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India: All Growth, No Jobs · Trumponomics

0:04
Speaker 1: Hello, and welcome to Stephanomics, the podcast that brings the
0:06
Speaker 1: global economy to you. The Indian economy has grown by
0:15
Speaker 1: at least six or seven percent in nearly every one
0:18
Speaker 1: of the past twenty years. That's almost double the growth
0:21
Speaker 1: rate it achieved in its first fifty years as an
0:24
Speaker 1: independent state. But somehow that success isn't translating into jobs.
0:29
Speaker 1: In fact, less than half of the working population is
0:33
Speaker 1: working or even actively looking for work, and the vast
0:37
Speaker 1: majority of Indian women are out of the workforce altogether.
0:41
Speaker 1: So what's going wrong and how important will it be
0:43
Speaker 1: for the newly elected Prime Minister nor Indo Moody to
0:46
Speaker 1: fix it? While a few minutes I'll talk about it
0:49
Speaker 1: with Bloomberg columnist and writer Mihir Shama. I'll also have
0:53
Speaker 1: some brand new research on exactly how the US China
0:56
Speaker 1: trade wars and tariffs are destroying economic activity the US,
1:00
Speaker 1: China and other countries. But first, here's my colleague Aniban
1:04
Speaker 1: Nag who took a closer look at India's job shortage
1:07
Speaker 1: with fellow reporter Fristie p Anywell. That is the busy Promhabib,
1:23
Speaker 1: the station here in central Mumbai with thousands of commuters
1:26
Speaker 1: mill in and out during the morning rush hour. The
1:36
Speaker 1: Indian railways are famous as one of the biggest employers
1:40
Speaker 1: in the world, and this particular station is being manned
1:44
Speaker 1: by a station master, booking clerks and a few sweepers.
1:49
Speaker 1: These jobs don't pay much, but a staggering twenty eight
1:53
Speaker 1: million implied to do one of them recently, and the
1:56
Speaker 1: department that runs the railways announced agnes. One of those
2:02
Speaker 1: who try to get a railway job was sish Kumar.
2:08
Speaker 1: I wanted to stick to a job with computers, but
2:10
Speaker 1: it's so difficult to land a job. If someone knows you,
2:13
Speaker 1: then you get a job. Otherwise it's next to impossible.
2:19
Speaker 1: About We met Sorresh there his one room, rented a
2:24
Speaker 1: house that is a stone's throw away from an open
2:28
Speaker 1: drain and part of one of the most densely populated
2:31
Speaker 1: colonies of Delhi. He's medium built and dressed up for
2:35
Speaker 1: work in a formal cotton shirt and trousers. It's morning,
2:41
Speaker 1: but he's already starting to sweat in the Indian summer,
2:44
Speaker 1: where temperatures can soar past hundred and ten. They raised
2:47
Speaker 1: farre and high. He's thirty years old and holds a
2:51
Speaker 1: diploma and computing from a private institute, but he's working
2:55
Speaker 1: as someone's driver, his wife as a maid. I was
2:59
Speaker 1: hoping for older than that when he moved here from
3:02
Speaker 1: India's central region of mad Depradation. But he recognizes he's
3:06
Speaker 1: one of the lucky ones back in the village. There's
3:10
Speaker 1: so much poverty. We can't even open our own business
3:13
Speaker 1: and there are no banks to offer support with loans.
3:16
Speaker 1: In Delhi, at least you can get a job. I
3:19
Speaker 1: am driving as I have a home to run and
3:21
Speaker 1: send kids to school. Sy Ha's a job, but he's
3:31
Speaker 1: under employed. India's economy is not getting the best out
3:35
Speaker 1: of him. Twelve million Indians entered the labor market each year,
3:40
Speaker 1: and an increasing number of them are under employed, lights
3:44
Speaker 1: race or not in work at all. It was like
3:52
Speaker 1: any week of December that we were told that they
3:55
Speaker 1: will be letting go of the staff and then from
3:58
Speaker 1: there try and if they can survive this stress, which
4:02
Speaker 1: also did not happen because in April almost everybody was
4:05
Speaker 1: asked to go. We found a woman we call Alia
4:10
Speaker 1: because she did not want us to use her real name.
4:14
Speaker 1: We met up in Bloomberg's office in New Delhi, where
4:17
Speaker 1: she lives. Aliyah, who's in her mid thirties, lost her
4:21
Speaker 1: job as a marketing and communications manager after her company's
4:25
Speaker 1: sales failed to gain traction, just as the country was
4:29
Speaker 1: put through a huge challenge of changing much of the
4:32
Speaker 1: currency in circulation. Did they tell you what was the
4:35
Speaker 1: reason for that? No, they just told that they were
4:39
Speaker 1: not able to kind of sustain the operations that they
4:42
Speaker 1: were having. Her mother isn't aware she has lost her job.
4:46
Speaker 1: Her father knows the truth and can sometimes get despondent
4:50
Speaker 1: about her job prospects. Aliyah says she has been able
4:55
Speaker 1: to get some work here and there. She has even
4:58
Speaker 1: managed to repay a Carlo, but it has been tough.
5:03
Speaker 1: I take up freelance projects from time to time, and
5:07
Speaker 1: I try to and obviously try to find, you know,
5:10
Speaker 1: anything that I can apply to. So what I mostly
5:14
Speaker 1: get as a response is that either there are too
5:16
Speaker 1: many aspirants buying for a singular job and so the
5:19
Speaker 1: competition is obviously increased. A part of it was also
5:23
Speaker 1: given to the fact that you know, I'm looking for
5:26
Speaker 1: a job role which is intermate management kind of position
5:29
Speaker 1: and order fresh level, and also the fact that you
5:34
Speaker 1: know the plans keep changing. A lot of positions that
5:38
Speaker 1: are that are actually they think are available go on
5:42
Speaker 1: hold for no reason. There's a lot of uncertainty in
5:46
Speaker 1: terms of organizations in terms of what they they're planning
5:49
Speaker 1: for the next six months to a New York time earlier.
5:52
Speaker 1: Part of the official jobless numbers, and that is probably
5:55
Speaker 1: the tip of the iceberg. The bigger problem is that
6:00
Speaker 1: half the working age population and of women are not
6:04
Speaker 1: even included in that official jobless total, but they're not
6:09
Speaker 1: looking for work at all. India is not the only
6:14
Speaker 1: developing country struggling to bring women into the workforce. What
6:19
Speaker 1: is troubling is that the situation has been getting worse
6:23
Speaker 1: even as the overall economy has been doing quite well.
6:27
Speaker 1: According to the World Bank, nearly twenty million women, a
6:31
Speaker 1: number roughly equivalent to the population of Sri Lanka, dropped
6:35
Speaker 1: out of the workforce between two thousand and five and
6:38
Speaker 1: two thousand and twelve. Economists tell us that this is
6:43
Speaker 1: an enormous missed opportunity, but don't take their vote for it.
6:48
Speaker 1: Ask Christine Lagard, the head of the International Monetary Fund,
6:53
Speaker 1: you can increase US t DP by five because you
6:57
Speaker 1: can increase Indian GDP by twenty seven and decent. If
7:01
Speaker 1: you look at diversification, we have now documented evidence of
7:04
Speaker 1: the fact that when women participate in the economy and
7:08
Speaker 1: in the labor market as much as men do, you
7:10
Speaker 1: have a more diversified economy. And by bringing women to
7:16
Speaker 1: the to the labor markets, giving them access to finance,
7:19
Speaker 1: you reduce the inequality. What would that take in India?
7:24
Speaker 1: We asked some Toshirotra, a professor at New Dearle's Jawaharlal
7:28
Speaker 1: Nehru University. He's an export and employment and labor issues
7:33
Speaker 1: for girls. If you want to make sure that they
7:37
Speaker 1: get jobs, then we have to ensure that childcare. Affordable
7:45
Speaker 1: childcare is much more easily available. UM, public transport is
7:52
Speaker 1: much safer than it has been in the past. UM.
7:57
Speaker 1: And above all, of course, job growth, non agricultural job
8:02
Speaker 1: growth has to happen in construction, in manufacturing and in services.
8:08
Speaker 1: You wouldn't know there's a problem from the latest election results.
8:11
Speaker 1: Prime Minister in the Rain the Remote won the country's
8:14
Speaker 1: massive vote last month with an even larger majority than before,
8:19
Speaker 1: but he does recognize the issue. One of the first
8:22
Speaker 1: decisions after taking office for a second five year term
8:26
Speaker 1: was to form a committee of senior ministers to try
8:29
Speaker 1: and address rising on employment. Oh yeah, says it's hard
8:34
Speaker 1: time they deal with the issue because it's a lot
8:36
Speaker 1: bigger than the numbers indicate. Comar, the driver, blames India's
8:42
Speaker 1: education system for the lack of opportunities. Way was that
8:46
Speaker 1: that can't be there? Who made the English community? My
8:49
Speaker 1: English is weak in the villages. They don't teach much English.
8:52
Speaker 1: I started studying English only in the fifth grade and
8:55
Speaker 1: not the first. If I have to blame anyone, it
8:58
Speaker 1: is perhaps myself. So I think I should have more
9:01
Speaker 1: complications of degrees. It can really need to lay out
9:06
Speaker 1: the lack of suitable opportunities. So someone like Coomar risk
9:09
Speaker 1: astonishing the country's image as a major investment destination. Not
9:15
Speaker 1: only that there's a chance of social unrest. Above all,
9:20
Speaker 1: it poses a challenge to policy makers who are keen
9:23
Speaker 1: to read the demographic dividend of a young population, which
9:27
Speaker 1: means it can be a major drive of economic growth.
9:32
Speaker 1: The time is ticking, though, by the share of India's
9:37
Speaker 1: population to that of working age will start declining. India
9:42
Speaker 1: will have to act fast if it has to harness
9:44
Speaker 1: that demographic dividend. By providing jobs to millions sooner rather
9:49
Speaker 1: than later. Kumar thinks it's already too late for him,
9:54
Speaker 1: but he's still holding out hope for the next generation.
9:58
Speaker 1: A year, I have given up hopes of getting a
10:02
Speaker 1: better job. I will get along with whenever it takes.
10:05
Speaker 1: The kids should have better prospects. So I'm very happy
10:20
Speaker 1: now that I can speak to one of Bloomberg's key
10:24
Speaker 1: India columnists, Mihir Shama, about what this means for in
10:29
Speaker 1: his economy and what Prime Mr Modi might be able
10:32
Speaker 1: to do about it going forward, having just been re
10:35
Speaker 1: elected last month. Here, I guess one question people might
10:39
Speaker 1: be asking. I started the program mentioning that India was
10:43
Speaker 1: an economy that had grown six or seven percent a year,
10:46
Speaker 1: pretty much every year for the last twenty years. How
10:48
Speaker 1: has it done so well while not finding jobs for
10:52
Speaker 1: maybe half of its working age population. I think that
10:57
Speaker 1: the real joblessness is a relatively recent phenol. The real
11:00
Speaker 1: jobless growth is a relatively recent phenomenon. Um Up to
11:04
Speaker 1: around twenty eleven, I think jobs were getting created. A
11:09
Speaker 1: lot of those were in, for example, the construction sector,
11:12
Speaker 1: which has traditionally managed to soak up large numbers of
11:15
Speaker 1: relatively underskilled people, particularly from rural areas, in a rapidly
11:21
Speaker 1: expanding urban economy. Around twenty eleven or twenty twelve, the
11:25
Speaker 1: economy begins to slow. You know, you have the crisis,
11:29
Speaker 1: then you have the post crisis stimulus, and then when
11:31
Speaker 1: the stimulus over reaches in around twenty twelve, the economy slows.
11:35
Speaker 1: Investment slows for some reason. Um that slowing is reflected
11:40
Speaker 1: in the job growth numbers are both official and unofficial,
11:45
Speaker 1: but is not showing up as much as one would
11:47
Speaker 1: expect in the new GDP statistics, which has led many people,
11:51
Speaker 1: as as it happens, to start questioning India's growth figgers themselves.
11:56
Speaker 1: But the truth is that from after liberalized fastion, the
12:02
Speaker 1: first ten, fifteen, even twenty years were pretty good for jobs,
12:09
Speaker 1: not as great as they could have been, but not bad.
12:12
Speaker 1: It's really in the past father, nor though year, that
12:15
Speaker 1: we've begun to see something of a crisis. And if
12:18
Speaker 1: you look at the structure of growth, I mean, is
12:20
Speaker 1: it is it to do with the composition of growth
12:23
Speaker 1: that you're not getting the jobs. Like our our economist
12:27
Speaker 1: at Bloomberger, Abishek Gupta, has looked at how in a
12:30
Speaker 1: sense the whole is not necessarily in the manufacturing silence
12:32
Speaker 1: in service sector, and the inability to inability to unleash
12:35
Speaker 1: the service sector is that a big part of it.
12:39
Speaker 1: No country in history has been able to um incorporate
12:44
Speaker 1: unskilled people from the rural economy into a growing middle
12:49
Speaker 1: class with secure jobs without building a manufacturing sector. It
12:55
Speaker 1: is possible, surely, perhaps to do it without but unless
12:59
Speaker 1: you've got oil or something, you can't. There's no there's
13:02
Speaker 1: no roadmap. It's never been done before. India has been
13:06
Speaker 1: d industrializing since the late nineties, which means that the
13:11
Speaker 1: contribution of industry to GDP peaked in around nine ninety
13:14
Speaker 1: seven and since then it has been going down. That's
13:17
Speaker 1: not okay because what that gets replaced with is, of
13:22
Speaker 1: course an increase in the proportion of the service sector
13:26
Speaker 1: in g d P. And the service sector is not
13:29
Speaker 1: you know, we're not talking high level it stuff here,
13:34
Speaker 1: all right. That maybe the image of India, But what
13:36
Speaker 1: the service sector actually is is very very small enterprises
13:41
Speaker 1: one person, two persons, three people working together. In the
13:45
Speaker 1: Prime Minister's words, even a guy frying up dumplings is
13:49
Speaker 1: also a job, right, But those aren't the kind of jobs.
13:53
Speaker 1: I think that people think about when they want them,
13:55
Speaker 1: and those aren't the kind of jobs that create a
13:57
Speaker 1: sustainable middle class. There is really no on for even
14:00
Speaker 1: right now after what could repleeve math manufacturing export oriented
14:06
Speaker 1: math manufacturing as the creator of job So I know
14:10
Speaker 1: you like giving primers demodi advice which he doesn't follow.
14:14
Speaker 1: We shouldn't necessarily stop now if you're just been reelected
14:20
Speaker 1: and have some pressure on you, maybe surprisingly not as
14:24
Speaker 1: much pressure as you might think. I think if less
14:26
Speaker 1: than half of the working age population in the UK
14:28
Speaker 1: or the US we're in work, there would be that
14:30
Speaker 1: would be the only issue on the horizon. I see
14:33
Speaker 1: that that's not really the case in India. But if
14:35
Speaker 1: you're under pressure to deliver m after this election victory,
14:41
Speaker 1: what leavers can he pull? I mean, what would be
14:44
Speaker 1: the key reformer is that you would think of to
14:47
Speaker 1: try and change how much jobs are being created. I
14:51
Speaker 1: think there are three things that you need to do
14:53
Speaker 1: almost immediately because time is running out for all of them.
14:57
Speaker 1: The first is to obstantively change what are called factor markets,
15:02
Speaker 1: so the markets for land and labor in particular. UM,
15:07
Speaker 1: it's very difficult to fire people in India which is
15:10
Speaker 1: why very few people hire them. We have incredibly small
15:14
Speaker 1: textile production facilities, like our textile factories are you know,
15:18
Speaker 1: maybe an average of fifteen or sixteen people in India
15:22
Speaker 1: as opposed to over two to three in just in
15:25
Speaker 1: Bangladesh next door. And so we're uncompetitive when it comes
15:28
Speaker 1: to producing textiles, which is a labor intensive sector. Um
15:33
Speaker 1: So you need to change the laws that constrain the
15:37
Speaker 1: sale of land, that constrain hiring and firing workers. That's
15:42
Speaker 1: point one. Point two is that you have to ensure
15:45
Speaker 1: that you get embedded into global supply chains. Currently, India is,
15:50
Speaker 1: like many other countries around the world, moving in a
15:53
Speaker 1: somewhat protectionist direction. We're putting up tariffs on you know,
15:57
Speaker 1: things like mobile phones and the idea areas to try
16:00
Speaker 1: and create a domestic electronics manufacturing sector, but obviously we
16:04
Speaker 1: know that's not going to happen because of the way
16:07
Speaker 1: that that manufacturing is now organized globally. Um So you
16:11
Speaker 1: have to embed yourself in these global supply chains rather
16:15
Speaker 1: than you know, extracting yourself from them. And the third
16:18
Speaker 1: and I think really the most important at this point
16:21
Speaker 1: is that you need to work on basic educational and skills.
16:26
Speaker 1: We have some of the worst schools in the world.
16:29
Speaker 1: According to many studies, there are kids in class eight
16:33
Speaker 1: in the you know, in their eights here of schooling
16:35
Speaker 1: in the eighth grade who cannot do maths at a
16:37
Speaker 1: second grade level, and that's the majority of So you
16:40
Speaker 1: need to intervene both of the primary level and with
16:43
Speaker 1: those who have already left school and are and are
16:45
Speaker 1: currently underskilled. So those interventions have to be massive and immediate,
16:49
Speaker 1: the educational ones. And you did mention we had at
16:52
Speaker 1: the end of that segment as well. This question is
16:56
Speaker 1: the time pressure. Um. You know, you might think India
16:59
Speaker 1: had all the time in the world given the scale
17:01
Speaker 1: of its economy and a number of people, but this
17:03
Speaker 1: key demographic point that you have a sweet spot as
17:07
Speaker 1: an economy where you have a sort of peak a
17:10
Speaker 1: number of working age people with fewer children, having fewer children,
17:15
Speaker 1: but no longer, not not getting older yet. How important
17:18
Speaker 1: is it for India to get this right before it
17:21
Speaker 1: starts seeing that demographic change and the aging that we've
17:24
Speaker 1: seen in that obviously in other countries. So one of
17:27
Speaker 1: the crucial questions in development of can a country get
17:31
Speaker 1: rich before it gets old? Right? And the truth is
17:35
Speaker 1: that we are a much younger country than a lot
17:39
Speaker 1: of others where our average age is still in the
17:41
Speaker 1: twenties where within China, Japan, But that obviously won't last forever.
17:48
Speaker 1: As birth rates begin to fall going forward, our average
17:52
Speaker 1: age will increase, which means that the proportion of people
17:55
Speaker 1: in the working age population as opposed to those out
17:58
Speaker 1: of it, will begin to Right now, we are seeing
18:01
Speaker 1: a lot of growth and a lot of dynamism precisely
18:04
Speaker 1: because that working age population is increasing in composition, in size,
18:10
Speaker 1: in proportion. That will not be the case going forward.
18:15
Speaker 1: And the bad news is it is already the case
18:17
Speaker 1: that we are facing demographic demographic pressure in some of
18:21
Speaker 1: the more advanced and developed parts of India. States along
18:24
Speaker 1: the coast in the south of India, which have higher
18:27
Speaker 1: human capital levels, which are more integrated with the global
18:30
Speaker 1: economy um which have better skills, those areas are in
18:35
Speaker 1: fact already beginning to see this demographic change. They're getting older.
18:41
Speaker 1: Where population growth is really coming from, where we have
18:43
Speaker 1: our current youth bulge, all these working age population, working
18:47
Speaker 1: age people applying for these jobs in the railways and
18:49
Speaker 1: so on and so forth. That's in the north, in
18:52
Speaker 1: the interior, and that's not that's not a part of
18:55
Speaker 1: the country that is properly connected to the global economy.
18:58
Speaker 1: It's not connected to markets. These are people who are underskilled.
19:01
Speaker 1: So there is this a regional disparity in how things
19:06
Speaker 1: are turning out that evolved a problem. Some people listening
19:10
Speaker 1: may have the same experience that I have that the
19:11
Speaker 1: the Indian business people that one sees at conferences or
19:17
Speaker 1: interviewed often on Bloomberg or in anywhere else, you get
19:20
Speaker 1: the sense of an incredibly dynamic economy really digitally switched
19:25
Speaker 1: on developing things that actually are ahead in many cases
19:29
Speaker 1: of advanced economies on the digital front um, and even
19:34
Speaker 1: on applying it to some public sector challenges. Is that
19:39
Speaker 1: just are we seeing just a tiny fraction, Because if
19:41
Speaker 1: you listen to those people, you would think, wow, India
19:43
Speaker 1: is going to be able to ride the wave of
19:45
Speaker 1: all these technological changes that are happening around the world
19:47
Speaker 1: that everyone fears India is going to clean up as
19:51
Speaker 1: a result of those changes. Well, I mean there are
19:54
Speaker 1: two things to be said there. The first is one
19:57
Speaker 1: should never trust what people in Indian business see, only
20:00
Speaker 1: what they do and when they start investing in India,
20:05
Speaker 1: then I will take their claims that India India has
20:08
Speaker 1: a bright future. Seriously, we have a crisis and private
20:11
Speaker 1: investment has been shrinking for for years as a proportional GDP,
20:15
Speaker 1: and that doesn't appear to have cleared up yet, so
20:18
Speaker 1: they don't appear to have confidence in where they're putting
20:21
Speaker 1: their money. So I don't believe anything they say about
20:25
Speaker 1: you know, when when they make all these sort of
20:27
Speaker 1: claims about India's future. The other thing about you know,
20:30
Speaker 1: can India righte the you know, automation digital wave of
20:33
Speaker 1: the future. Everybody else is worrying because they're losing jobs.
20:36
Speaker 1: I don't know. I suppose you can be more optimistic
20:38
Speaker 1: about it when you've never had the jobs in the
20:41
Speaker 1: first place. If you see the entire world moving towards
20:44
Speaker 1: an economy, you know, which is precarious when nobody has
20:47
Speaker 1: a real job where you have to work three things,
20:50
Speaker 1: and you know you have service sector jobs that don't
20:52
Speaker 1: pay enough. Well, we've lived that already. But the truth
20:55
Speaker 1: is that we are worth off because we need to
20:58
Speaker 1: at least have a phase of those manufacturing jobs in
21:01
Speaker 1: order to build the middle cloths that can then complain
21:04
Speaker 1: we've never built the middle cloth that can complain, so
21:06
Speaker 1: you're not hearing any completely well uh here, that's many
21:11
Speaker 1: people who read your college would say that's a characteristically
21:13
Speaker 1: blunt assessment of the situation for India's economy. But thanks
21:17
Speaker 1: very much for joining us. Thanks so Some people would
21:27
Speaker 1: say that we talk too much about trade wars on
21:30
Speaker 1: this podcast, but we have a lot to say about them,
21:33
Speaker 1: and this week is no exception because we have a
21:36
Speaker 1: really interesting analysis by our economists who are part of
21:40
Speaker 1: Bloomberg Economics, of the impact that trade wars are having already,
21:45
Speaker 1: particularly in China, but also on production levels and sales
21:49
Speaker 1: in the US. And I'm very glad that I can
21:52
Speaker 1: talk a bit with one of the people who crunched
21:54
Speaker 1: the numbers on this, one of our Eurozone economists, maybe
21:57
Speaker 1: a Kuza maybe. Thank you very much for joining us
22:00
Speaker 1: from Zurich, Hasty if any, thanks for inviting me. So
22:03
Speaker 1: tell me a little bit about this research, because what
22:05
Speaker 1: was interesting to me is that although often people have
22:08
Speaker 1: talked about the big picture potential impact of trade wars
22:12
Speaker 1: on global growth, you took a micro approach looking at
22:17
Speaker 1: the imports that have been affected by tariffs. What did
22:19
Speaker 1: you find so yes, we used very detailed data from
22:22
Speaker 1: the US International Trade Commission, and we looked at the
22:25
Speaker 1: different categories, the six thousand plus categories of products that
22:30
Speaker 1: have been imposed some tarifts by the US on US
22:34
Speaker 1: on imports from China. And what we've found first is
22:38
Speaker 1: that when you look at the value of imports from
22:41
Speaker 1: China across those categories which have been parift since Juday
22:45
Speaker 1: to September twenty eighteen Juday to September last year, if
22:49
Speaker 1: you look at the time series, you can see a
22:51
Speaker 1: sharp top which happens just after the introduction of the
22:54
Speaker 1: different waves of tariffs. And in total, if you look
22:58
Speaker 1: at the value of US imports from China across those
23:02
Speaker 1: categories in the first quarter of twenty nineteen, so after
23:05
Speaker 1: the introduction of all the tariffs of the first wave
23:07
Speaker 1: of tariffs, and you compare with what happened a year earlier,
23:11
Speaker 1: that is value on those goods is done by twenty
23:14
Speaker 1: six percent. That's fifteen point eight billion dollars worth of
23:19
Speaker 1: Chinese imports that have not entered the US across across
23:23
Speaker 1: those those products. What's interesting as well is that when
23:28
Speaker 1: we looked at what happened to imports of those products
23:31
Speaker 1: from the rest of the world. They have increased a
23:34
Speaker 1: little bit, but only by five point four billion dollars
23:37
Speaker 1: in the year to UH the first quarter of twenty nineteen.
23:41
Speaker 1: So in total, it's a gap of ten point four
23:43
Speaker 1: billion dollar worth of imports that has not entered the
23:47
Speaker 1: US and those categories that have been tariffed for China.
23:52
Speaker 1: Have you seen any evidence of this diversion of trade
23:55
Speaker 1: as a result of these harriffs that you just get
23:58
Speaker 1: the same products coming in from other countries rather than
24:01
Speaker 1: the reduction in imports overall. So we've seen a little
24:04
Speaker 1: bit of that, indeed, of diverge, diversion from them away
24:08
Speaker 1: from China and to other countries um as you can see,
24:11
Speaker 1: because there's still a ten billion gap in imports across
24:14
Speaker 1: those categories. It does only partly of set the impact
24:18
Speaker 1: of lower trade with China, but we've seen some of that.
24:21
Speaker 1: We've seen in particular if you look across the main
24:25
Speaker 1: trade partners for the US and the main countries in
24:28
Speaker 1: the Asian subplate chain, countries like Vietnam, Vietnam, Taiwan, and
24:34
Speaker 1: South Korea, I've seen an acceleration of their exports to
24:38
Speaker 1: the of their exports to the US. I noticed in
24:41
Speaker 1: your report that they also looked like there were just
24:44
Speaker 1: some sort of creative ways around these tarriers that were
24:47
Speaker 1: being found, like, for example, those big surge in the
24:50
Speaker 1: number of TVs coming in from China to the US
24:53
Speaker 1: which are not subject to tarriers, and a reduction in
24:56
Speaker 1: the number of TV parts coming in because those are
25:00
Speaker 1: subject to tariffs. But you would say that there's still
25:03
Speaker 1: been a real impact on Chinese producers. Yes, I think so.
25:07
Speaker 1: I think there has been a little bit of moving
25:10
Speaker 1: across categories from from tarift categories to nontarift categories at
25:16
Speaker 1: the margin, but overall, I think that's on the top.
25:19
Speaker 1: And indeed, um total Chinese imports, total imports from China
25:24
Speaker 1: to the US acrourse tarift and learned tarift categories of
25:27
Speaker 1: decline from the first quarter of twenty eighteen to the
25:31
Speaker 1: first quarter of because I mean President Trump would say
25:35
Speaker 1: this is all great, because it's going to provide room
25:38
Speaker 1: for all these US manufacturers to get in and start
25:40
Speaker 1: producing things themselves. Have we seen domestically made goods filling
25:45
Speaker 1: the gap? So unfortunately we can't see that from the
25:48
Speaker 1: data we have because there are childe data, so we
25:51
Speaker 1: only imports. What I would say is that when you
25:55
Speaker 1: look at them at this imports number, it has clearly
25:58
Speaker 1: has had a very disruptive effect on US imports from China.
26:04
Speaker 1: It has had a disruptive effect on US imports total
26:08
Speaker 1: total imports from the world in total, as we can
26:12
Speaker 1: see these ten billions worth of goods that didn't enter
26:16
Speaker 1: the US. And that's because China was such a dominant player,
26:20
Speaker 1: such a big player across those categories that as the
26:23
Speaker 1: rest of factories in the rest of the world, we're
26:25
Speaker 1: not big enough to pick up the slack and to
26:28
Speaker 1: HaVeset the effect. And because many of those goods are
26:31
Speaker 1: actually intermediate goods, good that US factories would use in
26:35
Speaker 1: their production process, it is likely to have a creeping
26:39
Speaker 1: impact on US industry because basically what happens is that
26:42
Speaker 1: part of the supply chain, the backward looking part of
26:46
Speaker 1: their access to supply has been broken. Thank you very much.
26:50
Speaker 1: I hope we have you on again as we track
26:52
Speaker 1: the impact of this trade will thank you thanks for
26:59
Speaker 1: listening to Stephanomic. Join us next week for more on
27:01
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Speaker 1: have to follow us Economics on Twitter. You can also
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Speaker 1: find me on at my Stephanomics. This episode was written
27:24
Speaker 1: and reported by Anaban Nag and Rishti beneval I should
27:28
Speaker 1: mention that you also heard a clip in that piece
27:30
Speaker 1: from Christine Leguard, which was actually recorded at a Bloomberg
27:33
Speaker 1: event in December six. It was produced by Magnus Hendrickson
27:37
Speaker 1: and edited by Nastrine Syria and Scott Laman, who's also
27:40
Speaker 1: the executive producer of Stephanomics Special thanks to Mehir Sharma
27:44
Speaker 1: and Mahiva Kuzan. Francesco Levy is the head of Bloomberg
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Speaker 1: Podcast