Tag Archives: CP+B

Firming World Trade Recovery Provides Cheer For China

Containers at a dock in China. Trade, exports and imports. Xinhua file photo

A glimmer of hope for China among the uncertainties over the world economy is that the recovery in world trade is firming up. The high trade growth rates of the double-digit export-led growth years are no where near being back. But the recovery from the mid-2011 contraction, slow though it is, has persisted long enough to suggest that global trade is past the trough of its current cycle.

Global trade levels rose by 1.4% in December, up from the 0.8% increase in November and a turnaround of the contractions of 0.9% and 0.7% in October and September, respectively, according to a new estimate from the Dutch Bureau for Economic Policy Analysis (the CPB; its figures are closely watched because they provide the earliest available measure of global trade.) The sharpest growth was among developing countries, up 3% over November’s rate, with export rates in Asia up 4.2%. Emerging economies are now firmly in the sights of Chinese exporters, who will get new government support to attack those markets.

That is doubly cheering for China’s exporters. In January, the country’s exports fell, largely because of the early Lunar New Year. Seasonally adjusted, they rose by 10.3% year-on-year, though that wasn’t the number that got the headlines.

The IMF still forecasts 6% growth in world trade in 2012, including a robust expansion in the trade in services. That is up from the 5.6% the CPB estimates for 2011, but down from 2010’s 14.9%. The brakes on a faster pick-up in trade are the expected ones:

  • the slow pace of the global economic recovery and the continuing concerns about the euro-crisis:
  • protectionist pressures increasing, if being kept politically constrained by mutual agreement of the G20, which has recently extended its pact not to go protectionist to the end of next year; and
  • stalled progress on the Doha round of talks on new trade rules. In the face of that, free-trade agreements are likely to proliferate, particularly in the Asia-Pacific region.

WTO-referred disputes are also likely to be more frequent. Most will probably involve China, the U.S. and the EU as complainant or defendant. Just as they do now. The disputes mechanism is slow and unwieldy, but it does resolve disputes without letting them spill over into other areas of bilateral relations, a useful safety valve in difficult times, and not just for trade relations.

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Lesson Of Groupon’s Superbowl Parody Ad

There is only one lesson for any company wishing to do business in China from the debacle over Groupon’s parodic Tibet TV ad (see below) aired during America’s Superbowl on Sunday. When it comes to Tibet, Beijing doesn’t have a sense of humor. Period.

Perhaps, two lessons. Bad ads are bad ads anywhere.

Some links for further reading:

  • A post from Groupon’s corporate blog, written before the ad aired, explaining the company’s “peculiar sense of humor” and its thinking behind the ads;
  • Shanghaiist rounds up the true cost to Groupon’s ambitions in China;
  • The home page of Crispin, Porter + Bogusky, the creative agency that produced the ads and which is bravely/brazenly streaming a far-from complimentary Twitter feed about its work;
  • Update: Groupon CEO Andrew Mason’s defense of the ad.

Set aside the special edgy culture of Superbowl ads, CP+B’s lack of China experience and its background in viral marketing, where parody and reality often seem interchangeable, but did no one there or at Groupon really see this coming? Our first thought was to recall Brendan Behan’s much quoted adage, “There is no such thing as bad publicity”. Then we remembered his full quote, “There is no such thing as bad publicity except your own obituary”.

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