May 2003 Edition
JUNK
U.S. exports to China are booming in an unlikely area: junk. Every year, tons of metal from discarded cars and household appliances, paper from empty cardboard boxes and crumpled newspapers and plastic from dumped soda bottles are processed, piled on to ships and sent across the ocean. They become the raw material for paper mills, steel mills and other factories, feeding China's fast-growing, export-oriented industrial economy. Last year the U.S. exported $1.2-billion of waste and scrap to China, up from $194-million five years earlier. Scrap is now the U.S.'s third-largest export to China.
APPLIANCES
In 1964, 37 Canadian companies manufactured washing machines, stoves and refrigerators. Today there are four and next year there will be three. Workers in the industry used to total 10,000. Now there are 2,500. Cheap Chinese imports are not the only problem. Competition is so intense in this low-margin business that North American, European and Asian manufacturers are abandoning their regional plants in favour of global operations that serve an entire continent.
CALL CENTRES
One of the brightest spots in Mexico's slowing telecommunications industry are call centres. There are 350 call centres in Mexico with growth projected at 25 per cent this year. This is small compared with 80,000 call centres in the U.S., the biggest player in a US$38-billion world industry. Mexican wages for operators in call centres are 70 to 80 per cent less than in the U.S. Income from Mexican call centres for 2001 was US$163-million and it is forecast to grow to US$236-million by 2005.
MUSIC
A new marketing campaign has been launched in Canada to get young people to start buying CDs and stop downloading music from the Internet. The campaign is aimed at people aged 9 to 17 and includes a website at www.keepmusiccoming.com. Music executives say CD sales have dropped 20 per cent in three years, representing a loss of C$250-million.
CLEAN
A coalition of Canada's largest coal-fired power producers has received almost half a million dollars from energy research agencies to help develop a $1-billion, 10-year clean-coal research project.
POLITICS
The tension between Russia and the U.S. over Iraq stems in part from the fact that the previous Iraqi regime owes Russia over US$-8-billion. Lukoil, Russia's largest oil company, had a US$3.5-billion deal to develop Iraq's massive Western Kurna oilfield. Both the debt and the oil contracts are now in doubt. Also, Russia's fragile economy needs the price of oil to remain high (it is estimated that a $1 per barrel decline in the price of oil costs Russia's budget a billion dollars). Meanwhile, the U.S needs the price of oil to decline to avert a recession.
CONSOLIDATION
The Chinese government plans to merge the parent companies of its largest retailers to meet growing competition from foreign retail giants that are rapidly expanding in China. Assets of the four major merged companies will be reorganized into hypermarket, supermarket, convenience store and department store units, preventing the local players from competing against each other and helping them deal with competition from Wal-Mart, Carrefour and other international retailers.
EYES
Eye diseases such as glaucoma could one day be treated by pharmaceuticals delivered through contact lenses. Chemical engineers have been able to make soft contact lenses containing tiny embedded particles that slowly release drugs directly where they are needed. One of the biggest problems with using eye drops to deliver medication to the eyes is that about 95 per cent of the medication goes where it is not needed.
RETAIL
According to Statistics Canada, retail sales of all major commodity groups were up in 2002 over 2001. Consumers spent a total of $307.5 billion in retail stores in 2002, up 6.0 per cent over 2001. The increase in sales of health and personal care products outstripped all other categories. This includes everything from prescription drugs, over the counter drugs and vitamins to eyewear, cosmetics and other toiletries. Sales increased 9.2 per cent to $23.1 billion in 2002. About 45 per cent of this was on prescription drugs, which registered growth of 12.2 per cent. Sales of non prescription drugs and vitamins rose 8.3 per cent to $3.9 billion.
LEAVE
About 10 per cent or 30,000 of Canada's 300,000 new fathers in 2001 took parental leave. This is up sharply from the three per cent or 9,000 new fathers that took leave a year earlier. Canada now ranks fourth in terms of the participation level of fathers who take parental leave. The top country is Norway, where almost 80 per cent of fathers elect to take time off to spend time with children.
TICKETS
In a growing number of Canadian cities, parking tickets can now be paid on-line. As web-payments gain acceptance, some communities are seeing 20 per cent of tickets paid on-line. Speed and ease of service are the factors cited in the acceptance of the process.
SIZE
The size of a average new house in Britain has shrunk by about a third in the past 80 years. The traditional high ceilings and spacious rooms are making room for compact homes crammed on to tiny plots of land. The average five bedroomed home built in 1920 would have four reception rooms and occupy 3,440sq ft. A newly-built house today has three reception rooms and just 2,409sq ft. Ceiling height has dropped from 11 feet to 8ft 9in.
LOANS
For the first time in its 59- year history, The Business Development Bank of Canada (BDC) has exceeded the $2-billion mark in net authorizations in one year. These results were achieved by granting some 6,300 loans through its network of 82 branches across the country. This represents a 17 per cent growth over the previous fiscal year. It took 54 years -from 1944 to 1998 - for the Bank to reach $1-billion in authorizations.
TIRES
Michelin has announced that it will use electronic tags on tires to help drivers monitor tire pressure. The tire maker plans to use embedded technology that will wirelessly link the tire to the car it 1s mounted on. The system consists of an antenna and a circuit the size of a match head. The circuit, or tag, will store, send and receive data through radio signals to track the condition of the tire.
SURPLUS
OPEC kingpin Saudi Arabia, which budgeted a US$10.4-billion shortfall for 2003, is now set to post a huge surplus of more than US$13-billion on soaring oil prices and high output. Saudi oil production stood at around 7.6-million barrels a day when the budget was announced late last year but the kingdom is currently believed to be producing more than 9.5-million barrels since the war began. Government wages consume more than half of the Saudi budget.
POLICY
Canada's trade policy objectives for 2003 include the following: resolution of the Canada\U.S. softwood lumber dispute; smooth flow of goods to the U.S.; progress at the WTO and Free Trade of the Americas negotiations and concluding free trade agreements with Central America and Singapore.
LOCATION
A survey by Ericsson Canada shows that Canadians want emergency-location services and safety alerts on their mobile phones far more than they desire wireless Internet and camera phones. When a caller uses the traditional fixed telephone to call 911, their precise location is known immediately. With mobile phones, a 911 call on a cell phone can only be narrowed to about a 100-metre radius in urban areas.
TRENDS
Honda in England is attempting to raise the retirement age for workers at its British plant from 60 to 62 in an effort to stave off a financial crisis in its stricken pension fund which has a deficit of $100-million.
FOUND
Long-lost blueprints for an invention that could have revolutionized the auto industry have been found in an old tool box. The so-called Pogue carburetor, invented in Winnipeg, caused an uproar in the 1930s when its inventor reportedly drove 200 miles in his Ford V8 on one gallon of fuel. A lawnmower engine purred for seven days on a single quart of gas. At the time, it rattled oil companies and panicked the Toronto Stock Exchange. The documents have been authenticated by a chartered patent lawyer and are genuine.
TECHNOLOGY
The U.S. technology sector which has been battered by a downturn in corporate spending, lost about 560,000 jobs in 2001 and 2002. The sector's work force fell by 10 per cent last year to 5.15 million. The majority of the decline was in manufacturing which lost 412,000 jobs, a 20 percent decrease.
JUICE
Scientists have found that freshly-squeezed orange juice is no healthier than the long-life pasteurised variety. Although fresh orange juice sold in chilled cabinets may taste better than the cheaper carton juice, it has the same antioxidant and nutritional content. Antioxidants are substances like vitamin C or beta carotene that mop up free radicals in the body and prevent cells from being damages.
SARS
According to the Hong Kong Retail Management Association, Retail sales in Hong Kong have dropped 50 per cent since the outbreak of severe acute respiratory syndrome (SARS) the deadly pneumonia-like virus. The group states it will take months for consumer confidence to recover and has asked landlords and utilities to cut rents and fees for three months to help merchants stay afloat during the outbreak which has also kept tourists away and residents out of shops, restaurants and other crowded places.
SYRUP
Canada accounts for 80 per cent of the world's production of maple syrup, and 90 per cent of Canada's production takes place in Quebec.
BOTTLES
Investors are turning to old handmade bottles, some of which are now worth their weight in gold. A rare bottle made in San Francisco in 1858 recently sold for US$69,000 At a recent auction which ended in March, 249 bottles sold for US$150,000. Some old whisky flasks are selling at around US$40,000 each while ink bottles dating from the American Revolution can go for as much as US$20,000.
WATER
A new United Nations body to help avoid possible water wars in the future has been announced. The Water Co-operation Facility will be based in Paris at the headquarters of the cultural organization Unesco. It will mediate in disputes between countries which share a single river basin. It follows publication of a report identifying 17 basins which have the potential for conflict.
TRIVIA
A Dutchman who has eaten pigeon food three times a day for the last 11 years claims it could be the answer to world famine. He says his meals are nutritious, filling and cost next to nothing. He soaks the seeds overnight to soften them and cooks them the next day.
Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.
Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp
U.S. exports to China are booming in an unlikely area: junk. Every year, tons of metal from discarded cars and household appliances, paper from empty cardboard boxes and crumpled newspapers and plastic from dumped soda bottles are processed, piled on to ships and sent across the ocean. They become the raw material for paper mills, steel mills and other factories, feeding China's fast-growing, export-oriented industrial economy. Last year the U.S. exported $1.2-billion of waste and scrap to China, up from $194-million five years earlier. Scrap is now the U.S.'s third-largest export to China.
APPLIANCES
In 1964, 37 Canadian companies manufactured washing machines, stoves and refrigerators. Today there are four and next year there will be three. Workers in the industry used to total 10,000. Now there are 2,500. Cheap Chinese imports are not the only problem. Competition is so intense in this low-margin business that North American, European and Asian manufacturers are abandoning their regional plants in favour of global operations that serve an entire continent.
CALL CENTRES
One of the brightest spots in Mexico's slowing telecommunications industry are call centres. There are 350 call centres in Mexico with growth projected at 25 per cent this year. This is small compared with 80,000 call centres in the U.S., the biggest player in a US$38-billion world industry. Mexican wages for operators in call centres are 70 to 80 per cent less than in the U.S. Income from Mexican call centres for 2001 was US$163-million and it is forecast to grow to US$236-million by 2005.
MUSIC
A new marketing campaign has been launched in Canada to get young people to start buying CDs and stop downloading music from the Internet. The campaign is aimed at people aged 9 to 17 and includes a website at www.keepmusiccoming.com. Music executives say CD sales have dropped 20 per cent in three years, representing a loss of C$250-million.
CLEAN
A coalition of Canada's largest coal-fired power producers has received almost half a million dollars from energy research agencies to help develop a $1-billion, 10-year clean-coal research project.
POLITICS
The tension between Russia and the U.S. over Iraq stems in part from the fact that the previous Iraqi regime owes Russia over US$-8-billion. Lukoil, Russia's largest oil company, had a US$3.5-billion deal to develop Iraq's massive Western Kurna oilfield. Both the debt and the oil contracts are now in doubt. Also, Russia's fragile economy needs the price of oil to remain high (it is estimated that a $1 per barrel decline in the price of oil costs Russia's budget a billion dollars). Meanwhile, the U.S needs the price of oil to decline to avert a recession.
CONSOLIDATION
The Chinese government plans to merge the parent companies of its largest retailers to meet growing competition from foreign retail giants that are rapidly expanding in China. Assets of the four major merged companies will be reorganized into hypermarket, supermarket, convenience store and department store units, preventing the local players from competing against each other and helping them deal with competition from Wal-Mart, Carrefour and other international retailers.
EYES
Eye diseases such as glaucoma could one day be treated by pharmaceuticals delivered through contact lenses. Chemical engineers have been able to make soft contact lenses containing tiny embedded particles that slowly release drugs directly where they are needed. One of the biggest problems with using eye drops to deliver medication to the eyes is that about 95 per cent of the medication goes where it is not needed.
RETAIL
According to Statistics Canada, retail sales of all major commodity groups were up in 2002 over 2001. Consumers spent a total of $307.5 billion in retail stores in 2002, up 6.0 per cent over 2001. The increase in sales of health and personal care products outstripped all other categories. This includes everything from prescription drugs, over the counter drugs and vitamins to eyewear, cosmetics and other toiletries. Sales increased 9.2 per cent to $23.1 billion in 2002. About 45 per cent of this was on prescription drugs, which registered growth of 12.2 per cent. Sales of non prescription drugs and vitamins rose 8.3 per cent to $3.9 billion.
LEAVE
About 10 per cent or 30,000 of Canada's 300,000 new fathers in 2001 took parental leave. This is up sharply from the three per cent or 9,000 new fathers that took leave a year earlier. Canada now ranks fourth in terms of the participation level of fathers who take parental leave. The top country is Norway, where almost 80 per cent of fathers elect to take time off to spend time with children.
TICKETS
In a growing number of Canadian cities, parking tickets can now be paid on-line. As web-payments gain acceptance, some communities are seeing 20 per cent of tickets paid on-line. Speed and ease of service are the factors cited in the acceptance of the process.
SIZE
The size of a average new house in Britain has shrunk by about a third in the past 80 years. The traditional high ceilings and spacious rooms are making room for compact homes crammed on to tiny plots of land. The average five bedroomed home built in 1920 would have four reception rooms and occupy 3,440sq ft. A newly-built house today has three reception rooms and just 2,409sq ft. Ceiling height has dropped from 11 feet to 8ft 9in.
LOANS
For the first time in its 59- year history, The Business Development Bank of Canada (BDC) has exceeded the $2-billion mark in net authorizations in one year. These results were achieved by granting some 6,300 loans through its network of 82 branches across the country. This represents a 17 per cent growth over the previous fiscal year. It took 54 years -from 1944 to 1998 - for the Bank to reach $1-billion in authorizations.
TIRES
Michelin has announced that it will use electronic tags on tires to help drivers monitor tire pressure. The tire maker plans to use embedded technology that will wirelessly link the tire to the car it 1s mounted on. The system consists of an antenna and a circuit the size of a match head. The circuit, or tag, will store, send and receive data through radio signals to track the condition of the tire.
SURPLUS
OPEC kingpin Saudi Arabia, which budgeted a US$10.4-billion shortfall for 2003, is now set to post a huge surplus of more than US$13-billion on soaring oil prices and high output. Saudi oil production stood at around 7.6-million barrels a day when the budget was announced late last year but the kingdom is currently believed to be producing more than 9.5-million barrels since the war began. Government wages consume more than half of the Saudi budget.
POLICY
Canada's trade policy objectives for 2003 include the following: resolution of the Canada\U.S. softwood lumber dispute; smooth flow of goods to the U.S.; progress at the WTO and Free Trade of the Americas negotiations and concluding free trade agreements with Central America and Singapore.
LOCATION
A survey by Ericsson Canada shows that Canadians want emergency-location services and safety alerts on their mobile phones far more than they desire wireless Internet and camera phones. When a caller uses the traditional fixed telephone to call 911, their precise location is known immediately. With mobile phones, a 911 call on a cell phone can only be narrowed to about a 100-metre radius in urban areas.
TRENDS
Honda in England is attempting to raise the retirement age for workers at its British plant from 60 to 62 in an effort to stave off a financial crisis in its stricken pension fund which has a deficit of $100-million.
FOUND
Long-lost blueprints for an invention that could have revolutionized the auto industry have been found in an old tool box. The so-called Pogue carburetor, invented in Winnipeg, caused an uproar in the 1930s when its inventor reportedly drove 200 miles in his Ford V8 on one gallon of fuel. A lawnmower engine purred for seven days on a single quart of gas. At the time, it rattled oil companies and panicked the Toronto Stock Exchange. The documents have been authenticated by a chartered patent lawyer and are genuine.
TECHNOLOGY
The U.S. technology sector which has been battered by a downturn in corporate spending, lost about 560,000 jobs in 2001 and 2002. The sector's work force fell by 10 per cent last year to 5.15 million. The majority of the decline was in manufacturing which lost 412,000 jobs, a 20 percent decrease.
JUICE
Scientists have found that freshly-squeezed orange juice is no healthier than the long-life pasteurised variety. Although fresh orange juice sold in chilled cabinets may taste better than the cheaper carton juice, it has the same antioxidant and nutritional content. Antioxidants are substances like vitamin C or beta carotene that mop up free radicals in the body and prevent cells from being damages.
SARS
According to the Hong Kong Retail Management Association, Retail sales in Hong Kong have dropped 50 per cent since the outbreak of severe acute respiratory syndrome (SARS) the deadly pneumonia-like virus. The group states it will take months for consumer confidence to recover and has asked landlords and utilities to cut rents and fees for three months to help merchants stay afloat during the outbreak which has also kept tourists away and residents out of shops, restaurants and other crowded places.
SYRUP
Canada accounts for 80 per cent of the world's production of maple syrup, and 90 per cent of Canada's production takes place in Quebec.
BOTTLES
Investors are turning to old handmade bottles, some of which are now worth their weight in gold. A rare bottle made in San Francisco in 1858 recently sold for US$69,000 At a recent auction which ended in March, 249 bottles sold for US$150,000. Some old whisky flasks are selling at around US$40,000 each while ink bottles dating from the American Revolution can go for as much as US$20,000.
WATER
A new United Nations body to help avoid possible water wars in the future has been announced. The Water Co-operation Facility will be based in Paris at the headquarters of the cultural organization Unesco. It will mediate in disputes between countries which share a single river basin. It follows publication of a report identifying 17 basins which have the potential for conflict.
TRIVIA
A Dutchman who has eaten pigeon food three times a day for the last 11 years claims it could be the answer to world famine. He says his meals are nutritious, filling and cost next to nothing. He soaks the seeds overnight to soften them and cooks them the next day.
Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.
Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp
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