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Peter Lewis: Asia Business Correspondent on the impact of the trade war on China · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks. It'd be
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• 0:16
  Speaker 1: Here the Duper Clan.
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  Speaker 2: Peter Lewis Asia Business Correspondents with Us. Hello Peter, Hello Heather. Peter.
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  Speaker 2: Now I'm looking at all of this data that's coming
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  Speaker 2: out of China and it just looks like a raft
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  Speaker 2: of bad news. Is there anything good in there?
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  Speaker 3: Well, it is a lot of data, and it's important
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  Speaker 3: data as well, because it's for April, and you'll remember
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  Speaker 3: back on the second of April, that's when Donald Trump
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  Speaker 3: declared Liberation Day and that announced all these reciprocal tariffs
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  Speaker 3: which went at one stage on China as high as
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  Speaker 3: one hundred and forty five percent before they were withdrawn
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  Speaker 3: back down to about thirty percent. So the data gives
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  Speaker 3: us an idea of what what's happening a couple of things.
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  Speaker 3: First of all, the impact of tariffs hasn't been as
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  Speaker 3: bad as initially feared. And an industrial production which is
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  Speaker 3: a measure of manufacturing factory output did better than what
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  Speaker 3: put people some thoughts. Manufacturing was up about six point
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  Speaker 3: six percent year on year, not a bad number. Slowing
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  Speaker 3: still in the collapsed. Exports have collapsed to the US
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  Speaker 3: in that data, but what has happened is it's sort
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  Speaker 3: of been offset by exports elsewhere, in particular Southeast Asia,
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  Speaker 3: some of the emerging markets, the Middle East. So what
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  Speaker 3: we're seeing is that although shipping, shipments and exports to
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  Speaker 3: the US are definitely slowing as you would expect with
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  Speaker 3: those high tariffs, there are new markets that China is
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  Speaker 3: finding to help offset that. And it just shows that
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  Speaker 3: really President Eujenping's strategy is probably the right one, which
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  Speaker 3: is basically working on a new global trading system that
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  Speaker 3: just doesn't involve the US. If the US doesn't want
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  Speaker 3: to trade with China fair enough, we'll go and trade
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  Speaker 3: elsewhere and build up an alternative trading system.
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  Speaker 2: How much appetite do you think there is amongst other
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  Speaker 2: trading countries like ourselves, like Australia blah blah blah, to
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  Speaker 2: actually lock in with she on that.
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  Speaker 3: I think there is some. I think have to be
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  Speaker 3: careful about how far that will go because countries like Australia,
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  Speaker 3: New Zealand, Japan, South Korea and not natural political allies
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  Speaker 3: of China. But at the same time that there are
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  Speaker 3: big power in the Asian Economic Zone in the global zone,
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  Speaker 3: and therefore these countries do want to trade with them
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  Speaker 3: and do need to trade with China if it can,
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  Speaker 3: but it would also like to trade with the US
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  Speaker 3: as well, which is more of a natural political ally
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  Speaker 3: for those countries. So they try to tread a careful
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  Speaker 3: line between appeasing both and not upsetting either. And perhaps
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  Speaker 3: the master of doing that of being able to trade
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  Speaker 3: with everyone is India. Uendo Modi has built up a
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  Speaker 3: you know, the sort of the handbook of how to
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  Speaker 3: do this and how to sort of get trade deals
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  Speaker 3: done with almost everyone.
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  Speaker 2: That it's a fair point. Listen, I see she has
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  Speaker 2: been stepping up this call for industrial self sufficiency. Is
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  Speaker 2: this falling on deafys or is it actually working well?
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  Speaker 3: It's working to a certain extent. There are things that
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  Speaker 3: China can do to protect itself from these tarots and
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  Speaker 3: also not just twists, but from the blacklists that America
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  Speaker 3: has put in Chinese companies. On companies like Huawei, for example,
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  Speaker 3: they're not allowed to export their chips to the US.
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  Speaker 3: Navidia is not allowed to sell its chips into China.
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  Speaker 3: So there are certain things that China is good at,
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  Speaker 3: so it needs to catch up on semiconductors. It's nowhere
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  Speaker 3: near as advanced as the US, but it is catching up.
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  Speaker 3: It's taken the lead in certain areas. The electric vehicles
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  Speaker 3: stands out really. They are the world leader now in
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  Speaker 3: electric cars and they've stolen a big march. We just
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  Speaker 3: saw in the data yesterday that BYD now sells more
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  Speaker 3: cars electric vehicles into Europe than Tesla does, so they
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  Speaker 3: are really doing very well. Green energy is another area
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  Speaker 3: where China is doing good at but there are still
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  Speaker 3: plenty of areas where it needs to sort of catch
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  Speaker 3: up and it needs to modernize and it needs to
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  Speaker 3: become self sufficient. But it's certainly making the right steps
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  Speaker 3: and doing the right things to try and get there.
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  Speaker 2: Fascinating stuff. Peter, thanks very much, look after yourself. We'll
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  Speaker 2: talk to you in a week. That's Peter Lewis, our
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  Speaker 2: Asia Business correspondent.
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