Ties That Bind - Bay Area Council Economic Institute

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56 Imports Ties That Bind Live animals Industrial machinery, parts Fresh and frozen seafood Batteries Plant cuttings Consumer electronics Perishable fruits and vegetables Cameras Seeds Telecommunications equipment Mineral/chemical compounds LCD/LED panels Pharmaceuticals Semiconductors/integrated circuits Pigments/dyes Sunglasses Semiconductor chemicals Instruments/controls Apparel/Footwear Toys Luggage Sporting goods Computers/office machines Watches/batteries Pearls/semi-precious stones Exports Fresh/frozen fruit, vegetables Aluminum powders, plates Tobacco Pumps/compressors/valves Mineral compounds Machine tools Petroleum products Data processing equipment Vitamins Rubber/plastic injection molds Cosmetics Telecommunications equipment Diagnostic lab reagents Magnetic tapes, discs Chemicals Semiconductors/integrated circuits Industrial silicon Medical testing equipment Plastic/polymer sheets, film Semiconductor test equipment Plastic containers Paints/varnishes Ceramic bricks Bicycle tires Stainless steel sheets, wire Paper/paperboard products The total value of 2005 manufactured trade moving to and from greater China through the Northern California Customs District—including both air and ocean freight—was $26.94 billion, including some $17.6 billion in imports and $9.4 billion in exports. China reported $762 billion in total exports and $660 billion in total imports during 2005. So far, in first quarter 2006, exports have increased by 27% and imports were up by 25% over the same period in 2005. U.S. exports to China overall have grown by 22% annually since China joined the WTO, according to a recently-released report from the U.S. Trade Representative.
Bay Area-China Trade: Behind the Numbers Notwithstanding issues and reversals, China’s implementation of its WTO obligations has led to progressive market opening, with barriers dropping in a broad range of sectors. Specific areas remain sensitive. In the first month after global trade quotas on textiles and apparel were eliminated at the end of December 2004, China’s textile and apparel exports to the U.S. jumped 75% to $1.2 billion. Both the U.S. and United Kingdom reimposed temporary, less restrictive quotas which caused some production to shift to Central America and Southeast Asia, although China continues to dominate the global textile and apparel market. For technology companies, U.S. export controls, designed to bar the transfer of dual use (civilian/military) technology will remain an issue. The valuation of China’s currency is also contentious, with U.S. charges that the yuan is deliberately undervalued (disadvantaging imports but providing a distinct advantage to Chinese exports.) In response, China appears set on a course to allow its currency to gradually appreciate, but is wary of rapid change from fear of speculation, instability and the effects of a sudden rise on marginal producers. In July 2005 the government pegged the yuan to a basket of currencies, replacing the dollar peg that had been in place since 1994. The yuan immediately appreciated by 2.1%. It is expected to rise another 4% against the dollar by the end of 2006, and by 4–5% per annum over the next five years. Estimates vary as to how much the yuan may be currently undervalued, but 20% is considered conservative. It is unclear, though, whether a large revaluation would significantly impact the U.S. deficit, since a cheaper yuan would also lower the cost of imported materials that China uses in its export products, and since U.S. consumers would likely continue spending, but might buy instead from cheaper, non-Chinese suppliers. Services Trade High-value services and technology drive the Bay Area economy, and find a ready market in China’s fast-growing consumer and business environment. Financial Services 0DUNHW (QYLURQPHQW China began reforming its banking system in 1979, in preparation for entering the global economy and offering market-based financial services. A major task involved consolidation of numerous smaller banks throughout the PRC into the “Big Four” national banks—Bank of China (BOC), China Construction Bank (CCB), Industrial and Commercial Bank of China (ICBC), and Agricultural Bank of China (ABC)—a process completed in 1994. In addition, more than a dozen joint-stock holding banks operate nationally, and more than 100 city commercial banks and several hundred rural credit cooperatives offer retail financial services. China’s banking industry is highly concentrated, though the trend is toward dispersion. The top four banks controlled 52.4% of system assets in 2005. Mid-sized joint-stock banks held 15.5% of 57
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The Bay Area Economic Forum wishes
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Bay Area Economic Forum 201 Califor
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Table of Contents Introduction ....
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Introduction About This Report The
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Introduction dollar-denominated ass
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Page 15 and 16: Executive Summary The San Francisco
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Page 21 and 22: 1 A Rich History of Work and Reward
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Page 29 and 30: 2 New Networks Emerge The Bay Area
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Page 33 and 34: New Networks Emerge nomic Law; the
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Page 37 and 38: New Networks Emerge schools on the
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Page 41 and 42: New Networks Emerge financing—ban
Page 43 and 44: New Networks Emerge Since the mid-1
Page 45 and 46: New Networks Emerge (R&D) innovatio
Page 47 and 48: Hong Kong Seeks Its Role New Networ
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Page 51 and 52: New Networks Emerge savings rates a
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Page 57 and 58: 3 Bay Area-China Trade: Behind the
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Investment: Building Global Busines
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5 Building Bridges, Leveraging Asse
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Building Bridges, Leveraging Assets
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Building Bridges, Leveraging Assets
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Acknowledgments This report was co-
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Walter Reichert Hewlett-Packard Co.
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Sources Introduction American Chamb
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Sources Hicks, John D. “The Ameri
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Financial Services Sources “A Gre
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Sources Schmitt, Kellie, “Lost Ho
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Sources “China-Based Worksoft Cre
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Sources Guerin, Didier, “Human Ca
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Sources Cooper, Chris, Ken DeWoskin
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Sources Liou, Fu Tai, “How Taiwan
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