Crypto News: Supply Lines: New trade paradigms

The China growth model — moving farmers into factories and selling their products to the world — is no longer driving miracle growth.

Over the past couple of decades, export-oriented manufacturing lifted hundreds of millions from poverty, giving rise to a period of dramatic economic expansion. But that playbook, is less and less able to generate the returns poorer countries need to raise standards of living. (Click here to read the full story in Bloomberg Businessweek.)

Automation is spreading, replacing workers with robots. Supply chains have fragmented as war tears through Ukraine and the Middle East. Post-pandemic inflation and higher interest rates have pushed once-promising nations like Ethiopia toward default. And tensions between the US and China are reshuffling trade patterns and inspiring protectionist policies.

Compared to two decades ago, manufacturing today makes up a smaller portion of global economic output — and China already accounts for more than a third of it. Add the next dozen countries into the mix and there's little room for places still looking for a way in. That means dozens of nations have no clear route to building wealth.

What comes next? Economists broadly agree on one thing: Growth is likely to be hard-won in the future. Diversification is key. Countries can no longer rely just on manufacturing. They should branch into services — a broad category covering everything from computer coders to pedicurists — and consider protectionist policies as the old rules of globalization shift and change.

On this episode of Bloomberg's Voternomics podcast, we discuss former US President Donald Trump's self-proclaimed favorite word: tariffs. While mainstream economists warn that hiking taxes on certain imports is bad for business, not everyone appears to be of the same mind.

Related Reading:

—Kai Schultz and Shruti Srivastava in New Delhi

Click here for more of Bloomberg.com's most-read stories about trade, supply chains and shipping.

Slowing growth | South Korea's economy barely managed to eke out growth last quarter following an earlier contraction, underscoring the risks from a softening export rally, broadening geopolitical tensions and a US presidential race that may impact trade-reliant nations. Gross domestic product expanded 0.1% in the three months through September from the previous quarter, the Bank of Korea said Thursday. That figure missed economists' forecast of a 0.4% expansion by a wide margin and came after a 0.2% contraction in the second quarter.

ECB President Christine Lagarde said that whoever wins the US election should beware of hurting global trade, in a renewed defense of the benefits of free commerce.
The European Union is debating whether to hike tariffs on more Russian agricultural and food products. Meanwhile, the US asked Group of Seven allies to consider sanctions on Russian palladium and titanium.
National Security Adviser Jake Sullivan defended US subsidies for domestic industry and curbs on China, amid warnings from the International Monetary Fund that trade barriers pose a mounting risk to global growth. Meanwhile, US Trade Representative Katherine Tai suggested Brazil should consider the risks of joining China's Belt and Road Initiative before making any final decisions.
TSMC halted shipments to a specific client after realizing semiconductors fabricated for that entity had found their way into Huawei products, potentially violating US sanctions, according to a person with direct knowledge of the matter.
With a wave of new jobs, factories and driving evangelists, the electric car transition is well past its tipping point.
Apple CEO Tim Cook promised to keep investing in China during a meeting with Beijing's top technology official, underscoring the country's vital role in the iPhone maker's global operations.
Boeing factory workers rejected a new labor contract that would have increased their wages by 35% over four years, exacerbating the aircraft manufacturer's crisis as it struggles to overcome a crippling work stoppage.

The Shanghai Containerized Freight Index was flat in the week ended Oct. 18 but will likely dip in the coming weeks as the industry enters its slow season and port congestion eases further, according to Bloomberg Intelligence.
Cosco Shipping Ports says its unit entered into share purchase agreements to buy minority interests in two terminal operation firms in Thailand for about $110 million in total, according to an HKEX filing.
Run SPLC after an equity ticker on Bloomberg to show critical data about a company's suppliers, customers and peers.
Use the AHOY function to track global commodities trade flows.
See DSET CHOKE for a dataset to monitor shipping chokepoints.
For freight dashboards, see {BI RAIL}, {BI TRCK} and {BI SHIP} and {BI 3PLS}
Click HERE for automated stories about supply chains.
On the Bloomberg Terminal, type NH FWV for FreightWaves content.
See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.

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