Productivity & Trade Briefs

The Conference Board China Center has been tracking US-China trade relations very carefully over the past 18 months, and we recommend that our members review several key pieces that we sent out previously which anticipated the events now transpiring and outlined a range of important planning assumptions for MNCs.

Market shake-outs – as typical of creative destruction cycles, even those with “Chinese characteristics” – should yield better operating conditions over the longer-term, especially for competitive firms. At this critical juncture, executives need to understand the gamut of potential China exposures facing their companies – both positive and negative – so that they can position their companies to exploit associated opportunities and mitigate risks.

The reform and empowerment of the Committee on Foreign Investment in the United States (CFIUS) has the potential to dramatically disrupt many traditional partnership approaches MNCs have been using in China for many years – including co-investment arrangements that have become popular recently.

Intangible assets are especially important for China. Its remarkable rapid growth over the past three decades has enormously enlarged China’s manufacturing relative to that of the US, but in terms of labor productivity China appears to still be far away from American levels.

Too many retailers are shutting down: 2019 just hit its halfway point, but already the number of planned retail store closings has exceeded the total for all of 2018.

Apple supplier Foxconn’s initiative to produce high-end iPhones in India opens new doors for Apple to use India as an export hub, including to the U.S., and also gives Apple better access to one of the world’s fastest-growing economies—and mobile phone markets. Indian consumers have felt very optimistic economically, and technology is a popular category for spending disposable income, as data from the Conference Board Global Consumer Confidence Index shows.

Companies need to build a mechanism to gauge consumers’ preferences for causes and integrate that with a measurement framework across all stakeholders of an organization. Sumair Sayani, vice president at Nielsen and Consumer Dynamics co-Center leader, suggests what this model might look like.