But compare the Port of Los Angeles container movement statistics, which are published monthly.[1] Those are actual counts. They're going up, not dropping. The cost of transport is dropping because China's subsidized shipbuilders built far more ships than are needed.
(The discouraging thing to see there is that about half the containers coming in from Asia to the US go back empty.)
>(The discouraging thing to see there is that about half the containers coming in from Asia to the US go back empty.)
Depends on how you look at it. The US is only sending pieces of paper (or electrons that represent pieces of paper) and getting back containers full of goods.
I wish I could read an economic analysis of a container of iPhones landing at the port of Los Angeles. This is recorded as trade imbalance but somehow I feel Apple and US customers are getting the full benefit of low cost Chinese labor.
>I wish I could read an economic analysis of a container of iPhones landing at the port of Los Angeles. This is recorded as trade imbalance but somehow I feel Apple and US customers are getting the full benefit of low cost Chinese labor.
It doesn't seem like Chinese labor plays that big of a role regardless, seeing as labor costs on a $800 device are around $2.
Apple and their shareholders certainly benefit from selling $800 devices at 70% profit margins, but I would not go so far as to say that consumers also get the benefit, seeing as they are paying 70% markups.
The funny thing is, the only way to determine whether that's true or not is to add up all the pieces of paper going in either direction. And it's not until that happens that you know who's exploiting who and who's getting exploited.
They clearly do a lot of air freight for products in high demand (I've had plenty of iStuff that included tracking information starting in Shenzhen or Shanghai), but I'd have expected them to switch over to ships to stock their stores once production ramps up and demand ramps down. Do you have more info on this?
- it makes a lot more sense to ship by Air for product with such value per kg
- Apple has been shipping products by Air since 1997(famously they booked the entire capacity for the holiday season)
- Apple brags about how little inventory they keep all the time. Sea Freight is slow, very slow.
China is very protective of its market, especially services. They have their own stuff - Baidu instead of Google, Alibaba instead of ebay/Amazon, etc.
Most foreign companies are forced to pair up with local Chinese companies. The transfer of IP is "included in the price of access to the market", to put it mildly.
There are significant limitations when it comes to foreign participation in Chinese stock markets.
Also, China now runs 4 of the world's 5 biggest banks.
That article notes that Chinese and American banks count assets differently, and that JPMC "may" be the largest in a "true apples to apples comparison".
Yes, but not in the way you meant. Much of the outgoing US container traffic is recycling, mostly paper and steel. Container shipping to US to China is very cheap, since there are so many empties going back.
Sort of ridiculous that economists can't agree on whether this is a good thing or not for the economy of the country consuming the most in the world yet not contributing the same back.
Who told you economists can't agree? See this IGM economists poll (note that 'uncertains' largely pertain to specific exceptions or arguing that focus on trade balances doesn't make sense in the first place)
You're not reading closely, unless your claim is that disagreement between "disagree" and "strongly disagree" is meaningful. Only 5% of respondents agreed that export-increasing policies are inherently worthwhile, and in those cases (as well as most of the 23% uncertains who left comments), the given explanation was almost universally for small, emerging economies. There is no real disagreement that lowering the US trade deficit for its own sake is misguided.
I mean, the issue with Chinese shipping capacity is definitely covered in the article. The BDI result being discussed is about a sharp and protracted drop that's not aligned with China's production.
So the question: how do we reconcile these two things? Chinese capacity doesn't explain the drop, but BDI doesn't match the core "containers shipped" data you cite. Is Los Angeles' shipping somehow exceptional? Or is something else going on?
In the 2008 crisis, the Baltic Dry Index was a publicly visible indicator of a semi-hidden crisis: Letters of credit stopped abruptly, therefore so did bulk shipping. Watching BDI as some kind of general purpose crystal ball will surely be uninformative.
This seems unlikely. I ordered a new Volkswagen back in July of last year, and was tracking ship traffic. By following the logistics company they use, you could see new batches of VWs departing Emden Germany for ports in Canada and the US (Halifax, Dover, Jacksonville, Houston, Port Hueneme via the Panama Canal) almost constantly. I'd say a new ship left every 5-7 days, which meant that at any given point in time, it was almost certain that a ship from Europe was in the Atlantic on its way to North America carrying VWs. I'm sure VWs represent a very small percentage of the trade from Europe to North America.
I think it's difficult to come up with hard numbers, but these things are all indicative of very broad, high level trends. Countries are turning inwards, global cohesion is weakening.
You have a loud demagogue in the US arguing for building walls around the country. You have the UK voting for a divorce from the EU; and you have right-wing extremists in the EU applauding that decision (Marine Le Pen, etc). You have a totalitarian figure like Putin dominating the East for a long time. And fundamental indicators like the BDI seem to show a decrease in global exchange.
If not the whole world, then at least the West broadly speaking (North America, EU and Russia) is like that person who is gradually slipping into a nasty depression without noticing it, slowly becoming introverted and fearful.
A sign of health in this situation would not be further isolation and saber rattling, but a turn outwards, and increased cooperation, and a frank discussion about what's really going on. This holds true for persons as well as for countries.
The history of the name is in the Article...
Known then as the Virginia and Baltick, to reflect the most valuable trade concessions—tobacco from Virginia; fur and tallow from the Baltics
to me it would far more insightfil to note a drop, then postulate as to why. The current situation is "welp its flat" - duh, thats been the news all 2016. Markets are nervous and everyine is waiting for a swing one way or the other and obviously a positive signak woild have to be much larger as people are risk averse.
baltic dry has never been anything but an "oh wow" index for marketers/salespeople to get said reaction from clients and hopefully get them to transact. It has that beautiful combination of seemingly being a leading indicator, and being left-field enough to make the originator seem clever.
It has a very low correlation to any actual markets. People on trading floors have been pushing this baltic dry pitch for at least 10 years. It's very old news for anybody in markets and is more of an eye-roller than anything else. That the New Yorker has now latched on shows that they hope to get a bit of oh-wow out of it too. Snake oil.
Baltic Dry is fun to watch, but there is too much micro going on in it for it to have any macro significance that is not coincidental.
(The discouraging thing to see there is that about half the containers coming in from Asia to the US go back empty.)
[1] https://www.portoflosangeles.org/maritime/stats.asp