Not much help: Despite his use of
tariffs to help skew the playing field in favour of US firms, the very
industries Trump has tried to help have become the weakest links in the
otherwise solid economy.
WASHINGTON: At rallies and whistle-stop campaign tours, President Donald Trump proclaims a renaissance in US factories rebuilding the nation with “American steel”, “American heart” and “American hands”.
But in reality, despite his relentless use of punitive tariffs to help skew the playing field in favour of US companies, the very industries he has tried to help have become the weakest links in the otherwise solid economy.
With just over a year to go before he faces re-election, Trump takes credit for the most vigorous economy in the industrialised world, with the expansion entering its 11th year and historically low unemployment.
But while services and office jobs dominate the US economy, Trump continues to promote the factory and mining jobs that were the lifeblood of the economy in the last century.
“American steel mills are roaring back to life,” he declared last month in Florida – the same day US Steel announced it would idle plants in Michigan and Indiana until “market conditions improve”.
And to West Virginians he said, “The coal industry is back.”
But in fact each of the sectors Trump has championed – coal mining, steel, aluminium and auto manufacturing – have been buffeted by a combination of market forces and changing technologies – factors beyond his control – or damaged by the very things he did to protect them, economists and analysts say.
Last month, a national survey of manufacturing activity hit its lowest level in nearly three years – narrowly avoiding slipping into contraction – while regional surveys have also seen record declines.
In March, the number of workers in US manufacturing shrank for the first time in nearly two years and it is now growing more slowly than the rest of the American workforce.
Trump has imposed tariffs on hundreds of billions in imports, renegotiated trade agreements and dangled the threat of worse over China and Europe and Mexico – all while publicly browbeating companies that close US factories or move production offshore.
But weak foreign demand, a strong US dollar and a decades-long evolution away from domestic manufacturing have progressively shrunk America’s industrial sector, said Gregory Daco, chief US economist at Oxford Economics.
Trump’s world trade war has not helped either.
“The policies that have been implemented in terms of protectionism have hurt the very sectors they were meant to protect. There’s no escaping that,” Daco said. - AFP/The Star
The US is deploying a double standard by calling China's
proposed sanctions on US companies for arms sales to Taiwan a "foolish
action," Chinese mainland analysts said on Sunday, pointing out that the
sanctions could not only cut base material supply to these companies
including rare earths but also block their non-military products from
entering Chinese markets.
While the China-Hong Kong union still sits uncomfortably at times two decades on, the road ahead is slowly but surely being paved.
IT’S lunch time in Hong Kong, but the soya sauce chicken rice seller at Queen’s Road in Shek Tong Tsui is looking distressed as the crowd isn’t up to expectations.
Rental is high in Hong Kong and customers are obliged to share tables in small eateries like the one I was in.
Once eagle-eyed restaurant owners spot the conclusion of a meal, patrons are swiftly handed their bills, subtly suggesting they leave the premises to make way for incoming customers. Otherwise, they’d earn short shrift from irate staff.
Life is hard in HK and most residents feel that it has become much harder.
The older ones are more tolerant and patient because they have lived through the country’s high and low points. They include those born in China who came to the island with their parents.
Retired civil servants complain of promotions bypassing them because the top posts were reserved for the whites under British colonial rule. They felt humiliated and have never forgotten this marginalised treatment.
The young ones are becoming angrier now. They see HK deteriorating, reflected in their inability to buy a flat the size of a car park lot, because something even that small would probably cost millions of ringgit.
HK is a crowded city where space is at a premium. Space, meaning a hole in the sky. Landed properties are for the super rich in a land where being rich alone isn’t enough.
Regular visitors to HK will tell you that the streets are filled with people for a simple reason: it can be claustrophobic living in a 400sq foot – or less – flat.
HK residents sometimes joke that they need to leave their flat to provide “privacy” for newly married children who sometimes can’t afford their own homes and still need to live with their parents.
“The walls are too thin, and it is best we give them some space, you understand what I am saying, right?” said my HK friend as we chuckled about the reference while dining on dim sum.
The waiting period for public housing is five years, if you are lucky, and it’s not uncommon to see an entire family living in one room in many parts of downtown HK. Apparently, more than 200,000 people live in subdivided homes.
Forget politics for a minute and let’s talk facts. An international survey reportedly showed HK sliding 12 places to an embarrassing 41 as a liveable city for Asian expats, its worst ranking in a decade.
“We call ourselves Asia’s world city, but Asians have given us the thumbs down as a liveable city. That’s a paradox that should shame us,” the South China Morning Post (SCMP) newspaper reported.
Over the last two decades, HK people have found themselves priced out of the home market. The cost of living has gone up, but the standard of living has dropped sharply.
The smog has worsened and there are regular reports of hospitals overflowing in the winter months every year, ushering in the routine flu outbreak.
The competition for space is a serious concern in HK. The resentment towards China is simply because people in HK have found it hard to compete with the deluge of mainlanders.
Each time I go to HK, I can’t get past the sight of long queues of people from China – with deep pockets – at luxury goods outlets at Central.
“Last year, 65 million tourists flooded Hong Kong. That’s only about 10 million fewer than for the whole of the United States. Almost 80% who came were mainlanders, most of them day trippers who swarmed residential areas to buy groceries, ruining the quality of life for locals.
“How can life quality improve if you add the four million mainlanders who come monthly, on average, effectively raising Hong Kong’s population to well over 11 million?” pondered columnist Michael Chugani in the SCMP.
Milk powder is a favourite item of the mainlanders when it comes to groceries because of food safety concerns back home. Every mum and pop shop in HK seems to share a similar inventory.
HK people are loud and opinionated. And often crude and crass even, especially, when speaking in Cantonese.
This is a city of very hardworking and motivated people. It’s commonplace for a person to be doing two or three jobs to ensure ends are met, but these people also acknowledge the city has long passed its prime, with stats indicating its lost position as one of Asia’s top cities.
It has surrendered its edge as a financial hub to Shanghai and even nearby Shenzhen.
Chronicling the events of the last two decades reveals how those fortunes changed. Imagine that in 1997, China was very much reliant on HK, largely because the global superpower had not yet made it into the ranks of the World Trade Organisation (WTO), which was stunting and limiting its export trade.
So HK’s position as a channel for entrepôt trade was exploited to deliver mainland-made goods to the rest of the world via its ports, and crucially, by circumventing the WTO’s trade restrictions. But that all changed when China entered the organisation in 2001, and from then HK began to play a diminishing role. The island went from handling half the republic’s trade in 1997 to a measly 12% today.
“In terms of total size and wealth, Hong Kong has also shrunk relative to China, which has experienced more than three decades of astoundingly high economic growth. In 1997, Hong Kong’s economy was one-fifth the size of China’s, and its per capita income was 35 times higher. By 2018, Hong Kong’s economy was barely one-thirtieth the size of China’s. Hong Kong is still richer, but the gap is narrowing, with its per capita income now five times higher than China’s,” claimed the New York Times International.
And to exemplify China’s newly accrued wealth, on a trip to Guangzhou, my jaw dropped when I saw the homes of the mainland Chinese in a sprawling gated property built by Forest City.
The HK film industry has nearly collapsed. With only the TV dramas in Cantonese keeping some actors home, most HK movie stars and singers have moved to China, where they are better paid and command bigger audiences.
Some still struggle to speak fluent Mandarin and drop their Cantonese accent, but most have successfully made the transition.
Knowing the realities of the huge China market, and not wanting to offend their audience, most of these big names opted to stay away from the recent HK protests. Pro-Beijing Jackie Chan was lambasted for pleading ignorance of the protest march.
Still, HK has its assets, though. It has an efficient administration system and remains an important channel. In China, tighter capital control measures are making it increasingly difficult to access outside money, the SCMP said.
“Hong Kong is also a top offshore yuan trading centre, leading the way for wider use of the Chinese currency in trade and finance – a priority for Beijing as it pushes for the yuan’s internationalization.
“... Hong Kong can also do more down the road. It can foster an ecosystem for the yuan currency, developing derivatives and indexes to convince people to hold the yuan in larger amounts,” Oliver Rui, a professor of finance and accounting in China, was quoted.
But China needs to do more to secure the faith of the islanders.
HK people understand and accept they are a part of China. There is no turning back and nothing is going to change that.
Hoisting British flags may be the manifestation of frustration for the idealistic young, but it won’t change their destiny.
At the same time, China needs to wake up to the fact that only 3.1% of those aged between 18 and 29 in HK see themselves as broadly Chinese (China nationality). This compares to 31% in 1997, according to a report based on a survey by the University of Hong Kong.
And we know that many of those who took part in the recent street protests included secondary school children, some not yet even 18 years old.
Even though China has overtaken HK, particularly from an economic standpoint, Beijing needs to foster and maintain a sense of inclusion, especially when the islanders don’t feel they are a part of China.
There was a time when HK residents laughed at mainlanders, calling them the disparaging “Ah Chan”, or village simpletons. However, mainlanders are growing richer and more powerful now. But like all good “bosses”, China needs to treat the island’s residents with respect, and it needs to motivate and win over their hearts and minds. China must make them proud to be Chinese citizens.
THE World Economic Forum estimates that the global cost of corruption annually is at least US$2.6 trillion (RM10.9 trillion) or 5% of global gross domestic product (GDP).
According to the World Bank, businesses and individuals pay over US$1 trillion (RM4.2 trillion) in bribes each year.
Corruption adds up to 10% of the total cost of doing business globally and up to 25% of the cost of procurement contracts in developing countries.
I gathered these shocking facts at a conference. There are other alarming statistics that shed light on the damage brought about by corruption and its dreadful impact on the economy.
Corruption leads to further impoverishment of the poor and other issues in many countries. The average income in countries with a high level of corruption is about one-third of those countries with a low level of corruption. In addition, corrupt countries have a literacy rate that is 25% lower.
The Corruption Perception Index 2018 released by Transparency International shows that on the scale of 0 to 100, where 0 is highly corrupt and 100 is very clean, over two-thirds of 180 countries score below 50, with the average score of 43.
In the index, Denmark ranked first in the world followed by New Zealand second. Finland and Singapore were tied for third with a score of 85. Malaysia was ranked 61st in the world, scoring only 47.
We were ranked the third highest in the Asean region, after Singapore and Brunei. Our country is doing better now with the ongoing investigation of the 1Malaysia Development Bhd scandal and other prominent cases.
In TI’s report, Malaysia is one of the countries on the watch with promising political developments against corruption. However, more solid action is needed in combatting all elusive forms of corruption.
According to Transparency International Malaysia, corruption had cost our country about 4% of its GDP value each year since 2013. Added together, this amounts to a high figure of some RM212.3bil since 2013. For 2017 alone, that figure was a whopping RM46.9bil!
As a comparison, our development expenditure in 2017 was RM48bil. If the value of corruption above was accurate, our development fund was almost “wiped out” because of corruption.
Transparency International Malaysia president Datuk Akhbar Satar said: “This is our estimate. It is likely to be higher in reality (on the value of corruption).”
No country can eliminate corruption completely. However, we can learn from good practices shown in some developed countries, such as the Scandinavian countries which all scored high on the Corruption Perception Index.
Corruption leads to poverty as money collected is not used for the welfare of the nation. As a result, the people end up suffering and paying for the leakage in the system.
If a country is corrupt-free, it will reduce the need for non-governmental organisations (NGOs). NGOs advocate for the rights of marginalised groups. The government can take care of those group when it has a surplus in the budget.
A clean government and system will have a positive impact on many aspects including affordable housing, one of the prominent needs of the people.
Whenever there is corruption, there is a compromise in the delivery of goods and services. The same situation applies to affordable housing.
Someone mentioned to me in the past that “the government isn’t interested in affordable housing as there is literally ‘no money’ to be made in it”!
Things have made a dramatic change for the better since May last year. Our new government is working on a platform of clean government and improving transparency. It plans to build one million affordable homes within two terms of its administration. To make this a reality, the government needs to put in real money to make it happen.
Corruption causes a death spiral that leads to various problems. Without it, a virtuous cycle grows that ensures every part runs smoothly and the marginalised in society are looked after.
With a promise of a cleaner government, we hope we will soon see a virtuous cycle that makes the one million affordable homes an achievable target.
By Datuk Alan Tong, who has over 50 years of experience in property development. He is group chairman of Bukit Kiara Properties. For feedback, please email bkp@bukitkiara.com. The views expressed here are solely that of his own.
China can effectively sanction US companies who sell weapons to Taiwan: experts
