operations within Abu Dhabi. It will also act as a catalyst for investment by foreign companies to set up in the free zone of Khalifa Industrial Zone Abu Dhabi (Kizad).
Kizad, which comprises 410 square kilometres, has attracted more than 200 tenants and Dh65 billion in investment till date.
A total of 19 Chinese companies have signed lease agreements for land in Kizad with investment surpassing more than $1 billion, officials said earlier this year.
The new terminal is part of Abu Dhabi Ports’ five-year growth strategy to increase Khalifa Port, with its two container terminals, to a combined total capacity of 9.1 million TEUs.
HAMBURG, Germany, July 8 (Xinhua) -- Chinese President Xi Jinping and his U.S. counterpart, Donald Trump, met here Saturday to discuss bilateral ties and global hot-spot issues on the sidelines of a Group of 20 (G20) summit.
Xi told Trump that stronger China-U.S. ties are conducive to stability and prosperity and serve the interests of both peoples and the international community in a complex world where various conflicts emerge.
Noting that the two countries have made new progress in bilateral cooperation in many fields since the Mar-a-Lago meeting despite some sensitive issues, Xi urged joint efforts with Trump to keep bilateral ties on track and coordinate in international affairs.
Xi also stressed that the two countries should stick to mutual respect and win-win cooperation, expand practical cooperation in various fields and strengthen coordination on international and regional issues, so as to keep China-U.S. relations healthy and stable.
The two leaders agreed to maintain close high-level exchanges and promote strategic mutual trust.
China and the United States have decided to hold the first round of a comprehensive economic dialogue on July 19, and launch the first round of a law enforcement, cybersecurity, social and cultural dialogue at an early date.
With altogether four high-level mechanisms, the two countries aim to improve mutual understanding and boost practical cooperation.
Noting that the 100-day action plan initiated after the two presidents' meeting at Mar-a-Largo in April has achieved new progress, Xi said the two sides are discussing a one-year cooperation plan.
On advancing military ties, Xi suggested that the two countries' defense ministers carry out an exchange of visits as soon as possible.
He also called for concerted efforts on such affairs as the China visit by the chairman of the U.S. Joint Chiefs of Staff in August, the first dialogue between the joint staffs of the two countries' militaries in November, and the Chinese navy's participation in the U.S.-led 2018 Pacific Rim military drill.
The two countries should respect each other's core interests and major concerns, and properly address differences and sensitive issues, said Xi.
For his part, Trump hailed the "wonderful relationship" with Xi and expressed confidence in the "success" in addressing common problems together with China.
The U.S. president noted that U.S.-China relations are developing well, with China being an important trade partner to the United States and playing an important role in international affairs.
Trump said his country is willing to expand dialogue and win-win cooperation with China in all relevant fields and maintain communication and coordination on major international and regional issues.
The pair also had an in-depth exchange of views regarding the Korean Peninsula nuclear issue.
Xi said China is firmly committed to denuclearizing the peninsula, safeguarding peace and stability on the peninsula, and solving the issue through dialogue and consultation.
China, Xi said, has repeatedly made clear its principled stance that while making necessary responses to the Democratic People's Republic of Korea's violations of UN Security Council resolutions, the international community should also increase efforts in promoting dialogue and controlling the situation.
He also reiterated to Trump that the Chinese side opposes the U.S. deployment of the Terminal High Altitude Area Defense system in South Korea.
The two leaders agreed to continue close communication and coordination on the Korean Peninsula nuclear issue.
They also exchanged views on boosting bilateral coordination and cooperation within the framework of the G20.
Trump was scheduled to pay a state visit to China later this year.
Xi and Trump set a constructive tone for the development of China-U.S. relations during their talks at the Mar-a-Lago resort in the U.S. state of Florida in April. The meeting was the first face-to-face communication between the two heads of state since the new U.S. administration took office.
In Florida, the two presidents spent more than seven hours in in-depth discussions, gained better understanding of each other, cemented mutual trust, reached consensus on many major issues, and built up a good working relationship.
Source by: news.xinhuanet.com
CARACAS, July 8 (Xinhua) -- Venezuela's jailed opposition leader Leopoldo Lopez has been allowed to serve the remainder of his nearly 14-year sentence under house arrest, the Supreme Court of Justice (TSJ) said on Saturday.
His lawyer Javier Cremades confirmed the decision in a Twitter post, saying:" Leopoldo Lopez is at his home in Caracas with (his wife) Lilian and his children ... He was let out at dawn."
The court said it granted house arrest for humanitarian reasons, citing "information received about his health situation," as well as "irregularities" in the legal process.
Lopez, a prominent leader of the right-wing opposition, was sentenced in September 2015 to 13 years, nine months and seven days in jail, after he was convicted of inciting violence, vandalism, arson and conspiracy to commit a crime.
He served the sentence in a military prison in Ramo Verde, in west Miranda state.Violent anti-government demonstrations broke out in 2014 in Venezuela, which left 43 people dead and 800 injured, as well as caused huge damage to public institutions, according to the Venezuelan News Agency (AVN).
Venezuela's ombudsman Tarek William Saab welcomed the decision to grant Lopez house arrest, as was recommended by the Truth Commission that was set up to investigate the deadly protests.
"It (the decision) is a very clear sign that the democratic institutions of the Venezuelan state are working," Saab said.
Communication Minister Ernesto Villegas called on supporters of the socialist government "to abide by the TSJ's decision, whether we like it or not," especially as the court has often come under fire from the right for allegedly showing bias towards the government.
Defense Minister Vladimir Padrino Lopez said the measure was a "result of national dialogue and President Nicolas Maduro's sustained efforts to maintain peace."
Source by: news.xinhuanet.com
We should thank China for doing more to raise our standard of living than any country in America’s history
The chart above shows the amazing deflation that has taken place in the US for durable goods (vehicles and parts, household furnishing, furniture, household appliances, household utensils, tools and equipment for the house and garden, sporting goods, video/audio/photographic equipment, computers, etc.) over the last several decades. Compared to 1995, durable goods have fallen in price by 35% (measured by the Personal Consumption Expenditures implicit price deflator for durable goods), while services have increased by 75% and nondurable goods have increased by 46%. Overall, the implicit price deflator for all Personal Consumption Expenditures has increased by 48%.
How to explain the dramatic 35% price decline since 1995 for durable goods? Here’s one very important reason: China. Scott Grannis explains in his recent post “Durable goods deflation is wonderful” (featuring a chart similar to the one above, emphasis added below):
I don’t think it’s a coincidence that the emergence of China as a major exporter of durable goods (e.g., TVs, computers, cameras) coincided with the beginning of a sustained decline in the prices of durable goods. If there’s been an identifiable source of deflation in the US economy, it’s not been the Fed, but the vast increase in the productivity of the Chinese economy, and the vast increase in the volume of imported Chinese goods to the US economy. Thanks to the industrialization of China, the world has been able to produce manufactured goods much more cheaply than ever before.
This has been a boon to just about everyone in the US economy, and the chart above is also proof of that. Consider that the price of “services” is largely driven by wages, and service sector workers are about 86% of total payrolls. What the chart shows is that the earnings of the great majority of US workers have increased 2.7 times more than the price of durable goods. In other words, an hour’s worth of work for the typical American today buys 2.7 times more in the way of durable goods than it did in 1995. When it comes to durable goods, the average American’s purchasing power has nearly tripled over the past 22 years, thanks largely to China.
And China’s total contribution to lower prices in the US isn’t completely captured by the 35% deflation in durable goods because that doesn’t include clothing and footwear (those are classified as nondurable goods), which have also fallen in price over the last twenty years along with durable goods. As the table below of the top US imports from China indicates, Americans purchase a lot of clothing and footwear from China (about $47 billion worth last year), and those consumer items represent three of the top 13 import categories from China (data here). The other 10 items below are durable goods, and would be good examples of the types of goods that have gotten cheaper for Americans since the 1990s due to the emergence of China as a manufacturing superpower.
Bottom Line: We hear a lot about how China “steals” America’s production, jobs, and wealth. According to President Trump, “the money and the jobs China has taken from us is the greatest single theft in the history of the United States.” Here’s another way to look at it: The billions of dollars Americans have saved from buying low-cost products made in China since 1995, and the US jobs that have been created by the additional spending from those savings is one of the biggest transfers of wealth (or “theft” in Trump-speak) in the history of the United States. Instead of continually criticizing our largest trading partner, maybe we should show a little more appreciation to the country that has probably done more to raise America’s standard of living by providing us low-cost durable goods, clothing, and footwear than any country in the history of the United States.
Source by: aei.org