Posts Tagged ‘China’

GE Finds Rougher Sledding in China –

July 18th, 2010 Comments off

General Electric is about as big as multinationals come and this article gives some examples of issue even a large company can have implementing strategy worldwide.

Chinese wind-turbine makers such as Sinovel Wind, Xinjiang Goldwind Science & Technology and Dongfang Electric — buoyed by China’s national spending on wind energy — grew rapidly, stealing share from world leaders such as Denmark’s Vestas Wind Systems A/S and GE, and now rank among the top 10 wind turbine producers globally. In April, China Commercial Aircraft Co., or Comac, selected Hamilton Sundstrand, a subsidiary of United Technologies Corp., to supply the $1 billion worth of electric power generation and distribution systems for a proposed jet plane instead of GE and other bidders.

GE’s Road In China Is Getting Bumpier. Paul Glader, Shai Oster. Wall Street Journal. (Eastern edition). New York, N.Y.: Jul 9, 2010. pg. B.1

U.S. Hits China With Steel Penalty

June 18th, 2010 Comments off

It seems that tensions with China continue to increase over prices set on products imported into the United States.  I posted last fall before about some conflicts over tires and now recently came across this article about steel. In this case, Chinese drill-pipe makers were found to be dumping their product at below-cost levels in the United States.

In a move that could escalate trade tensions between the U.S. and China, the Department of Commerce found that Chinese drill-pipe makers were selling roughly $200 million of pipes in the U.S. for less than their market value.

The ruling, while preliminary, places a 15.7% subsidy on finished and unfinished drill pipe, mainly used for oil and natural gas extraction, coming into U.S. ports beginning Wednesday. The subsidy is applied to the selling price of the pipe.

In my opinion, tariffs tend to escalate with each country involved applying them ever more broadly to more and more products and consumers end up being the loser in the end.

U.S. News: U.S. Hits China With Steel Penalty. Robert Guy Matthews. Wall Street Journal. (Eastern edition). New York, N.Y.: Jun 9, 2010. pg. A.4

Protectionist Measures Expected to Rise

September 15th, 2009 Comments off

WSJ_LogoOn the heels of posting my earlier item from The Economist, I ran across a similar article in today’s Wall Street Journal.  Every semester it seems there is a theme in the media that relates to this course.  Sometimes it is the environment, other times it is quality or transfer pricing, and this semester it might be cross-border pricing issues including dumping and related tariffs/sanctions.

Here are some links for the article I found today along with a couple other WSJ pieces.  I am including two links, as usual, for items because some articles are hidden behind their paywall.  In those cases, you may use the 2nd link and login using your NetDirect credentials.

U.S. News: Protectionist Measures Expected to Rise, Report Warns. John W. Miller. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 15, 2009. pg. A.5

A Protectionist President. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 15, 2009. pg. A.20

China Strikes Back on Trade — Beijing Threatens U.S. Chicken, Car Parts After Washington Slaps Stiff Tariffs on Tires. Ian Johnson. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 14, 2009. pg. A.1

A Protectionist Wave. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 12, 2009. pg. A.14

Protectionism Exposed. Chad P. Bown. Wall Street Journal. (Eastern edition). New York, N.Y.: Aug 6, 2009. pg. A.13

Free Trade Threatened?

September 15th, 2009 Comments off

economist_logoIn Chapter 12, we briefly discuss the legal aspects of pricing.  One issue that we discuss is a practice referred to as “dumping,” which is the practice of goods from one country being under-priced in a foreign market typically because a government subsidy exists in the originating country.  There is a situation brewing currently between the United States and China that has the potential to escalate into just such a contest.

Yet a decision by the White House to impose punitive tariffs (35% for the first year, falling by five percentage points a year, to 25% in the third year) on Chinese-made pneumatic tyres now raises serious doubts about Mr Obama’s commitment to free trade.

The duties are to be imposed on September 26th under a part of American trade law known as “Section 421”. The American government argues that these tyres are being imported into America from China in “such increased quantities and under such conditions as to cause or threaten to cause market disruption to domestic producers” of competing tyres.

Allegations of dumping crop up from time to time and measures such as tariffs or import duties are enacted to protect domestic producers of competing products, but this can have the effect of beginning a trade war where more and more regulation is put in place.  In the end, it can be difficult to even determine if the entire exercise was worth the effort in the first place.

Poultry and tyres sound like small change in the context of the economic relationship between the two big economies. But Eswar Prasad, a professor of trade policy at Cornell University and a former head of the IMF’s China desk, argues that the American action and Chinese retaliation may presage “more protectionist measures to come from both sides”. He notes that China could retaliate much more broadly than by raising a few tariffs: it could, for example, supplement its implicit export subsidies, including an undervalued exchange rate, with more explicit measures to support its export industries and block imports. This could “easily ratchet up into a broader trade war and inflict economic damage on both countries”.

It will be interesting to see how things pan out in the coming months.

America, China and protectionism: Wearing thin. Sep 14th 2009. From

Standing Room Only Air Travel?

July 3rd, 2009 Comments off

A low-fare carrier in China wants to squeeze 40% more passengers on its planes by offering tickets that don’t come with a seat.  They will sell these tickets for less than those for seated passengers so it could be a win-win for the airline and consumers, but I wonder what the practical limit is for flight length on something like this.  Also, I’m not sure what the safety considerations are but they do mention that standing passengers will still be belted in somehow.  Interesting to see where this goes…

Airline To Ask To Stand Passengers In Aisle. SKY News. Monday June 29, 2009

Cost-Cutting & Innovation in Developing Nations

May 28th, 2009 Comments off

As I have mentioned in class, The Economist does an excellent job at exploring the business world — with “world” being the key word.  Unlike many other publications that focus on larger companies/nations, The Economist often contains reports filed from outposts where other journalists dare not tread.  An article from the print edition being published today has been posted to their website and it highlights not only cost-cutting but some of the things we’ve talked about as far as the globalization of business and the fact that competition these days is not limted to XYZ Company down the street or in the next town — it very often can come from the opposite side of the world.

COBBLED together from carts, old cars and anything else to hand, the improvised vehicles used by Indian farmers are often known as jugaad. The term also has a much broader meaning—referring to an innovative, low-cost way of doing something—as goods and services are provided in India at a fraction of the cost of those in developed countries. Ingenuity is a necessity when resources are limited and customers have little money. In a global recession it also provides a way for companies in India and China to expand into foreign markets where consumers are seeking better value for money.

A snip at the price. May 28th 2009. From The Economist print edition

If you are interested in other articles from this week’s issue, there is a page that contains links to all the articles:

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