After years of negotiation, the Trans-Pacific Partnership (TPP) deal was finally reached on Monday. This means that a new trade bloc has been created with reduced trade barriers among the 12 countries that signed. Since these countries together are responsible for 40% of the world’s GDP and 26% of total trade, the impacts of TPP are far-reaching and significant to the world economy, as well as to the U.S. economy.
globalEDGE Blog - By Author: Zheng Nie
The Internet has become an indispensable element in peoples' lives in the 21st century. South Africa is no exception. The Internet user base in South Africa increased from 2.4 million in 2000 to 12.3 million in 2012. The increasing number of internet users presents great opportunities for online businesses.
Sitting at the southernmost point of Africa, South Africa is a land of diamonds, gold, and fine wine. It has overcome racial challenges, as well as many other cultural and economic hurdles. Now, South Africa is emerging as one of the most prominent, potential business markets in the world.
People are always the ones who suffer the most in war, especially this time in Syria. Half of the country’s population has been displaced and 4 million people have fled as refugees to neighboring countries since the country’s civil war began in 2011. The majority have ended up in Jordan, Turkey, and Lebanon, and new refugees are now seeking “new homes” in Germany and Hungary. Some countries refuse to take refugees because they are considered liabilities for an economy. But some others, such as Germany, take refugees in as opportunities for economic growth.
Since the Asian Infrastructure Investment Bank (AIIB) was founded in 2014, there have been many discussions around this multilateral development bank concerning its purposes and functions. Despite the skepticism, AIIB, once launched, will accelerate Asia’s infrastructure development and international trade. This blog will briefly explain the impacts of the high-speed Silk Road, one of such projects that AIIB has announced recently.
Information Communications Technology (ICT) spending in Australia is forecasted to grow to $49,452.6 million by 2016, according to new research from International Data Corporation. While the market is growing exponentially, Australia is currently facing a shortage of skilled workers in its ICT sector. As I dug deeper into the labor force issue, I found that the future outlook for the Australian ICT industry does not seem as positive as the growth forecast indicates.
As the global crude oil price has fallen by more than 50% in recent months, Nigeria, a country that relies heavily on exporting oil and gas, has seen its currency fall accordingly and is now exploring opportunities in the technology industry. Recently, a tech boom has swept across Africa and more than 75% of venture investments in Africa have gone into the technology sector. Economists believe that technology will be the future of the African economy.
With diverse ecosystems, the ocean is a key source of marine life and resources. Because the Caribbean region is surrounded by ocean, exporting marine resources could potentially be a key driver in the region's economy. However, because of overexploitation and poor management, many Caribbean countries have not made full use of their marine resources, which has limited their ability to expand economically.
In this high-tech century, news about hackers breaking into corporate information systems is not surprising anymore. Rather, it has become a common administrative issue for businesses and requires special attention from the board of directors, since cyber-security breaches can result in significant business losses if not handled properly. This blog post will review the recent findings from the World Economic Forum and McKinsey and provide the approaches that company leaders can follow to reduce cyber risks.
The Internet of Things (IoT) connects physical objects with the internet and provides the ability to transfer data over a network. This innovative concept is likely to have an enormous impact on the IT sector. This technology is already revolutionizing the sports industry, as large amounts of data are captured during sporting events to help improve player performance and strategy. IoT is expected to generate data from diverse locations and communicate it through massive networks, thereby increasing the need to better store and process such data. Cloud computing is there to solve this problem, which enables central data storage and remote online access to various resources and services.
As foreign investors realize China is becoming more expensive for manufacturing, they are turning their eyes to countries in Southeast Asia. Vietnam, for example, saw its foreign direct investment (FDI) grow 60% year over year in the fourth quarter of 2014. A large proportion of the FDI has gone to the high-tech industry. While people are expecting the technology boom to continue into the future, Vietnam is preparing a series of regulations for the technology industry, which may slow down the growth of IT business in the country.
Since the Eurozone has been at a very low inflation level for quite some time and people have become more conservative in their spending, the issue of pushing the economy up has been raised by the European Central Bank. The ECB President, Mr. Draghi said, “for growth to pick up, you need investment. For investment, you need confidence. And for confidence, you need structural reforms.” Then, a 60-billion-euro-a-month bond purchase program became such a structural reform last week. This blog will examine both the regional and international impacts of this quantitative easing policy.
This past year was considered a significant year for the global airline industry. The disappearance of AirAsia Flight 8501 and the explosion of the Malaysia Airlines Boeing 777 in the Ukraine war zone have raised questions about the safety of Asia’s low-cost airliners. Meanwhile, as oil prices drop, the cost of operating airlines will definitely decrease, but it may or may not help the global airline industry.
As Africa becomes more integrated into global value chains, existing trade agreements are not enough to fulfill the increasing foreign investments because they are complex and obscure. With the hope of creating easier access to global market for local businesses, the three largest trade groups in Africa came up with the idea of the “African Free Trade Zone,” which aims to create a single trade union in Africa. The idea has been evaluated since 2008 and finally it will be realized later this month.
After eight years of negotiation, China and Australia finally drew a free trade deal on last Monday. This agreement signals a transformational change in the economic relations between China and Australia because trade tariffs in dairy, beef, and horticulture products will be completely eliminated within the next couple years. Without a doubt, it will greatly facilitate the trade between these two countries. On the other hand, Canada, one of Australia's main competitors, is now worried about its exports to China.
It has been almost a year since the expiry of the 75-year-old concession of Abu Dhabi with western oil companies. Having been working as service providers and not getting paid in oil this past year, the Western oil companies are among the hopefuls to win the bidding for Abu Dhabi’s new oil concession. These companies are hoping to keep their stakes in the Persian Gulf, which is the one of the few major oil-producing areas that allows international companies to hold direct shares. Now they are worried about losing their stakes because of the rising interest of Asian oil companies in this lucrative oil business.
While Liberia was trying to become the next economic superstar in Africa, Ebola came and brought a sharp break in economic growth. The decline in growth is not just happening in Liberia. Across Africa, The Ebola outbreak has brought a series of pessimistic consequences: construction has halted, people have lost jobs, and foreign investors have left. Above all, Ebola has ravaged the health sector and the agriculture industry.
The slogan, “Time is Money, Efficiency is Life”, has driven China to become the world’s largest manufacturing power over the last decade. But the era of cheap China seems to be drawing to an end now. A similar issue is happening in another part of the world. Australia, the old auto-manufacturing giant, is seeing an increasing number of auto-production lines drawing out of the country and moving to lower-cost destinations around the world. The global manufacturing industry is currently undergoing dramatic changes.
Since the Nordic economies are relatively small and open, exporting constitutes an important part of the economic activities in the Nordic region. Denmark, Norway, and Sweden have all had greater exports than imports every year since 1995. As the Nordic countries focus on exporting a few different products, each of them contributes to the growth of the regional Nordic economy and they together form a competitive market in the global economy.
China and India have been in an economic race for many years and although China is still ahead, the gap between the two countries is shrinking. While the public fears that China’s GDP growth will continue to decrease, India seems to be making a revolutionary growth story of its own, as the new Prime Minister Narenda Modi takes control. Many find that Modi’s economic revival strategy mirrors China's economic strategy in the early 2000s and India hopes to achieve a similar level of economic success and growth.
Over the last forty years, Luxembourg has become the financial hub in Europe and has served private and corporate clients all over the world, thanks to its extremely open market policy. The country’s financial sector is well-known globally for its expertise and sophistication. Even when most countries were suffering from the financial crisis, the banks in Luxembourg continued to earn substantial profits. According to a KPMG banking report, Luxembourg's bank profits grew by 42% in 2012. So, what has contributed to Luxembourg’s success in the global financial market and what is unique about Luxembourg’s banking industry?
During the Great Depression of the 1930s, world trade declined sharply and employment and living standards plummeted in many countries. In order to avoid a repetition of the same economic disaster, the International Monetary Fund (IMF) was established after World War II to oversee the international monetary system and to encourage its member countries to trade with each other. The IMF was created to assist the worldwide economic recovery and it continues to work on its mission until today.
As Brazil is busy finishing the last construction for the 2014 World Cup, Qatar, the host of the 2022 World Cup, has started its infrastructure improvement plan to welcome its guests from all over the world. This preparation has really brought Qatar into the eyes of investors with high expectations for economic gains. Qatar is not alone, as we see millions of “host money” from foreign investors has pushed the UAE’s stock market also to a new high. This blog will give you the overviews of Qatar’s and the UAE’s economy in the recent years and will explain the reason why Qatar and the UAE have experienced growth in foreign investment.
Nowadays, people have more opportunities to move to different parts of the world than ever before, thanks to globalization. Global trade, therefore, is changing with the increasing mobility. A new report says that, while the last era of globalization was driven largely by sourcing low-cost production, the next era will center on the rise of the global knowledge economy.
As the world's population continues to grow, more and more countries are beginning to realize the importance of improving infrastructure. The 2012-2013 Global Competitiveness Report repeatedly cites infrastructure as the single biggest hindrance to doing business in India, well ahead of corruption and bureaucracy. To address the needs of urbanization and global business, governments around the world are spending large amounts of money on infrastructure projects.
Organic food is increasingly becoming an active topic in international trade due to the increase in people’s living standards worldwide, improved transportation, and urbanization. In developing countries, we see that people consume more organic food now as a result of higher income, and this increases the national demand of meat products, which leads to a large inflow of live-stock feed to developing countries. However, in developed countries, organic food is not necessarily associated with high income populations, but rather with people with diversified diets who wish to eat naturally developed food.
Economist Milton Friedman once said, "responsibility... generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom". Business ethics reflect the fundamental purposes of a company and are extremely important for multinational corporations, especially when trying to expand their brands into new countries and cultures. As globalization further expands, multinational corporations find that business integrity is perceived differently in different countries and often poses a challenge for business expansion.
The evolution of technology has opened the Internet for cross-border collaboration and has enabled a whole new range of economic activity that includes online trades, big data, and online advertising. According to the McKinsey Global Institute, from 2004-2009, the Internet contributed up to 21 percent in GDP growth in the developed world and 11 percent in the BRIC countries (Brazil, Russia, India, China). This blog will discuss the international trade benefits created by the Internet and the risks associated with online cross-border trade.
Mitigating climate change and the shortage of natural resources require rapid and widespread development of renewable energy. As the demand for renewable energy has increased largely in the past 10 years, the number of renewable energy trade disputes is also rising. A number of countries have found that their feed-in-tariff (FIT) programs are at odds with the fair trade agreements in the international trade of renewable energy. Therefore, this post will introduce the impacts of trade barriers on the international trade of renewable energy.
Russia has spent more than $45 billion hosting the most expensive Winter Olympics in history with the hope of boosting its economy. People are beginning to doubt if this larger expenditure is really worth it. Although people have already seen the Russian ruble appreciate in value, they are still unsure if the Olympics will take Russia out of the time when the economic growth slowed down to only 1.3 percent last year. This article will analyze the economic data of several countries after hosting major international sporting events so you are able to predict how Russia’s economy will perform after the Winter Olympics.
People’s attention shifted to the U.S. stock market again when stock prices dropped by 10 percent and hit a record low since October 2011. Although the recent ease-money government policies played a role in the price drop, the main reason for the decline was the global growth slowdown.
Advertising strategies have greatly changed in the past 10 years as globalization spreads to every corner of the world. Companies with high local prestige now attach large importance on expanding their overseas markets with the hope of receiving great returns. Problems often arise in advertising when cultural differences are disregarded. Often culture is overlooked as simply expanding the brand name in foreign markets becomes the major obsession of the manager. This blog will briefly discuss major issues associated with international advertising and will also provide possible solutions.
Singapore opened its first “green” factory two months ago setting up a milestone for Singapore’s green industry. The news brought great attention to a broader area—Asia, and people soon realized that most manufacturers in Asia have begun to turn “green” in recent years. This is becoming a trend in Asia that cannot be held back.
As the rupiah reached a five-year low on Dec. 23, 2013, the Indonesian government began to worry about the nation’s economy. It soon announced increased levels of foreign investment in the country's power plants, advertising, and pharmaceutical industries in order to boost the slowing economy. However, some people are concerned that this move will bring many challenges to the nation .
With one third of the world’s poor population located in India, the emerging country of India has been striving to help its people achieve a better standard of living. Thanks to the programs that are provided by the government to alleviate poverty, India’s economy has grown steadily over the years. When the government noticed that the world’s most extreme poverty rates fall in rural Orissa and Bihar, it began to focus on farm subsidy programs, with hopes of lifting the economic level of these rural regions. However, its farm subsidies are challenging the World Trade Organization's (WTO) ability to keep an important international trade deal on table.
In terms of art, China is certainly in a buying mode. Meg Maggio, an American gallery owner with 20 years of experience in China, found that western firms are pouring into the Chinese art market nowadays. This year, China has officially surpassed the United States in becoming the world’s profitable art and auction market. The Chinese art market posted auction revenues of $8.9 billion in 2013. However, freedoms of foreign firms in the industry are strictly limited by Chinese authorities and competition has increased between local and foreign firms. This post will address the challenges that foreign auction houses are facing in the Chinese art and auction market.
Over the last 30 years, Russia has been the only gas supplier to the Baltic countries of Estonia, Latvia, and Lithuania. As the gas price and demand has dramatically increased in the Baltic States, the European Union (EU) is has made plans to subsidize a regional liquid natural gas (LNG) terminal in the Baltic States. These plans are designed to decrease the Baltic countries' energy dependence on Russia and to meet the continually increasing gas demand. However, two issues aroused along with the project: where to build the LNG terminal and how to ease the relationship with Russia.
Businessmen go to Africa with hopes of profitable investment opportunities, but often they forget the level of diversity present among African countries. “You can’t treat Africa as one single market. So choosing where to play and where you will get the best return is the critical question,” said Michael Wood, the co-founder and director of consulting firm Aperio.
Many companies target the continent’s biggest economies, such as Nigeria, South Africa and Kenya; because they think these markets have mature economic structures. However, Wood suggests that companies new to the African market should first enter a smaller country. A small market usually provides investors with a lower risk of failure, less competition, and more approachable customers.
The trend toward globalization is rising and as globalization's popularity grows worldwide, companies are inclined to develop globally. Therefore, cross-border mergers and acquisitions (M&A) are becoming more fashionable these days as they offer increased opportunities and cheaper alternatives to building companies internally. However, a great majority believe that cross-border M&A is complicated and contains many variables that can lead to business failures.
Starting in 2008, the financial crisis affected most of the countries in the world. Recently, a light of global economic recovery was shed on many of these countries. However, a new challenge aroused in the Asian currency price market. In India, people hope that the government can change a record-low currency trading situation, accelerating inflation. Furthermore, they hope India’s economy can find its way back to the normal path.
For decades, free trade has received major support in the increasingly globalized market. of today. To account for the economic effects of free trade, Foreign Direct Investment (FDI) has caught the attention of economists and has become one of the most important components of measuring the economy. Since the Great Recession in 2008, most countries, especially the United States, have been experiencing a huge decline in FDI. However, in certain parts of America, we may see a much needed comeback of foreign investments in the next two years.
Worrying about the United States expansionary ambitions in the mid-1800s, Mexico prohibited foreign ownership of land within 50 kilometers (31 miles) of the coast or 100 kilometers of an international border. This policy was pretty efficient for protecting the homeland but it did block some foreign investments throughout history. As the financial crisis spread all over the world, Cancun realized it needs help from foreign investors and this help was going to break the law. Some real-estate developers believe the move could boost the nation's vacation-home market, while others think it would be hard on the locals acquiring their own estates.
England, the third largest economy entity in the euro zone, is facing difficulties on its way to economic recovery and is seeking help from a Canadian governor. Taking the term from Sir Mervyn King, Mark Carney became the new governor of the Bank of England (BE) with hopes of bringing a breath of fresh air to the British economy. Before entering Carney’s time in charge, let’s take a glance at the British economy and predict the future trends under Carney’s lead.
International Energy Agency (IEA) reported on Tuesday that the shale oil recently found in the United States will help meet most of the world's oil demand in the next five years. It is significant to the world market as well as to the U.S. itself because it eliminates the threat of future energy shortage and reshapes the U.S energy market and its relationship with other countries.
While the unemployment rate of Spain and Greece roaring extremely high these days and economies in the European Union rest down in the trough, good news has finally arrived from the Office of National Statistics. Recent statistics showed that the United Kingdom's economy grew 0.3% during the first quarter of 2013, which relieves the fear of the British economy falling into a triple-dip recession. Is this a sign that United Kingdom is getting itself out of the European Financial Crisis?
As China becomes the world’s second-largest economy behind the United States, more investors are becoming interested in its stock market to seek profits. However, things are not that easy in the stock market, China’s stock market has just experienced a deep dive recently due to government intervention in the property market.
While Cyprus is experiencing economic woes and Turkey is finding its way out of a huge European debt crisis, the energy relationship between Cyprus and Turkey regarding gas and oil is causing stress for both countries. On Wednesday, Turkey announced the suspension of energy projects with Italian giant ENI because the company expanded the exploration for oil and gas to Cyprus. ENI’s decision on the project expansion in Cyprus has created hope of economic recovery Cyprus but it infuriated Turkey since the project would cut down the energy plan in Turkey.
In 2010, Emirates ordered 32 new A380 macrojets from Airbus, which opened the door for the airline market in India. Shortly after this, Airbus announced Monday that it had a received an order for $24 billion worth of new single-aisle jets from the Indonesian budget airline Lion Air. While the world is expecting growth of the airline industry in developing countries, the global air traffic industry is actually shrinking. Let’s examine the global air traffic industry and analyze the various factors affecting the business environment of the industry.
United Kingdom, the financial center in Europe, has always been an attractive investment place. Because large amount of foreign buyers rushed into London’s real-estate industry, it has produced highest profits in the United Kingdom since 2011. It seems like British home sellers are never satisfied by the status quo as they raised asking prices to their highest levels in five years this month. However, the increasing price on the real-estate property did not stop foreigners from buying British homes. Instead, they invested more since they foresaw the huge potential of growing profits in the British real-estate industry.
While "made in China" products become wide-spread in the U.S and China-U.S trade continues to grow, the trade between the European Union (EU) and the U.S is actually the driving force behind world trade figures. Indeed, the EU-U.S trade is the largest trade in the world and comprises one-third of all trade, determining the shape of the global economy. Now, the debt crisis in Europe and the desire for American growth are pushing both sides to consider knocking down the barriers to trade. A trans-Atlantic trade talk is underway.
“Export or Die”, a phrase that Americans and other countries seem to neglect, has become an emergent dilemma in Japan. An annual trade balance report released last Thursday triggered a sense of crisis in Japan by displaying a huge trade deficit. This is the second straight year that exports have been in the red for Japan. As an export-reliant country, Japan is going to be hit hard by this news without doubt.
While the majority of European countries are experiencing the “nightmare” debt crisis, Germany is actually in an optimistic mood and is pleasant about its extraordinary trade surplus. Although Germany was hit hard initially by the global financial crisis, its exports helped the country's economy recover the by dropping unemployment to 3 million in 2012, the lowest level seen in 20 years. Its fast economy rebound left the rest of the European world in envy, and therefore triggered an argument on its role in the European Union (EU).