I did not realize that China was not a part of the TPP - which is actually a trade pact primarily between the US and Japan.

http://www.wsj.com/articles/chinas-heft-...1444381816

Here is an interesting point that illustrates how China is inevitably moving away from the export their way to growth model. It was only a matter of time before they would have had to do this - or risk being tariffed into oblivion.

Quote:In part that is due to its shift to rely more on domestic consumption. So far, demand at home hasn’t quite kicked in to make up for sputtering exports, but there is evidence consumption is becoming a more important growth driver. Retail sales grew 10.5% in the first eight months this year, compared with GDP growth of around 7%.

Several industries are now looking for growth primarily at home. Jiangsu Nijiaxiang Group Worsted Textile Co., a few hours’ drive from Shanghai in the heartland of Chinese textile production, says that before the 2008-09 global financial crisis, exports accounted for 70% of sales. Now, they represent less than half.

“By the time TPP is implemented, we will already have transferred the base of our business to our own market,” said Miao Zhiying, a manager of manufacturing at the company.

Longer term implications to China, and probably another way to get that cheaper labor back.

Quote:Further down the road, China could face major hurdles if it remains outside the pact, which still awaits tough fights in national legislatures before it can take effect. In the U.S., presidential candidate Hillary Clinton this week joined opponents to the pact.

If implemented, the agreement could make it more difficult for higher-end Chinese industries to break into lucrative markets like the U.S. and will lift competitors like Vietnam and Malaysia just as rising wages and other costs make manufacturing in China more expensive.

IMHO, this is a kick to the balls of China and is meant to force them to play responsibly on the global scale - at least economically. The cost of doing business in China has been steadily increasing to the point that it is no longer a slam dunk to move mfg over there. And in reality, much of the U.S. mfg base is still here anyways since the vast majority of mfg jobs weren't shipped overseas but were actually lost as a result of technology and productivity gains.

(10-09-2015 07:29 AM)miko33 Wrote:  I did not realize that China was not a part of the TPP - which is actually a trade pact primarily between the US and Japan.

http://www.wsj.com/articles/chinas-heft-...1444381816

Here is an interesting point that illustrates how China is inevitably moving away from the export their way to growth model. It was only a matter of time before they would have had to do this - or risk being tariffed into oblivion.

Quote:In part that is due to its shift to rely more on domestic consumption. So far, demand at home hasn’t quite kicked in to make up for sputtering exports, but there is evidence consumption is becoming a more important growth driver. Retail sales grew 10.5% in the first eight months this year, compared with GDP growth of around 7%.

Several industries are now looking for growth primarily at home. Jiangsu Nijiaxiang Group Worsted Textile Co., a few hours’ drive from Shanghai in the heartland of Chinese textile production, says that before the 2008-09 global financial crisis, exports accounted for 70% of sales. Now, they represent less than half.

“By the time TPP is implemented, we will already have transferred the base of our business to our own market,” said Miao Zhiying, a manager of manufacturing at the company.

Longer term implications to China, and probably another way to get that cheaper labor back.

Quote:Further down the road, China could face major hurdles if it remains outside the pact, which still awaits tough fights in national legislatures before it can take effect. In the U.S., presidential candidate Hillary Clinton this week joined opponents to the pact.

If implemented, the agreement could make it more difficult for higher-end Chinese industries to break into lucrative markets like the U.S. and will lift competitors like Vietnam and Malaysia just as rising wages and other costs make manufacturing in China more expensive.

IMHO, this is a kick to the balls of China and is meant to force them to play responsibly on the global scale - at least economically. The cost of doing business in China has been steadily increasing to the point that it is no longer a slam dunk to move mfg over there. And in reality, much of the U.S. mfg base is still here anyways since the vast majority of mfg jobs weren't shipped overseas but were actually lost as a result of technology and productivity gains.

China has a whole host of issues that primarily stem from its form of governance. While we can rightly complain in America about businesses that are too big to fail, it is a problem magnified to a different level in China as failure has a greater cultural and personal impact. Chairman Xi is trying to wrestle with that and other issues such as currency transparency, IP theft/cyber attacks, environmental improvement, raising manufacturing costs and a lack of domestic consumption. All while trying to fight off his opponents and maintain the capitalistic communism.

The TPP is a minor consideration in the face of the aforementioned problems.