Commentary: Why China’s real estate crisis should make the global travel industry nervous

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Even though general visits to Japan had recovered to 70 % of pre-pandemic levels as of April, Chinese commerce there had decreased by about 85 % since 2019. Foreign travel to well-known Western nations like France, Switzerland, Greece, and Spain has also significantly decreased.

Overall, it is anticipated that China’s outgoing travel spending will be over roughly 70 % this year from its pre-pandemic peak.

To be honest, hospitality in China is recovering to some extent as modest travelers increasingly choose to stay closer to home. According to the China Tourism Academy, domestic tourism will account for 90 % of pre-pandemic levels in 2023. However, the effect of a decline in consumer trust didn’t be mitigated by that alone. The fact that travelers are willing to spend less money is a contributing factor.

Foreign traveling agencies have been shuttering in large numbers in recent years due to demand issues, the effects of COVID-19, and political unrest. About 8,500 commerce officials and businesses filed for bankruptcy between January and April 2022. Even if there were some reopening, the attrition and disturbance were bad news for the industry.

International tourism has had a difficult few years, with the crisis and rising gas prices deterring would-be travelers. A treatment will be that much more difficult for Chinese consumers who are feeling down in the dumps about the market and choosing humble vacations.

Professor of advertising at Miami University, Zhiyong Yang. The Conversation was where this remark second appeared.

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New Zealand’s priority is helping defeat Russia in Ukraine

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A more significant foreign policy issue, namely how the country’s friends in the Indo-Pacific area are responding to the conflict in Ukraine, may be overshadowed by the debate in New Zealand over whether to visit” Pillar 2″ of the AUKUS security agreement.

AUKUS appears to be predicated on the idea that it will thwart or oppose China’s confidence in the Indo-Pacific. However, it is uncertain whether this arrangement would improve New Zealand’s fundamental national interests.

It is also obvious that China is not the only or even the greatest threat to this arrangement, despite the fact that New Zealand’s” stability, security, and prosperity” depend critically on an” international rules-based order ,” according to a recent government document.

The Indo-Pacific region’s capital have been closely observing the Soviet invasion of Ukraine in the meantime. The majority of people backed the UN resolution from last year denouncing Vladimir Putin’s” special military function”( Laos and Vietnam abstained ).

However, just Singapore, a nearby US ally, put Russia under sanctions. Additionally, the statements made by the ASEAN countries regarding the war have no directly criticized Moscow. This is connected to the significant malaise in Asia over the interruption and price shocks brought on by the conflict in Ukraine for international commodities.

hobbies in the Indo-Pacific

The war has caused food and energy prices to soar for Indonesia and many other Southeast Asian nations, as well as a more divided political climate.

Indonesia is the fourth-largest market for Russian substance fertilizer, which is required to grow native rice, and the second-biggest for Russian wheat. 15 % of all global exports of wheat come from countries that are members of the Association of Southeast Asian Nations.

Some Indo-Pacific nations are aware that China and India, two local powerhouses, continue to be crucial allies of Moscow.

China has declined to sign important UN resolutions denouncing Soviet deeds in Ukraine. Beijing has consistently blamed the US and the North Atlantic Treaty Organization for starting the fight.

Since the beginning of the war, China has also significantly increased deal with Russia. In 2023, this bilateral trade will surpass US$ 200 billion, up from$ 70 billion in 2021. It is anticipated that Russian energy supplies to China will rise by more than 40 % this year.

Russia, China, and India

China and Russia’s defense relations are only getting stronger. Since the Ukraine war began, a number of joint activities have been conducted. Beijing has apparently given Iran parts this year for usage in robots being sold to Russia and has quietly provided Russia with military-related technology.

Indian Prime Minister Narendra Modi continues to emphasize near diplomatic and military relationships with Moscow despite being more openly critical of the Ukraine war than China’s Xi Jinping.

Important UN commitments criticizing the war have also been rejected by India. The American government also shows no signs of reducing its reliance on spare parts and technical help for the numerous Russian weapons platforms used by the American military, despite the fact that tensions between India and China have risen.

Additionally, since the war, business upset has increased by more than 30 %, including a tenfold increase in discounted Russian fuel purchased by India.

Last but not least, Indo-Pacific countries may be worried about how the US and the rest of the world will react to the Soviet invasion. They may specifically doubt the West’s ability to endure.

More than$ 75 billion in financial and military support has been provided by the US President Joe Biden’s administration, NATO has increased its membership, and the Russian economy has come under attack from a variety of broad and coordinated sanctions.

However, the US has also made an effort to avoid” provoking” the Putin administration directly while defending Ukraine’s sovereignty.

International backers of Ukraine also support a” land for peace” agreement with Russia. Additionally, it’s still possible that the present military responsibility will be dropped by a new Republican leadership in Washington in 2024.

assisting Ukraine in its fight against China

Given the situation, New Zealand needs to keep a close eye on the relationships between its support for thwarting Russian expansionism and its corporate interests in the Indo-Pacific area.

New Zealand has given Ukraine more than NZ$ 70 million( US$ 41.5 million ) in military and humanitarian aid to date. But given the potential consequences for the Indo-Pacific place if Putin wins any kind of victory, this appears to be fairly modest.

Particularly but when you consider that Ukraine is supposedly a liberal democracy that abandoned its atomic weapons in 1994( in exchange for Russian acknowledgment of its sovereignty and territorial integrity ) and that shares New Zealand’s ambition to reform the UN Security Council.

In fact, the best way for New Zealand to combat Chinese confidence in the Indo-Pacific place would be to significantly boost its military backing of Ukraine.

Any plans Xi Jinping may have for annexing Taiwan may be hampered if Russia is defeated or forced to withdraw. This would help to strengthen the” rules-based order” in the Indo-Pacific region, which is thought to be in New Zealand’s best interests.

Under a Creative Commons license, this essay has been republished from The Conversation. publish the first post.

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China property crisis another blow to global travel

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In the past, Chinese visitors were among the most well-traveled in the world in 2019. Together, they spent more than US$ 250 billion worldwide that year, which is almost twice as much as their closest rivals, the Americans. They also took part in over 150 million international flights.

The Covid-19 pandemic shook both the global and Chinese go markets. However, despite the lifting of pandemic restrictions and a resurgence in international travel, Taiwanese tourists have been slower to return to the stars of the world. Strangely enough, the cause could be found in the homes and grounds that Chinese aircraft fly around.

I’m interested in how China’s faltering real estate market is lowering customer wasting and having an impact on travel destinations around the world as a teacher of selling who specializes in consumer psychology.

Genuine issues, real estate

To comprehend the problem, you must first comprehend China’s recent real estate crisis. How awful is it exactly? Investors worried about potential loan default have sent China’s largest designer, Country Garden, stock plummeting after it lost$ 7.1 billion in the first six weeks of 2023.

The troubled China Evergrande Group, another significant developer, reported a$ 4.5 billion loss during the same time period and last month requested bankruptcy protection in the US. After defaulting on$ 300 billion in debt in 2021, which sparked the current crisis, it attracted attention from around the world.

The fact that regional governments are heavily reliant on tax revenue from property sales, as well as estate taxes and real estate development fees, is one significant, if direct, reason why China’s housing market is so weak. At the same time, real estate has accounted for roughly 70 % of the common population’s property.

Due to these details, both local governments and builders were persuaded to take out large loans to finance new construction. The industry predictedably cooled and has continued to cool when the central government began to impose stricter rules to limit debate and control prices. The best 100 engineers in China saw a 33 % decline in new home sales in July 2023. Costs are also falling.

This has had a ripple effect on the economy of China. Most quickly, selecting has cooled and customers are tightening their budgets despite the declining demand for labor and construction elements. With less funding, local governments are even having trouble surviving; some regions are compelled to reduce benefits and wages for the government.

Why do staycations seem so appealing right now?

For people, who must deal with declining money as housing prices decline, the situation is particularly difficult. As careful consumers prioritize their savings more and more, this has an impact on spending, making the economic hardship for businesses all over the nation worse.

It should come as no surprise that what happens in China doesn’t sit there, at least to anyone who has paid attention to the global economy. And as new, frugal Chinese people cut back on their spending, the international tourism industry has been hit particularly difficult.

Even though general trips to Japan had rebounded to 70 % of pre-pandemic levels by April 2023, Chinese hospitality there had decreased by about 85 % since 2019. Foreign travel to well-known Western countries like France, Switzerland, Greece, and Spain has also drastically decreased.

Overall, it is anticipated that China’s outbound travel spending will be down by almost 70 % from its pre-pandemic peak this year.

Beneath a sign reading Sal Tours, a man and woman behind a desk show paperwork to a woman in front of the desk.
On February 10, 2023, a client and two staff members of an organization in Chengdu, China, talk about options for international travel. Xinhua / Tang Wenhao

To be honest, China’s tourism industry is recovering to some extent as conservative tourists increasingly choose to stay closer to home. According to the China Tourism Academy, domestic tourism may reach 90 % of pre-pandemic levels by 2023.

However, that didn’t be enough to make up for the effect of a decline in consumer confidence. The fact that the amount of money travellers are willing to invest is declining is a contributing factor.

Foreign traveling agencies have been shuttering in large numbers in recent years due to demand issues as well as the effects of Covid-19 and political unrest. About 8,500 hospitality companies and providers filed for bankruptcy between January and April 2022. That churning and disruption are bad news for the industry, even if there is some reopening.

With the crisis and rising gas prices deterring would-be guests, international tourism has faced a difficult few years. A treatment will be that much more difficult for Chinese consumers who are feeling down in the dumps about the market and choosing moderate vacations.

Professor of advertising at Miami University, Zhiyong Yang.

Disclosure: Zhiyong Yang has not disclosed any important affiliations outside of their educational appointment and does not work for, read, individual shares in, or get funding from any company or organization that may profit from this article.

Under a Creative Commons license, this essay has been republished from The Conversation. read the article in its entirety.

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US recession goes AWOL as inflation cools…for now

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When the Federal Reserve Board raises interest rates, the market is expected to experience the following effects: a decline in demand for goods and services, an increase in employment, and stagnation in economic development. Rising costs are feared by the crisis. Higher unemployment is a sign of crisis, which is the method by which higher rates control inflation.

The Fed has raised interest rates 11 days, for a complete boost of five full percentage points, over the past 18 months. Although” core” inflation( minus volatile food and energy prices ) is more like 4 %, inflation has significantly decreased from the 9 % annual rate it reached at its peak and is now around 3 %.

However, unemployment is shockingly low — under 4 %. The sector is still expanding as well.

The consumer price index has fallen to near 3% from 9.1% in June of 2022. There's a debate about why and that debate has implications for the future of interest rates. (Bureau of Labor Statistics Chart)
From 9.1 % in June 2022, the consumer price index has decreased to almost 3 %. There is a discussion about why, and that discussion has implications for how interest charges will change in the future. Bureau of Labor Statistics Chart

Therefore, there has been a disconnect between the outcome( inflation decreasing ) and the mechanism by which it was achieved( recession not occurring ). Naturally, this has raised questions about what is happening and what the Fed should be doing right then and has led to confusion.

The focus of this discussion is on two issues: Why didn’t higher levels lead to a downturn? What caused interest rates to fall if the crisis system didn’t work?

The near-term future of interest rates is at stake in this discussion for producers, farmers, and different business loans. Does prices increase? Did they remain high for how long?

The Fed had faith in the process when it began raising rates. Jerome Powell, the chairman of the Fed, has repeatedly warned that price increases will slow the economy. The central bank was ready for a crisis and significantly higher employment because it was so dedicated to eradicating prices.

In a statement from 2022, Powell said,” These are the unfortunate costs of reducing cpi.” However, failing to bring about price stability may result in much greater suffering.

However, thus far, high interest rates have primarily hurt the consumers who must pay them. Few Americans have lost their jobs as a result of them. The anticipated crisis is no longer present.

Or is the arrival merely a minor tardy? A recession, according to one school of thought, is just around the corner. High interest rates haven’t already hit home, but they soon will.

Consider business loans as evidence in favor of this school of thought. Some businesses locked in lower costs for a few years during the crisis. The Fed’s rate increases haven’t yet had an impact on them, but those debts will eventually need to be renewed at significantly higher levels. That will help the economy lose some of its weather.

If the delayed-recession theory is correct, the Fed may soon start lowering interest rates, particularly if inflation stays average.

According to another school of thought, prices is simply taking a break and isn’t actually dying. In the 1970s, that is what took place. After a brief period of decline, prices picked up and soared also higher. Prices will rise and remain large longer if the Fed determines that inflation is still alive and well.

Some propose the following theory to explain how inflation subsided without unemployment rising: In contrast to some inflationary episodes, this single involved too few goods rather than an excessive amount of money chasing them. It occurred as a result of the pandemic’s disruption of supply chains and the scarcity of merchandise. The inflationary motor ran out of fuel once the supply chain flaws were fixed.

On April 12, 2021, in Washington, DC, National Security Advisor Jake Sullivan and US President Joe Biden are shown participating in a CEO Summit on Semiconductor and Supply Chain Resilience. Asia Times documents, Amr Alfiky, and Pool photos

To put it another way, despite the fact that they may have contributed, prices wasn’t primarily defeated by the Fed’s price increases. It was the strange supply disruption’s natural unwinding. the unwinding pinch-hit for crisis as a different method of controlling inflation. The Fed will be less likely to raise rates or keep them large if it accepts this idea.

Normally, the Fed hasn’t stated how little, if at all, it invests in any of these concepts. A few weeks ago, Fed chair Powell delivered a significant statement that alternated between sounding aggressive and dovish.

The Fed is even more data-dependent than usual as a result of yesterday’s combination of lower prices and ongoing low employment. If inflation increases or the economy warms up, it will slim aggressive; if unemployment rises or inflation falls, the market will purr like a dove.

Fed politicians are going to have a heated internal discussion if either inflation or unemployment stagnates at the present level, or both do.

The best situation for business debtors is for prices to keep falling, enabling the Fed to win and begin lowering rates. Watch the inflation figures the government releases in the coming weeks if you’re trying to predict the interest rate the bank will charge you second spring.

Urban Lehner, a longtime editor and correspondent for the Wall Street Journal Asia, is now the editor-emeritus of DTN / The Progressive Farmer. & nbsp,

Copyright 2023 DTN / The Progressive Farmer is the title of this article, which was first released on September 12 by the latter news organization and is now being republished with authority by Asia Times. All right are reserved. Urban Lehner andnbsp on Twitter: @ urbanize

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Singapore to start importing eggs from Türkiye

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SINGAPORE: The Singapore Food Agency( SFA ) announced on Friday, September 8, that Turkey has been approved as a new nation for exporting chicken eggs to Singapore. & nbsp,

According to SFA,” this brings the number of nations and regions authorized to import bird shell hens to Singapore to 19, away from 12 in 2019.” & nbsp,

No country may be spared from uncertainties in the global food supply, according to SFA, as Singapore continues to improve its food safety. & nbsp,

An extraordinary avian influenza outbreak, supply chain problems, and the rising cost of feed and fuel are to blame for the global egg shortage situation, according to nbsp.

SFA even urged consumers to participate by being adaptable with their food choices in the event of a disturbance. & nbsp,

Building Singapore’s food endurance also requires being open and receptive to learning about new food sources, according to SFA. & nbsp,

Singapore approved the import of chicken egg from Indonesia in April. In December 2022, it also gave the go-ahead for Brunei to import egg. & nbsp,

The fourth egg farm in Singapore will start operating in 2024, according to ISE Foods Holdings, a local operator & nbsp, last October. & nbsp,

Now, imports make up about 70 % of Singapore’s chicken offer. & nbsp,

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Record rainfall floods Hong Kong’s streets and train stations; all schools shut

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Social media videos depicted streets transforming into raging rivers, and one picture showed waters pouring down an elevator into an overflowing train station.

A stop in the Wong Tai Sin city was flooded, and a few more stations were likewise impacted. The state’s Mass Transit Railway announced that it would temporarily halt services on one of its ranges.

Photos showed a waterlogged shopping center in the Chai Wan neighborhood, and the city’s combination port pipe, one of the main arteries connecting Hong Kong area to Kowloon, was likewise submerged in water.

Due to” extreme conditions caused by extensive flooding and serious traffic disruption ,” the government said, all schools have been closed on Friday.

Companies were urged to follow the standard work schedules for the strong wind message 8, which effectively stops the city’s offices and stores.

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FDI bonanza not trickling down in Vietnam

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With some US$ 450 billion in foreign direct investment ( FDI ) being converted into significant gross domestic product ( GDP ) and other gains, Vietnam has become one of the greatest economic success stories in the last 35 years. The nation continues to be a top target for internal FDI, drawing in multinational corporations like Samsung, Intel, LG, Toyota, and Lego.

Because of its beneficial side effects, such as technological advancements, ability transfers, management expertise, and value chain integration, FDI is a desirable mechanism for developing nations. These spillovers take place as a result of interactions with multinational corporations( MNEs ), supplier relationships, and learning and competition in the domestic market. & nbsp,

Local businesses become more competitive over time, which allows them to advance in the value chain and contend with MNEs. However, the evidence at hand suggests that Vietnam hasn’t experienced much of this overflow sensation. & nbsp,

While Vietnam has seen some good externalities over the past five years, such as record-breaking career development and economic growth, these gains have fallen short of expectations and have failed to realize the full potential of the nation.

The market is extremely dependent on FDI for exports because local manufacturing firms have few connections with DFI companies. Over 70 % of Vietnam’s total export value is generated by FDI, indicating that local businesses have not experienced similar growth and development.

When FDI firms are present on the market, home businesses typically struggle to increase andnbsp, their absorption capacity, but it seems the Vietnam case is mainly serious. Limited technology transfers exist between FDI companies and local businesses, and Vietnam’s manufacturing industry has unusually low productivity.

Only & nbsp, a small group of Vietnamese businesses, have been able to advance in the value chain. As a result, their functions are primarily limited to supplying input materials or low-value tasks, which result in to & nbsp, fragmented and ineffective n & m, linkages, and externalities.

A Samsung electronics shop under an official propaganda billboard in the center of Hanoi. Photo: AFP / Hoang Dinh Nam
a Samsung electronics store in the heart of Hanoi that is advertised as standard advertising. Asia Times Files, AFP, and Hoang Dinh Nam are the photographers.

Although such an arrangement can provide significant benefits, just a small portion of Vietnam’s nearly 900,000 businesses can access them, according to ONE senior Vietnamese employee at he was working for Samsung. For instance, Apple purchased AirPods & nbsp in 2020 from 21 local suppliers, but none of them were Vietnamese.

The few spill results from Vietnam’s significant FDI flows are due to a number of factors.

Long ago, it seemed that state policies prioritized quantity over quality. Technology transfer requirements were not completely followed. This has resulted in low-tech FDIs proliferating throughout the business, along with open mismanagement in a number of instances. & nbsp,

Many FDI companies place a high priority on straightforward systems in order to capitalize on Vietnam’s market size, ability, and low labor costs.

The fact that Vietnamese businesses have a relatively brief history of advancement compared to their peers is another factor contributing to the low spill. The growth of the private market was hampered by the implementation of a national control business shortly after the nation’s unification in 1975. & nbsp,

Although the Doi Moi policy was implemented in 1986 to correct this strategic error, Vietnamese businesses also have less market experience than their counterparts in the area, and as a result, their corporate governance is significantly poorer.

Private businesses in Vietnam also face a number of obstacles, most notably & nbsp, when trying to access investment and conventional loans. Some people use more expensive unofficial channels to manage. The competitiveness of local businesses on the international stage is hampered by higher logistics costs and minor corruption with government agencies. & nbsp,

Last but not least, there are still gaps between the common sector’s implementation management reality and government ambitions.

Many of these problems are human-made, and disciplined implementation and powerful policies can help. Vietnam has special advantages, such as its strategic area in Southeast Asia, young, agile people, socially stable environment, remarkable innovation performance, thriving digital economy, and an open economy with numerous free trade agreements.

Hanoi should promote investment in human capital by putting into place a thorough countrywide training programme on digital ability in order to fully capitalize on these benefits and encourage positive externalities, especially in building strong local firms. This will make it easier to implement the national 4.0 strategy andnbsp, and it will support the transformations of the & nBSP, Digital & NbSp and Green & NBSP.

Targeted and extensive investment in energy, online, transportation, and other essential infrastructure will also strengthen home businesses’ competitiveness and inspire the workforce. By encouraging a more effective government through improved give and accountability, this can be improved. & nbsp,

On September 29, 2021, a worker in Hanoi mop the shop’s surface. The market has been severely impacted by evacuations. Asia Times Files, AFP, and Nhac Nguyen

Hanoi may appear to other Asian nations like Malaysia, Singapore, and South Korea to see how digitizing government service can increase productivity and how it will disrupt emerging value chains.

In order to draw MNE offices and research and innovation centers, Vietnam had also enhance the business environment, create laws governing state-owned enterprises, and position itself as a local hub.

Vietnam has been a desirable location for FDI companies, but local businesses have not yet fully benefited from it. With the right plan in place, overcoming these obstacles may enhance local businesses and result in greater success.

At RMIT University Vietnam, Trung Quang Nguyen is the ministry of management’s mind. Interim Manager of the RMIT Vietnam International Business Program is Quyen Dang. Senior Lecturer in International Business at RMIT Vietnam is Erhan Atay.

This andnbsp, post, and was initially published by East Asia Forum and are being reprinted with permission from Creative Commons.

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