No Winners In Trade Wars? Japan Builds A Huge Trade Circle Outside China And Vietnam, And Vietnam Opens The Golden Age.

The latest Sino US trade negotiations have just ended. As the world's first and second largest economies, China and the United States resumed negotiations for the first time after more than a month of trade war truce, attracting worldwide attention.

Under the background of global economic integration, if we can not effectively make up for differences and resolve disputes, the result of trade war is bound to be a two losers and a drag on the world economy. There is no winner in the two sides of the trade war.

However, some countries are becoming winners in the Sino US trade war.

Japan builds huge trade circles outside China and the United States.

In December 30, 2018, the p Pacific Partnership Agreement "TPP11", which does not contain 11 states, has entered into force.

By February 1, 2019, the economic cooperation agreement between Japan and the European Union (EU) (EPA) will also take effect.

Outside the Sino US trade war, the huge trade circle, which accounts for nearly 4 of the world's GDP, will start and will become the touchstone to prevent trade protectionism.

With regard to TPP11, the 10 countries, except Japan, will basically abolish all tariffs.

Japan will also end tariffs on 100% industrial products and 82.3% agricultural and forestry products.

In Japan and Europe EPA, Japan has abolished tariffs on 99% categories in terms of 94% categories and EU.

Reduction of US $2 billion tariff

The effective implementation of the relevant agreements has brought huge results.

Takahashi Junki, director of research at the Japan Institute of international trade and investment, said that from the tariffs imposed on Japan's exports, only 5 countries such as Canada and Australia would be reduced by about 2 billion in first years.

Japan's tariffs on imports from 10 other countries will be reduced by about 1 billion in first years.

Enterprises have begun to take action to see business opportunities.

Taking beef imported from Australia and New Zealand as an example, a tariff of up to 38.5% will be phased down to 9% in sixteenth years.

In the first half of December, before the entry into force of TPP11, the price of hot commodities in Tasmania, Australia, was cut by about 20~130 yen /100 grams.

Suntory Wine International will reduce the shipping price of 69 kinds of wine since February 1st, which came into force in Japan and Europe EPA.

According to the price of shipment, it is down 1 ~ 11%, that is, 20~140 yen.

In the spring of 2018, Itou Tada made an additional contribution of about 5 billion yen to Vietnam's state textile giant VINATEX, becoming the largest shareholder after the Vietnamese government, hoping to strengthen overseas exports.

For example, when exporting 10 thousand yen coat to Canada, nearly 20% of tariffs will be reduced to zero.

The business advantage of reducing sales price and ensuring profit margins will be strengthened.

By 2021, exports will increase to 1.5 times 100 billion yen.

Since December 30th, tariffs on passenger cars exported to Canada have dropped from 6.1% to 5.5%, and then dropped to zero in stages.

Japanese manufacturers expect this will help improve competitiveness, including exports of spare parts.

On the other hand, Japan and other countries lowered tariffs on China and the United States without joining the TPP11.

In 2007, when the EPA came into effect in Chile and Japan, Chile's wine was popular in Japan, and surpassed France in 2015, ranking first.

In 2007, the import volume of wine produced in the United States and Chile was almost 1 thousand liters, almost the same as that in 2017, but 8 times the difference in 2017.

If the free trade area expands, the competitiveness of the United States will also drop in beef and other fields.

In the field of clothing, it is not only the sewing factories, but also the trend of moving the production base of raw materials such as silk and fabrics from China to Vietnam.

This is because we need to enjoy the TPP11 tax reduction measures, and it is necessary to use silk thread produced in TPP11 member countries.

China's economic scale is considered to be more likely to overtake the US in the future. The action to create TPP also aims to build an economic circle that can fight China and establish a bounding net to promote China's opening up of the market.

If the United States joins TPP11 and other free trade circles, the GDP of the participating countries will account for 6 of the world's total.

However, in 2017, President Trump announced his withdrawal from the TPP.

As a result, under the leadership of Japan, the agreement between the 11 countries came into force.

Thailand, Indonesia and the United Kingdom are also discussing TPP11.

If the free trade area shows the acceleration of economic growth, it will be possible to further expand the participating countries.

Japan's first EPA signed with Singapore in 2002 has entered into force for 16 years.

The Japanese government estimates that the pulling effect of TPP11 and Japan Europe EPA on Japan's GDP reached about 7 trillion and 800 billion yen and about 5 trillion and 200 billion yen respectively.

Japan's economic and fiscal regeneration Shigeki Minmitsu stressed that "this is Japan's new growth engine."

For Japan, this will also play a positive role in the negotiation of the US Japan trade agreement on cargo (TAG) launched in early 2019.

The Japanese government hopes to make the United States feel anxious and promote agricultural tariffs to reach a consensus level in "TPP and Japan Europe EPA".

Kinouchi Doyoung, Japan's Nomura comprehensive research institute, said, "the entry into force of TPP11 and expansion of Member States will become a trade protectionist breakwater.

It may also become a weapon to pull the United States back to free trade.

In the medium to long term, can it help the US change its mind and allow China to further promote market opening?

The trend of TPP11 and Japan Europe EPA will become the key.

Two, Sino US trade war actually opened Vietnam's "golden age".

Since the Sino US trade war, many American enterprises that purchase and produce products in China have turned to Southeast Asia, where they hope to find a substitute for "made in China", and Vietnam has now become the preferred destination to replace "made in China".

In the cold and rainy weather brought by the trade war, the neighbours, Vietnam, quietly produced beautiful economic data this year before we suddenly discovered that the winner of the trade war really existed.

In October 14th, according to the Japan economic news, GoerTek AirPods, an apple wireless headset assembly in China, said to suppliers that it plans to move the AirPods production line to Vietnam.

In fact, the pfer of electronic manufacturing industry to Vietnam has been a new normal in recent years.

For example, the United States and Microsoft moved NOKIA to Hanoi. Intel spent more than 1 billion dollars in Xigong high tech park, and plans to put 80% of its global chip capacity into this.

In order to avoid the higher tariffs imposed by the United States on Chinese goods and services, the impact of trade war will be lessen.

Chinese manufacturers, including multinational producers, have begun to move some of the high profit industrial businesses to Vietnam.

This is especially evident in the electronics industry. Intel, Intel, Foxconn (Foxconn), LG and Samsung (Samsung) have recently moved to Vietnam.

This is equal to opening the golden age of Vietnam.

GDP growth exceeds China again

Vietnam's import and export volume is expected to reach US $239 billion in 2018. We should know that China's exports amounted to US $2 trillion and 263 billion 522 million in 2017, while Vietnam's population is less than 8% of China's population. This year's exports are expected to reach more than 10% of China's exports.

Not only Vietnam, but also Southeast Asian countries are developing rapidly, and mobile phone exports in India and India in South Asia are growing rapidly, almost exceeding Vietnam.

Of course, Vietnam is not without a short board. There is a gap between China's industrial structure and population quality. But with the deepening of trade friction, with the passage of time, everything is possible in the future.

Vietnam's exports have already accounted for more than 10% of China's exports, and Southeast Asia plus India will seize the market that originally belongs to China. The threat to China can not be underestimated.

In the first quarter of 2018, Vietnam's GDP grew by 7.38% over the first quarter of this year, the highest increase in 10 years, according to the Statistics Bureau of Vietnam.

In June 29th, data released in the first half of this year showed that Vietnam's gross domestic product (GDP) increased by about 7.08% compared with the same period last year, and GDP growth rate surpassed that of China.

Under such a trend, a lot of cheerful Vietnamese have already built up their self-confidence, and even do not put the object of imitation in China.

It's hard to believe that in the past 15 years, the United States has always been the largest exporter of Vietnamese goods.

In the first half of 2018, Vietnam's exports to the United States amounted to US $101 billion 40 million, accounting for 88% of total exports.

The annual export volume is expected to reach US $239 billion. Vietnam has become the twelfth largest source of import and the sixteenth largest trading partner of the United States.

Vietnam also enjoys huge surpluses in the US Vietnam trade, which has been cheap.

In 2016, Vietnam exported US $38 billion 464 million to us merchandise exports, while imports from the United States amounted to only US $8 billion 700 million and the trade surplus reached US $29 billion 700 million.

In 2017, the surplus was more than 30 billion dollars.

The new version of TPP has become an economic booster for Vietnam.

Vietnam is becoming more and more active in the international trade system.

In March 8th 18, Vietnam, Japan and other 11 countries formally signed the new version of TPP, the comprehensive progress of the p Pacific Partnership Agreement (CPTPP), Vietnam's clothing and textile, leather and footwear industries and other low-end manufacturing industries, becoming the biggest winner of the agreement, and exports are expected to increase by 8.3% to 10.8%.

These low-end manufacturing products are competing with China's exports to the United States, and have always been the traditional export advantages of China, and are being squeezed by the increase in domestic manufacturing costs.

Vietnam has also signed FTA agreements with major trading partners such as the European Union, Japan and South Korea, so as to enhance the competitiveness of Vietnam's commodities and export to boost economic growth.

Not only the low-end manufacturing advantage industry has been replaced by Vietnam, but from the future trend, the high-end industry may also be evacuated.

After the escalation of trade wars, China's commodity exports are blocked, which will prompt the pfer of related industries to Vietnam, stimulate the upgrading of Vietnamese industries and improve the industrial chain. Thus, the evacuation of China's real industry and the reinforcement of Vietnam's economy will take place.

Even if we do not consider the external environment of trade war, Vietnam should not underestimate its internal factors.

Unlike the grim reality of China's aging population and asset bubbles, Vietnam has a population structure of young people. Almost half of the 100 million people are young people aged 10 to 30.

All this will make Vietnam one of the fastest growing economies in the world.

In October this year, Standard Chartered Bank forecast in Vietnam's economy that foreign direct investment will continue to maintain a high level of about $17 billion per year in 2018, 2019 and 2020.

Against this background, Vietnam is increasingly becoming the winner of this conflict in response to the Sino US trade war's impact on its economy.

Vietnam has been smiling for a long time in the Sino US trade war.

In September, Vietnamese Prime Minister Ruan Chunfu (Nguyen Xuan Phuc) said happily that Vietnam will not take sides in the dispute and intends to maintain good trade relations with the two countries.

How similar history is.

30 years ago, after the US and Japanese trade war, the United States failed to attract the industry to return and curb the trend of Industrial Hollowing. Instead, capital and technology flowed to the lowland China in large scale, and China became the biggest winner in the US Japan trade war.

Like Vietnam today, success has seized development opportunities.