China redirects exports via south-east Asia in bid to evade Trump’s tariffs

Good morning and welcome again to FirstFT Asia. On at present’s agenda:

• China reroutes exports through south-east Asia

• Tony Blair’s employees participated in ‘Gaza Riviera’ undertaking

• How doing enterprise in Hong Kong is altering

We begin with new information suggesting that Chinese language companies are sending rising volumes of products to the US through south-east Asia in a bid to evade Donald Trump’s tariffs. Right here’s what to know.

What the info exhibits: The worth of Chinese language exports to the US dropped by 43 per cent yr on yr in Could, in accordance with figures revealed by the US census bureau — equal to $15bn-worth of products. However the nation’s general exports rose by 4.8 per cent in the identical interval, official Chinese language information confirmed, because the shortfall in commerce with the US was offset by a 15 per cent improve in delivery to the Affiliation of Southeast Asian Nations commerce bloc and a 12 per cent rise to the EU.

The info showed “a really striking pattern”, stated Mark Williams, chief Asia economist at consultancy Capital Economics. “We noticed this in the course of the first US-China commerce struggle. There was a reasonably instant shift. US imports from China dropped off, however they picked up from Vietnam and Mexico,” he stated.

Trans-shipping crackdown: Final week Washington struck a commerce take care of Vietnam that features a 40 per cent levy on items which can be trans-shipped by the nation, in a transfer that was broadly considered focusing on Chinese language re-exports to the US. Many nations haven’t but reached commerce offers with Washington. The pause on Trump’s “reciprocal” tariffs ends on Wednesday, and any future offers may additionally embody further trans-shipment levies.

Right here’s what else I’m holding tabs on at present:

• Financial information: Thailand publishes inflation figures for June.

• Brics summit: The gathering of the group of growing nations continues in Rio de Janeiro, Brazil. The absence of Chinese leader Xi Jinping has thrown a query mark over the assembly.

• Trump-Netanyahu assembly: The Israeli chief meets with the US president to debate a potential ceasefire with Hamas.

5 extra prime tales

1. The Tony Blair Institute participated in a undertaking to develop a postwar Gaza plan that envisaged kick-starting the enclave’s financial system with a “Trump Riviera” and an “Elon Musk Sensible Manufacturing Zone”. The plan outlined in a slide deck, seen by the FT, was led by Israeli businessmen and used monetary fashions developed inside Boston Consulting Group to reimagine Gaza as a thriving buying and selling hub.

2. Chinese language mining acquisitions abroad have hit their highest degree in additional than a decade as corporations race to safe the uncooked supplies that underpin the worldwide financial system. Specialists stated that Chinese language teams are “making an attempt to get loads of M&A executed earlier than geopolitics get troublesome”. Here’s more on China’s mining rush.

3. The crew of a Greek-owned cargo ship was pressured to desert the vessel within the Purple Sea yesterday after the first suspected attack by Yemen’s Houthis this year on a business vessel. Hours after the assault, Israel’s defence minister wrote on X that Israel had “forcefully” struck Houthi-linked targets, together with the ports of Hodeidah, Al-Salif and Ras Isa and an influence station.

4. Elon Musk stated he had fashioned a brand new political get together to battle the “one-party system” afflicting the US, after falling out with Trump over the president’s landmark home coverage invoice. The billionaire advised that the get together would initially target key congressional races.

5. The seek for 11 women lacking from a summer season camp in Texas continued for a 3rd day because the demise toll from flash flooding climbed to virtually 70 individuals, together with 21 youngsters. The Guadalupe River that runs by the Hill Nation in central south Texas rose by eight metres in 45 minutes in the early hours of Friday, in accordance with officers, bursting its banks and destroying roads and property.

FT Journal

Can Hong Kong reprise its function as a worldwide monetary hub? The Chinese language territory has quite a bit to bounce again from: monumental pro-democracy protests in 2019 and 2020; a tricky new nationwide safety regulation imposed by Beijing; then there have been its strict Covid-19 insurance policies. Recent off a two-year posting in Hong Kong, the FT’s Kaye Wiggins explores how doing business in the city is changing.

We’re additionally studying . . . 

• ‘Dragon-Bear’ embrace: The China-Russia partnership seeks to construct a brand new world order. However is that this bond as close as it seems?

• Biohacking: FT Journal goes inside a “neurohacking” camp that guarantees 40 years religious enlightenment in 5 days.

• Susceptible leaders: Admissions of overwhelm present humanity, writes Pilita Clark — if individuals in cost are strategic with their weaknesses.

Chart of the day 

Japan is mounting its most bold push in many years to revitalise its shipbuilding business — and compete in opposition to China’s dominance of the sector — by consolidation and a proposed $7bn national fund.

Take a break from the information

China’s first Legoland, one of many world’s largest, formally opened in Shanghai on Saturday. Among the many sights to lure guests: a Lego reconstruction of the Nice Wall and replica of the city’s distinctive skyline.