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

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

• China reroutes exports through south-east Asia

• Tony Blair’s workers participated in ‘Gaza Riviera’ mission

• 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 information exhibits: The worth of Chinese language exports to the US dropped by 43 per cent 12 months on 12 months in Might, in line with figures printed 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 enhance in transport to the Affiliation of Southeast Asian Nations commerce bloc and a 12 per cent rise to the EU.

The information showed “a really striking pattern”, stated Mark Williams, chief Asia economist at consultancy Capital Economics. “We noticed this throughout the first US-China commerce conflict. 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 cope with Vietnam that features a 40 per cent levy on items which can be trans-shipped via the nation, in a transfer that was broadly regarded as concentrating 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 embrace further trans-shipment levies.

Right here’s what else I’m protecting tabs on at this time:

• 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 mission to develop a postwar Gaza plan that envisaged kick-starting the enclave’s financial system with a “Trump Riviera” and an “Elon Musk Good 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 stage 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 “attempting to get a number of M&A accomplished 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 Pink Sea yesterday after the first suspected attack by Yemen’s Houthis this year on a industrial 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 social gathering to combat 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 social gathering would initially target key congressional races.

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

FT Journal

Can Hong Kong reprise its function as a world monetary hub? The Chinese language territory has lots to bounce again from: huge 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 non secular 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 formidable push in many years to revitalise its shipbuilding business — and compete towards China’s dominance of the sector — via consolidation and a proposed $7bn national fund.

Take a break from the information

China’s first Legoland, one of many world’s greatest, 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.