Country Focus
No setback is inimical for China China faces challenges like the economic slowdown, tariff challenges, and its own internal obstacles with strategies that are as aggressive as their results, but as the second largest economy in the world, the country still has its attraction for manufacturers and machine makers that will be displaying at the Chinaplas 2018 show, to be held in Shanghai from 24-27 April.
In what it says is thinking globally and acting locally, German extrusion machinery maker Brückner’s technology centre in Suzhou provides localised products and services, such as clip & chain refurbishment services for sliding and roller chains used in film stretching lines
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MARCH / APRIL 2018
High labour costs a factor China has been the world’s biggest factory, until its manufacturing appeal started losing its shine amid increasing costs of operations and labour. According to Hong Kong-based China Labour Bulletin, pay rates in key cities have doubled. These include Beijing: a key site for some of the major industries such as pharmaceuticals, electronics, and information technology; Shanghai: a major economic, trade, and shipping centre; and Shenzhen, an important site for big-ticket industries like aerospace, automotive, and alternative energy. In Shanghai, for example, the highest pay rate is estimated at US$3.6/month (2017); the rate is lower in smaller provinces. The country’s Made in China 2025 initiative, launched in 2015, is expected to extol China further up the rank of world’s largest manufacturing habitats. But which other country will it still be competing with except the US? Impending duty on Chinese goods by the US China’s GDP as of 2016 was placed at US$11.2 trillion, following the US’s GDP of US$18.6 trillion. And now that the US is poised to exact higher tariffs on certain Chinese imports, will the country’s important sectors miss their targets? Following a probe on violations under Section 301 of the Trade Act of 1974, US President Donald Trump announced recently that a 25% duty will be levied on identified Chinese products including those in the aaerospace, information and communication technology and machinery, which will affect an estimated US$60 billion worth of goods. Addressing the alleged China unfair trade practices, the US is also watchful over “China’s discriminatory technology licensing practices”. A trade war a-brewing? Not quite as the US’s move, according to the US Trade Representative (USTR) is based on the country’s commitment to “rebalancing the US-China trade relationship to achieve more fair and reciprocal trade.” However, the US government still has not formulated a list yet so Chinese manufacturers and plastics processors may have to wait a while to find out how it might affect them. Meanwhile, China is responding with increasing levies on US$3 billion value of goods, alongside a tentative list released by the Ministry of Commerce of 128 products across 7 categories, including certain agricultural products, modified ethanol, seamless steel pipes, recycled aluminium, and more. Tapping its own strengths The ongoing trade tussle may cause ripples in the Chinese economy, which has been cooling for over a year now, and hovers at a growth rate of 6.5%, the government’s growth target in 2018. The US is China’s largest trade partner. Citing January 2018 data from US Census Bureau, the value of US exports to China was valued at over US$9.8 billion, whereas imports from China was at US$45.7 billion.