It’s been a week full of US-China news. The Trump administration announced that the further round of tariffs on Chinese imports into the United States would be delayed for a few months, with Trump saying he wanted to give US consumers a Christmas break. Whether tariffs are indeed the best way to address the imbalances and disconnects between the Chinese economy and the international economy, at the heart of which still is the US economy, is an open question. It makes a point, but this week Wall Street and the WTO indicated they are not in favor. Both the US and Shanghai stock markets did a roller coaster performance on the back of the tariff news, and the WTO ruled against the US tariffs on Chinese imports. Beijing announced immediately that it would take appropriate actions in retaliation.
A bunch of indicators were released for July, indicating a continued slowdown in the overall Chinese economy. On the other hand, Alibaba announced a 42% rise in revenues for the first half of the year, based on a continued surge in online shipping. It’s great news for Jack and his shareholders, but it’s worth considering that this comes at a time when the economy is obviously slowing. Which has to mean that other businesses are suffering as a direct result of the Alibaba surge, with implications for small businesses and employment. Diversity, we would argue, is better in almost all contexts, particularly in terms of retail. But so goes the world these days.
Have a good weekend.