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China’s Industrial Profits Set to Rebound in 2024 with Up to 11% Increase Due to Improved US Export Outlook

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An Overview

China’s industrial sector is set for a rebound in 2024, with profits expected to increase by as much as 11%. According to reports, total profits at industrial enterprises with annual revenue of at least 20 million yuan (US$2.8 million) from their main operations fell by 2.3% in 2023. However, improved external demand, particularly from the United States, is expected to drive growth this year.

A bustling Chinese factory with modern machinery and production lines, shipping crates labeled for US export, and a chart showing a steady 11% increase in industrial profits for 2024

The projected profit increase follows a 6.8% growth in industrial output in December 2023. The outlook is particularly positive for China’s export-oriented industries, which are expected to benefit from the improved US export outlook. Overall, the rebound in China’s industrial profits is expected to be driven by a combination of factors, including increased demand for goods and services, rising productivity, and favorable government policies.

Key Takeaways

  • China’s industrial sector is set for a rebound in 2024, with profits expected to increase by as much as 11%.
  • Improved external demand, particularly from the United States, is expected to drive growth this year.
  • The rebound in China’s industrial profits is expected to be driven by a combination of factors, including increased demand for goods and services, rising productivity, and favorable government policies.

Overview of China’s Industrial Profits

Factory machines hum as profits soar in China, fueled by US exports. A bustling industrial landscape with rising numbers, set for a lucrative 2024

China’s industrial profits experienced a decline in 2023, with total profits at industrial enterprises with annual revenue of at least 20 million yuan falling by 2.3 per cent from their main operations. However, the outlook for 2024 is positive, with projections indicating a rebound in profits due to improved external demand.

2023 Profit Decline

The decline in profits in 2023 can be attributed to a combination of factors, including a slowdown in economic growth, rising raw material costs, and increased competition. The COVID-19 pandemic also had a significant impact on industrial production, causing disruptions to supply chains and reducing demand for certain products.

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2024 Profit Rebound Projections

Despite the challenges faced in 2023, the outlook for China’s industrial profits in 2024 is positive. Improved external demand is expected to drive profits up by between 7 and 11 per cent, with the US export outlook being a key factor. Industrial output also grew by 6.8 per cent in December, indicating a strong recovery in production.

To capitalize on this rebound, Chinese industrial enterprises will need to continue to adapt to changing market conditions and focus on innovation and efficiency. The government’s ongoing efforts to promote high-quality growth and support the development of strategic industries are also expected to contribute to the sector’s recovery.

Factors Influencing the Rebound

Industrial profits in China surge 11% in 2024 due to increased US exports, illustrating economic rebound

Improved US Export Outlook

China’s industrial profits are expected to rebound in 2024 due to an improved US export outlook. The US is China’s largest export market, and any improvement in demand from this market is likely to boost China’s industrial profits. This is particularly true for industries that are heavily reliant on exports, such as electronics, machinery, and textiles.

The US-China trade war had a significant impact on China’s industrial profits, with many companies reporting lower profits due to the tariffs imposed by the US. However, the recent improvement in US-China relations and the removal of some of the tariffs have created a more favorable environment for exports. This, coupled with the expected increase in demand from the US, is likely to result in a significant rebound in China’s industrial profits in 2024.

Industrial Output Growth in December

Another factor that is likely to influence the rebound in China’s industrial profits is the growth in industrial output in December. According to official data, China’s industrial output grew by 6.8 per cent in December, which is the fastest pace in six months. This growth was driven by an increase in production in the electronics, machinery, and automobile industries.

The growth in industrial output is a positive sign for China’s industrial sector, as it indicates that there is strong demand for industrial products. This is likely to translate into higher profits for industrial companies, as they are able to sell more products at higher prices. Additionally, the growth in industrial output is likely to lead to an increase in investment in the sector, which could further boost profits in the coming years.

In conclusion, the improved US export outlook and the growth in industrial output are two key factors that are likely to influence the rebound in China’s industrial profits in 2024. While there are other factors that could impact industrial profits, such as changes in government policy and fluctuations in global demand, these two factors are expected to have the greatest impact on the sector in the coming year.

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Projected Profit Increase for 2024

China's industrial profits soar in 2024, up 11% from improved US exports. Graph shows steady increase

China’s industrial profits are set for a rebound in 2024, with projections indicating an increase of up to 11% due to an improved US export outlook. According to reports, total profits at industrial enterprises with annual revenue of at least 20 million yuan (US$2.8 million) from their main operations fell by 2.3% in the previous year.

However, the situation is expected to improve significantly, with external demand set to increase, leading to a projected profit increase of between 7 and 11% this year. This prediction is supported by the growth in industrial output, which rose by 6.8% in December.

The improved US export outlook is a significant factor in the projected profit increase for China’s industrial sector. The US is one of China’s major export markets, and a boost in demand from this market is likely to have a positive impact on China’s industrial profits.

Overall, the outlook for China’s industrial sector is positive, with projections indicating a significant rebound in 2024. This is likely to be driven by improved external demand, which is expected to boost China’s industrial output and profits.

Frequently Asked Questions

China's industrial sector shows a significant rebound in 2024, with profits expected to increase by up to 11% due to improved US exports

What factors are contributing to the projected rebound in China’s industrial profits in 2024?

Improved external demand and industrial output growth are the main factors contributing to the projected rebound in China’s industrial profits in 2024. According to recent reports, total profits at industrial enterprises with annual revenue of at least 20 million yuan fell by 2.3 per cent last year. However, with industrial output growing by 6.8 per cent in December and an improved US export outlook, profits are expected to increase by between 7 and 11 per cent this year.

How did the US export outlook influence China’s industrial profit projections?

The US export outlook is one of the factors that is expected to contribute to the increase in China’s industrial profits in 2024. The improved external demand is expected to lead to an increase in exports, which in turn will boost industrial profits. The US and China have recently reached a trade agreement, which is expected to further strengthen US-China trade relations.

What was the percentage decline in China’s industrial profits last year?

According to recent reports, total profits at industrial enterprises with annual revenue of at least 20 million yuan fell by 2.3 per cent last year.

What is the expected range of profit growth for Chinese industrial enterprises this year?

With industrial output growing by 6.8 per cent in December and an improved US export outlook, profits are expected to increase by between 7 and 11 per cent this year.

How much did China’s industrial output grow in December?

China’s industrial output grew by 6.8 per cent in December.

What is the minimum annual revenue for industrial enterprises to be included in China’s profit statistics?

Industrial enterprises with annual revenue of at least 20 million yuan are included in China’s profit statistics.

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US-UK Role in Changing World Order : Speculations,Concerns and Strategies

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person holding world globe facing mountain

The world order is in a state of flux, with shifting power dynamics, rising geopolitical tensions, and emerging challenges that require a concerted effort from global leaders. As two of the most influential nations, the United States (US) and the United Kingdom (UK) have a crucial role to play in shaping the future of the international system. However, their relationship and individual strategies are facing significant challenges that must be addressed to maintain their influence and promote stability.

Speculations on the Changing World Order

The current world order is characterized by the rise of new powers, such as China, and the declining influence of traditional Western powers like the US and UK[1]. This shift is driven by factors such as the digital revolution, globalization, and the changing balance of economic and political power[1]. The US’s “America First” stance and the UK’s post-Brexit challenges have further complicated the situation, leading to a more volatile and unpredictable international environment[1][4].

Concerns for the US-UK Relationship

The US-UK relationship, often referred to as the “special relationship,” is facing significant challenges. The US has taken unilateral decisions on key issues, such as the Iran nuclear deal and trade policy, which have undermined the UK’s interests[1]. The UK has struggled to influence the US administration, which is a reflection of a broader shift in the US towards a more inward-looking approach[1]. Additionally, the UK’s decision to leave the European Union (EU) has weakened its position on the global stage and complicated its relationship with the US[4].

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Strategies for the US and UK

To navigate the changing world order, the US and UK must adapt their strategies and priorities. Here are some key areas that require attention:

Strengthening the Transatlantic Alliance

Despite the challenges, the US-UK relationship remains crucial for maintaining stability and promoting shared values in the international system. Both countries should work to strengthen the transatlantic alliance by fostering closer cooperation on key issues, such as security, trade, and climate change[1][5].

Engaging with Emerging Powers

The rise of new powers, particularly China, presents both opportunities and challenges for the US and UK. While it is important to work with these countries to address global challenges, it is also crucial to ensure that such cooperation is consistent with international humanitarian law and balanced with other close friendships, such as with Japan[1][3].

Promoting Values-Based Foreign Policy

The US and UK should put values at the heart of their foreign policy, promoting democracy, human rights, and the rule of law[2]. This includes tackling entrenched unequal power relations in the current international order and making a substantial impact on poverty and inequality[2].

Strengthening Multilateral Institutions

The US and UK should work to strengthen multilateral institutions, such as the United Nations and the World Trade Organization, to promote global cooperation and address shared challenges[1][3]. This includes reforming these institutions to make them more representative and effective in the face of new challenges[3].

Investing in Soft Power

The US and UK should invest in their soft power assets, such as cultural diplomacy, education, and development assistance, to promote their influence and values on the global stage[1][3]. This includes strengthening partnerships with civil society organizations and promoting inclusive representation at home and abroad[2].

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Conclusion

The changing world order presents significant challenges for the US and UK, but also opportunities to shape a more stable and equitable international system. By adapting their strategies, strengthening their relationship, and promoting shared values, the US and UK can continue to play a leading role in shaping the future of the world order. However, this will require a long-term commitment to multilateralism, values-based foreign policy, and inclusive global governance.

References:
[1] [PDF] UK foreign policy in a shifting world order – Parliament (publications) https://publications.parliament.uk/pa/ld201719/ldselect/ldintrel/250/250.pdf
[2] Finding Britain’s Role in a Changing World: Building a values-based … https://policy-practice.oxfam.org/resources/finding-britains-role-in-a-changing-world-building-a-values-based-foreign-polic-620950/
[3] New world order (politics) – Wikipedia https://en.wikipedia.org/wiki/New_world_order_%28politics%29
[4] The United Kingdom’s Role in the World – CSIS https://www.csis.org/analysis/united-kingdoms-role-world
[5] Three foreign policy priorities for the next UK government https://www.chathamhouse.org/2024/05/three-foreign-policy-priorities-next-uk-government
[6] An Assessment of Geopolitics and Changing World Order – Part 1 https://monetagroup.com/an-assessment-of-geopolitics-and-changing-world-order-part-1/
[7] Has the UK put all its eggs in one basket in a shifting World order? https://www.linkedin.com/pulse/has-uk-put-all-its-eggs-one-basket-shifting-world-8nape
[8] House of Lords – UK foreign policy in a shifting world order https://publications.parliament.uk/pa/ld201719/ldselect/ldintrel/250/25009.htm

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The Battle Over TikTok: Can the Company Fight Back?

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The battle over TikTok has raged for months as the United States government has grown increasingly concerned about the potential security risks posed by the popular social media app’s Chinese ownership. In August 2020, President Trump signed an executive order that would have banned TikTok in the US unless its ownership was transferred to an American company. A federal judge later blocked the order, but the threat of a ban has loomed over the app ever since.

A tense standoff in Congress as lawmakers debate the fate of TikTok, with the app's Chinese owner at the center of the controversy

Recently, the US Congress took a first step towards forcing TikTok’s Chinese owner, ByteDance, to sell the app. The move came in the form of the Holding Foreign Companies Accountable Act, which was signed into law in December 2020. The law requires foreign companies listed on US stock exchanges to comply with US auditing regulations or face delisting. ByteDance is currently in the process of exploring options to comply with the law, including a possible sale of TikTok to a US buyer.

Key Takeaways

  • The US government has been concerned about the security risks posed by TikTok’s Chinese ownership, and the threat of a ban has loomed over the app for months.
  • The Holding Foreign Companies Accountable Act requires foreign companies listed on US stock exchanges to comply with US auditing regulations or face delisting, which could force ByteDance to sell TikTok to a US buyer.
  • The battle over TikTok highlights the economic and political stakes of technology ownership and raises important questions about legislative actions and corporate responses to national security concerns.

Legislative Actions

US Congress passed a bill targeting TikTok's Chinese owner. The scene shows lawmakers debating and voting on the legislation

The battle over TikTok has led to a series of legislative actions by the US Congress. In August 2020, Congress took the first step towards forcing the app’s Chinese owner, ByteDance, to divest TikTok’s US operations to a US-based company. This was in response to concerns over national security and the potential for user data to be accessed by the Chinese government.

Congressional Steps Toward Divestment

The divestment order was issued by the Committee on Foreign Investment in the United States (CFIUS), a government agency responsible for reviewing foreign investment in US companies. This order required ByteDance to sell TikTok’s US operations within 90 days, or face a ban on the app in the US.

In response, ByteDance filed a lawsuit challenging the divestment order, arguing that it was not given due process and that the order was politically motivated. However, the lawsuit was dismissed by a federal judge in December 2020.

Legal Implications

The battle over TikTok has raised important legal questions about the relationship between national security and foreign investment in the US. The divestment order issued by CFIUS was based on concerns over national security, but it is unclear whether such concerns can be used to justify forcing a foreign company to sell its US operations.

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Moreover, the battle over TikTok has highlighted the challenges of regulating social media platforms that are owned by foreign companies. TikTok’s Chinese ownership has raised concerns over the potential for user data to be accessed by the Chinese government, leading to calls for greater regulation of social media platforms.

Overall, the battle over TikTok has demonstrated the complex legal and regulatory challenges posed by foreign investment in the US, particularly in the technology sector. While Congress has taken steps towards divesting TikTok’s US operations, the legal implications of such actions remain unclear.

Corporate Response

US Congress confronts TikTok's Chinese owner in a corporate showdown

Company’s Defense Strategy

TikTok’s Chinese owner, ByteDance, has vowed to fight back against the US Congress’s decision to force it to sell off the app’s US operations. The company is reportedly considering several options to defend itself, including legal action, lobbying efforts, and potential partnerships with US companies.

ByteDance has argued that the move by Congress is politically motivated and violates the company’s rights. The company has also emphasized that TikTok’s US user data is stored in the US and is not subject to Chinese government control.

To bolster its defence, ByteDance has hired a team of high-profile lawyers, including former US Solicitor General Theodore Olson. The company is also reportedly exploring potential partnerships with US companies, such as Microsoft, to help address concerns about data security.

Public Relations Efforts

In addition to its legal and lobbying efforts, ByteDance has launched a public relations campaign to defend the app and its Chinese ownership. The company has emphasized TikTok’s popularity and cultural impact, highlighting its role in promoting diversity and creativity.

ByteDance has also sought to distance itself from the Chinese government, emphasizing that it operates independently and is not subject to Chinese censorship laws. The company has also emphasized its commitment to data privacy and security, noting that it stores user data in the US and other countries outside of China.

Despite these efforts, ByteDance faces an uphill battle to defend TikTok’s US operations. The company will need to address concerns about data security and potential Chinese government influence, while also convincing US lawmakers and regulators that it can operate independently and in the best interests of US users.

Economic and Political Stakes

US Congress debates TikTok's fate, symbolized by a scale weighing economic and political stakes

The battle over TikTok has major economic and political implications for both the United States and China. With more than 91 million users in the US alone, TikTok has become a significant player in the social media landscape, and its popularity has made it a target of concern for US lawmakers. The recent moves by the US Congress to force the app’s Chinese owner to sell it off have raised questions about the future of the app and its impact on US-China relations.

Impact on US-China Relations

The battle over TikTok has the potential to further strain already tense relations between the US and China. The Trump administration has been vocal in its criticism of China, and the move to force the sale of TikTok is just the latest in a series of actions taken against Chinese companies. The Chinese government has responded with its own set of measures, including new restrictions on US tech companies operating in China.

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The ongoing battle over TikTok has also highlighted concerns about data privacy and security. US lawmakers have raised concerns about the app’s data collection practices and the potential for the Chinese government to access user data. China has denied any wrongdoing and has accused the US of using national security concerns as a pretext for protectionism.

Consequences for Global Markets

The battle over TikTok has wider implications for global markets. The app’s popularity has made it a significant player in the social media landscape, and its forced sale could have ripple effects on the tech industry as a whole. The move could also have implications for other Chinese companies operating in the US, and could lead to a wider crackdown on Chinese investment in the US.

The battle over TikTok is likely to continue for some time, and the outcome is far from certain. However, the economic and political stakes are high, and the impact of the battle could be felt for years to come.

Frequently Asked Questions

US Congress confronts TikTok's Chinese owner in a battle

What is the rationale behind the US Congress’s move to force a sale of TikTok?

The US Congress has expressed concerns about the potential national security risks posed by TikTok’s ownership by Chinese company ByteDance. Lawmakers have cited fears that TikTok’s data collection practices may be used by the Chinese government to gather sensitive information on US citizens. The move to force a sale of TikTok is seen as a way to mitigate these risks.

What is the status of the legislation aimed at banning TikTok?

As of the current date, no legislation has been passed to ban TikTok in the US. However, the US Department of Commerce has taken steps to restrict the app’s use in the country. In September 2020, the Department announced that it would ban TikTok from US app stores, though this decision was later temporarily blocked by a federal judge.

How might TikTok’s ownership respond to the US legislative actions?

TikTok’s ownership has previously pushed back against US legislative actions aimed at restricting the app’s use. The company has argued that it operates independently of the Chinese government and has taken steps to distance itself from its Chinese roots, including hiring US-based executives and establishing a US-based subsidiary. However, it remains to be seen how the company will respond to the latest legislative actions aimed at forcing a sale of the app.

What are the potential consequences for users if TikTok is banned in the US?

If TikTok is banned in the US, users may lose access to the app’s social media features, including the ability to create and share short-form videos. However, it is worth noting that TikTok’s popularity has led to the emergence of several alternative social media apps that offer similar features, such as Instagram’s Reels and Byte, which was created by the co-founder of Vine.

Has any legislation been passed to date regarding the prohibition of TikTok?

As of the current date, no legislation has been passed to prohibit the use of TikTok in the US. However, the US government has taken steps to restrict the app’s use, including the aforementioned ban on TikTok in US app stores.

Which other countries have taken steps to ban or restrict TikTok?

Several other countries, including India and Pakistan, have taken steps to ban or restrict TikTok over concerns about national security and user privacy. In India, TikTok was banned in June 2020, along with several other Chinese-owned apps. In Pakistan, the government has announced plans to ban TikTok unless the app takes steps to address concerns about “obscenity and immorality.”

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Decoding China’s Consumer Price Rebound Amid Deflation Risks: Insights & Analysis

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Introduction

China’s consumer prices have shown signs of rebounding, thanks to a holiday boom. The Consumer Price Index (CPI) grew by 0.7% year on year in February, surpassing expectations and marking the first rise after six consecutive months of decline. However, amidst this positive development, there are looming concerns about deflation risks as factory gate prices continue to fall for the 17th consecutive month. This article delves into the intricacies of China’s current economic landscape, analyzing the factors contributing to the CPI growth and exploring the implications of persistent deflation risks.

1: Understanding China’s Consumer Price Index (CPI) Growth
The Consumer Price Index (CPI) serves as a key indicator of inflation and reflects changes in the prices paid by consumers for goods and services. The recent 0.7% year-on-year growth in China’s CPI in February has sparked optimism among economists and policymakers. This growth can be attributed to various factors, including increased consumer spending during holidays, rising demand for certain goods and services, and government stimulus measures aimed at boosting consumption.

2: Implications of CPI Growth on China’s Economy
The rebound in consumer prices has significant implications for China’s economy. A positive CPI growth indicates a healthier level of inflation, which can stimulate economic activity by encouraging spending and investment. It also reflects improved consumer confidence and overall economic stability. However, it is essential to monitor the sustainability of this growth and its impact on other economic indicators.

3: Analyzing Deflation Risks in China’s Economy
Despite the encouraging CPI growth, there are concerns about deflation risks looming over China’s economy. The continuous decline in factory gate prices for the 17th consecutive month is seen as a warning signal by analysts. Deflation can have detrimental effects on an economy, leading to reduced consumer spending, lower corporate profits, and potential economic stagnation. Policymakers must address these deflation risks proactively to prevent long-term negative consequences.

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4: Factors Contributing to Deflation Risks
Several factors contribute to the deflation risks faced by China’s economy. Overcapacity in certain industries, weak global demand, trade tensions, and technological advancements leading to cost reductions are some of the key factors driving down factory gate prices. Addressing these underlying issues requires a comprehensive approach that involves structural reforms, targeted stimulus measures, and strategic policy interventions.

5: Strategies to Mitigate Deflation Risks
To mitigate deflation risks and sustain economic growth, policymakers in China need to implement effective strategies. These may include promoting domestic consumption through incentives and subsidies, fostering innovation and technological advancement to enhance competitiveness, addressing overcapacity through industry restructuring, and maintaining a stable macroeconomic environment through prudent monetary and fiscal policies.

Conclusion
China’s consumer price rebound offers a glimmer of hope amidst challenging economic conditions. While the CPI growth signals positive momentum in the short term, it is essential to address the underlying deflation risks to ensure long-term economic stability and growth. By understanding the factors contributing to CPI growth and deflation risks, policymakers can formulate targeted strategies to navigate these challenges effectively. Monitoring economic indicators closely and implementing proactive measures will be crucial in safeguarding China’s economy against potential downturns.

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