July 2011 Edition
TANKERS
A surplus of supertankers competing to haul Middle East crude oil has swelled, hindering owners' chances of making charters to Asia profitable. There are now 18 per cent more very large crude carriers, or VLCCs, than there are likely cargoes. Returns from VLCCs on the industry's benchmark Saudi Arabia to Japan route have fallen around six per cent to US$4098 a day.
TURNOVER
According to Booz & Company consultants, 11.6 per cent of the world's 2,500 biggest publicly listed companies got new CEOs in 2010. The CEO turnover rate fell below 12 per cent for the first time since 2003 and was substantially lower than the 14.3 per cent rate in 2009. The highest turnover rate, at nearly 19 per cent, was in Japan but much of this was because of retirements. Companies in Brazil, India and Russia changed bosses nearly as often as the Japanese did. Nearly 30 per cent of CEOs who left office in those three countries were forced out.
EXPECTATIONS
Despite decades of apparent gains towards workplace equality, Canadian women starting careers still expect to earn considerably less than men and wait longer for promotions a sweeping new study has found. A review of 23,000 university students across Canada found that women expected an average initial salary 13.5 per cent lower than young men aiming for equivalent jobs. And women expected to wait an average of 12 per cent longer than men to get their first promotion. There was an average gap in expectations of 17.5 per cent after five years on the job in all types of work. The average initial salary expectation for women was C$40,421 compared to $46,727 for men.
BOOKS
Until now, Amazon Inc. has been a pusher of paper. But the Seattle-based company recently announced that it is now selling more e-books than books printed on paper. This has happened on a temporary basis in the past, for instance at Christmas, when Kindles were being given as gifts. But the company is now consistently selling 105 Kindle books for every 100 physical books, which suggests that the growth of digital books is now being sustained.
TRENDS
Booming lumber sales from British Columbia to China (in March sales tripled from a year ago) is creating its own transportation problems as lumber is piled up at west coast ports ready to be shipped to China. Now, four major BC producers have partnered to charter a ship for a year to give them more control over the movement of their products. Lumber and pulp fill about half of all containers exported from Vancouver which has strained the availability of containers. Seven round-trips are planned for this year which will bring a total of 175-million board feet of lumber to China, more than the total amount of wood BC shipped to China in 2005.
DEMOGRAPHY
According to the UN, the world's population will surpass 7-billion at the end of October, a few months earlier than had been expected. The global total will continue to rise slowly until 2100, when it will flatten out at 10.1-billion During the period of fastest growth, in the late 1980s, the world's population was rising by over 88-million a year. Now, annual growth is down to 75-million and by 2050 will be only 40-million. Today, Nigeria with 158-million people is the world's seventh largest country; by 2100 it will be the third largest with 730-million people.
CHONGQING
An explosion of manufacturing and construction activity draws as many as 500,000 new residents to this Chinese inland mountain city each year. The municipality of Chongqing covers an area the size of Switzerland with a population of 33-million. Since Chongqing's creation as a stand-alone economic zone in 1997, the gross domestic product has increased by 300 per cent; industrial output has risen 1,000 per cent and financial income has jumped by 1,460 per cent. The GDP growth target for the city for 2011 is 13.5 per cent, the highest of any other Chinese municipality.
ROADKILL
Globally, road accidents were the ninth leading cause of death in 2004, according to the World Health Organization (WHO), they could be the fifth by 2030, above HIV/AIDS and lung cancer. The WHO has now launched a "decade of road safety," with a plan to save 5-million lives and prevent 50-million serious injuries by 2020. Poor and middle income countries account for more than 90 per cent of road deaths but just 48 per cent of the world's registered vehicles.
OUTSOURCING
With the pay for factory workers soaring in many countries overseas, some companies are increasingly rethinking their manufacturing operations. Caterpillar, maker of heavy equipment, is moving some of its excavator production to Texas from abroad; Sauder, a U.S. furniture maker is moving production back to the States; NCR has returned production of cash machines to Georgia from low-wage countries and Wham-O has restored half of its Frisbee and Hula Hoop production to America from China and Mexico.
AID
Japan is set to make the traumatic leap from being one of the worlds's most generous aid donors to one of its biggest aid recipients as it begins the mammoth task of cleaning up the wreckage left by the March earthquake. According to the World bank, the total cost of the recovery will be US$235-billion which would make it the world's most expensive disaster. Until a few months ago, Japan was the world's fifth biggest aid donor, lending or giving away, $9.5-billion a year. The disaster has transformed it into a leading destination for charity.
INFRASTRUCTURE
The Democratic Republic of Congo has started a five-year, US$600-million renovation of rail lines in the southeast of the country to boost trade, lower prices and develop its mining industry. The project is being funded by the World Bank and the government, with $200-million coming from a minerals-for-infrastructure accord signed with China in 2009. The rehabilitation of 700 kilometres of track in the mineral-rich region will help boost the agriculture and mining industries, encourage the development of isolated communities and help fight poverty.
DROUGHT
The Yangtse River, the longest waterway in Asia and China's most important shipping route has been closed to navigation by the worst drought in 50 years that has left cargo ships stranded and 400,000 people without drinking water. Water levels have fallen as low as three metres in the main shipping lane of the 6,300 kilometre river and it is 50 metres narrower in key sections than it was last year. About 87,000 square kilometres of farmland have been damaged and some dams do not have enough water for optimal power generation.
BORDERS
The Danish government is reinstating guards along borders with Sweden and Germany and is conducting spot checks designed to fight crime and illegal immigration. Although the move falls short of full reinstatement of border controls, it is the latest in a series of small steps reversing hassle-free travel across European Union frontiers. Worries about illegal immigration have mainly been concentrated in Italy and France which have received the majority of a recent influx of 25,000 North African refugees. The two countries want the EU to change its rules to allow them to restore some border controls.
MUSIC
Since 1999, when the file sharing website Napster appeared, global sales of recorded music have collapsed from US$27.3-billion to $15.9-billion. But in some countries, buying music has persisted. Last year the Japanese and British spent the most on music, as a proportion of GDP. It was much lower in Italy and Spain where piracy is entrenched. The weakest markets were in emerging Asia. China, the world's second-biggest economy, is not even in the top 20 for music sales.
BRANDS
Apple has overtaken Google as the world's most valuable brand, ending a four-year reign by the Internet search leader, according to the latest annual study by global brands' agency Millward Brown. The iPhone and iPad maker's brand is now worth US$153.3-billion, up 84 per cent from 2010. Next is Google at $111.5-billion; IBM at $100.9-billion; McDonald's at $81-billion and Microsoft at $78-billion. The total value of the top 100 brands rose by 17 per cent to $2.4-trillion. Research in Motions's Blackberry was No.25 and the Royal Bank of Canada, number 39.
LEGO
After nearly going under eight years ago, Lego, the plastic brick maker, now has 5.9 per cent of the global toy market, up from 4.8 per cent at the end of 2009. That makes it the world's fourth-largest toy maker. It is doing especially well in the U.S. where sales last year surpassed US$1-billion for the first time. Worldwide sales in 2010 were up by 37 per cent to $2.8-billion.
RICE
Scientists have shed new light on the origins of rice, one of the most important staple foods. A study of the genome suggests that the crop was domesticated only once, around 8,200 years ago rather than at multiple times in different places and that the two sub-species, japonica and indica, split apart from each other about 3,900 years ago. This is consistent with archaeological evidence for rice domestication in China's Yangtze valley about 8,000 to 9,000 years ago and the domestication of rice in India's Ganges region about 4,000 years ago.
BLIMPS
The Goodyear Tire Co. plans a 21st century makeover for its fleet of iconic blimps. The company will team up with Zeppelin, a German company, to build three new blimps beginning in 2013. The first will go into operation in 2014. Each of Goodyear's three North American blimps will be replaced. They will be built by teams at Goodyear's airship hanger near Akron. Goodyear has been making airships since 1919 and Zeppelin since 1900.
CHEESE
For years, inferior cheese masquerading as the finest from Switzerland has snuck onto the shelves of stores around the world. However, cheese detectives are now on the case. Swiss experts are now scouring stores and cheese producers at home, throughout Europe and even North America, tracking down fakes of one of their most beloved varieties, Emmentaler, best know as Swiss cheese. When they find a suspicious block, they will ship it back to Switzerland for DNA testing. It is estimated that 3,000 tonnes, or 10 per cent, of Emmentaler is fake.
DEBT
Statistics Canada reports that about one-third of retired Canadians are in some form of debt and the median amount owed is C$19,000. The study shows that 34 per cent of retired individuals aged 55 or over, whether single or married, held mortgage or consumer debts in 2009. Among retired people with debt, 25 per cent owed less than $5,000, 32 per cent between $5,000 and $24,999, while 26 per cent owed between $25,000 and $99,999 and 17 per cent owed over $100,000. Retirees with debt had a median annual household income of $42,000 and a net worth of $295,000.
LAND MINES
Watermelons have been exploding by the score in eastern China after farmers gave them an overdose of growth chemicals creating what the media have called fields of "land mines." There have also been reports of "yard-long" beans resulting from the usage of these chemicals.
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
A surplus of supertankers competing to haul Middle East crude oil has swelled, hindering owners' chances of making charters to Asia profitable. There are now 18 per cent more very large crude carriers, or VLCCs, than there are likely cargoes. Returns from VLCCs on the industry's benchmark Saudi Arabia to Japan route have fallen around six per cent to US$4098 a day.
TURNOVER
According to Booz & Company consultants, 11.6 per cent of the world's 2,500 biggest publicly listed companies got new CEOs in 2010. The CEO turnover rate fell below 12 per cent for the first time since 2003 and was substantially lower than the 14.3 per cent rate in 2009. The highest turnover rate, at nearly 19 per cent, was in Japan but much of this was because of retirements. Companies in Brazil, India and Russia changed bosses nearly as often as the Japanese did. Nearly 30 per cent of CEOs who left office in those three countries were forced out.
EXPECTATIONS
Despite decades of apparent gains towards workplace equality, Canadian women starting careers still expect to earn considerably less than men and wait longer for promotions a sweeping new study has found. A review of 23,000 university students across Canada found that women expected an average initial salary 13.5 per cent lower than young men aiming for equivalent jobs. And women expected to wait an average of 12 per cent longer than men to get their first promotion. There was an average gap in expectations of 17.5 per cent after five years on the job in all types of work. The average initial salary expectation for women was C$40,421 compared to $46,727 for men.
BOOKS
Until now, Amazon Inc. has been a pusher of paper. But the Seattle-based company recently announced that it is now selling more e-books than books printed on paper. This has happened on a temporary basis in the past, for instance at Christmas, when Kindles were being given as gifts. But the company is now consistently selling 105 Kindle books for every 100 physical books, which suggests that the growth of digital books is now being sustained.
TRENDS
Booming lumber sales from British Columbia to China (in March sales tripled from a year ago) is creating its own transportation problems as lumber is piled up at west coast ports ready to be shipped to China. Now, four major BC producers have partnered to charter a ship for a year to give them more control over the movement of their products. Lumber and pulp fill about half of all containers exported from Vancouver which has strained the availability of containers. Seven round-trips are planned for this year which will bring a total of 175-million board feet of lumber to China, more than the total amount of wood BC shipped to China in 2005.
DEMOGRAPHY
According to the UN, the world's population will surpass 7-billion at the end of October, a few months earlier than had been expected. The global total will continue to rise slowly until 2100, when it will flatten out at 10.1-billion During the period of fastest growth, in the late 1980s, the world's population was rising by over 88-million a year. Now, annual growth is down to 75-million and by 2050 will be only 40-million. Today, Nigeria with 158-million people is the world's seventh largest country; by 2100 it will be the third largest with 730-million people.
CHONGQING
An explosion of manufacturing and construction activity draws as many as 500,000 new residents to this Chinese inland mountain city each year. The municipality of Chongqing covers an area the size of Switzerland with a population of 33-million. Since Chongqing's creation as a stand-alone economic zone in 1997, the gross domestic product has increased by 300 per cent; industrial output has risen 1,000 per cent and financial income has jumped by 1,460 per cent. The GDP growth target for the city for 2011 is 13.5 per cent, the highest of any other Chinese municipality.
ROADKILL
Globally, road accidents were the ninth leading cause of death in 2004, according to the World Health Organization (WHO), they could be the fifth by 2030, above HIV/AIDS and lung cancer. The WHO has now launched a "decade of road safety," with a plan to save 5-million lives and prevent 50-million serious injuries by 2020. Poor and middle income countries account for more than 90 per cent of road deaths but just 48 per cent of the world's registered vehicles.
OUTSOURCING
With the pay for factory workers soaring in many countries overseas, some companies are increasingly rethinking their manufacturing operations. Caterpillar, maker of heavy equipment, is moving some of its excavator production to Texas from abroad; Sauder, a U.S. furniture maker is moving production back to the States; NCR has returned production of cash machines to Georgia from low-wage countries and Wham-O has restored half of its Frisbee and Hula Hoop production to America from China and Mexico.
AID
Japan is set to make the traumatic leap from being one of the worlds's most generous aid donors to one of its biggest aid recipients as it begins the mammoth task of cleaning up the wreckage left by the March earthquake. According to the World bank, the total cost of the recovery will be US$235-billion which would make it the world's most expensive disaster. Until a few months ago, Japan was the world's fifth biggest aid donor, lending or giving away, $9.5-billion a year. The disaster has transformed it into a leading destination for charity.
INFRASTRUCTURE
The Democratic Republic of Congo has started a five-year, US$600-million renovation of rail lines in the southeast of the country to boost trade, lower prices and develop its mining industry. The project is being funded by the World Bank and the government, with $200-million coming from a minerals-for-infrastructure accord signed with China in 2009. The rehabilitation of 700 kilometres of track in the mineral-rich region will help boost the agriculture and mining industries, encourage the development of isolated communities and help fight poverty.
DROUGHT
The Yangtse River, the longest waterway in Asia and China's most important shipping route has been closed to navigation by the worst drought in 50 years that has left cargo ships stranded and 400,000 people without drinking water. Water levels have fallen as low as three metres in the main shipping lane of the 6,300 kilometre river and it is 50 metres narrower in key sections than it was last year. About 87,000 square kilometres of farmland have been damaged and some dams do not have enough water for optimal power generation.
BORDERS
The Danish government is reinstating guards along borders with Sweden and Germany and is conducting spot checks designed to fight crime and illegal immigration. Although the move falls short of full reinstatement of border controls, it is the latest in a series of small steps reversing hassle-free travel across European Union frontiers. Worries about illegal immigration have mainly been concentrated in Italy and France which have received the majority of a recent influx of 25,000 North African refugees. The two countries want the EU to change its rules to allow them to restore some border controls.
MUSIC
Since 1999, when the file sharing website Napster appeared, global sales of recorded music have collapsed from US$27.3-billion to $15.9-billion. But in some countries, buying music has persisted. Last year the Japanese and British spent the most on music, as a proportion of GDP. It was much lower in Italy and Spain where piracy is entrenched. The weakest markets were in emerging Asia. China, the world's second-biggest economy, is not even in the top 20 for music sales.
BRANDS
Apple has overtaken Google as the world's most valuable brand, ending a four-year reign by the Internet search leader, according to the latest annual study by global brands' agency Millward Brown. The iPhone and iPad maker's brand is now worth US$153.3-billion, up 84 per cent from 2010. Next is Google at $111.5-billion; IBM at $100.9-billion; McDonald's at $81-billion and Microsoft at $78-billion. The total value of the top 100 brands rose by 17 per cent to $2.4-trillion. Research in Motions's Blackberry was No.25 and the Royal Bank of Canada, number 39.
LEGO
After nearly going under eight years ago, Lego, the plastic brick maker, now has 5.9 per cent of the global toy market, up from 4.8 per cent at the end of 2009. That makes it the world's fourth-largest toy maker. It is doing especially well in the U.S. where sales last year surpassed US$1-billion for the first time. Worldwide sales in 2010 were up by 37 per cent to $2.8-billion.
RICE
Scientists have shed new light on the origins of rice, one of the most important staple foods. A study of the genome suggests that the crop was domesticated only once, around 8,200 years ago rather than at multiple times in different places and that the two sub-species, japonica and indica, split apart from each other about 3,900 years ago. This is consistent with archaeological evidence for rice domestication in China's Yangtze valley about 8,000 to 9,000 years ago and the domestication of rice in India's Ganges region about 4,000 years ago.
BLIMPS
The Goodyear Tire Co. plans a 21st century makeover for its fleet of iconic blimps. The company will team up with Zeppelin, a German company, to build three new blimps beginning in 2013. The first will go into operation in 2014. Each of Goodyear's three North American blimps will be replaced. They will be built by teams at Goodyear's airship hanger near Akron. Goodyear has been making airships since 1919 and Zeppelin since 1900.
CHEESE
For years, inferior cheese masquerading as the finest from Switzerland has snuck onto the shelves of stores around the world. However, cheese detectives are now on the case. Swiss experts are now scouring stores and cheese producers at home, throughout Europe and even North America, tracking down fakes of one of their most beloved varieties, Emmentaler, best know as Swiss cheese. When they find a suspicious block, they will ship it back to Switzerland for DNA testing. It is estimated that 3,000 tonnes, or 10 per cent, of Emmentaler is fake.
DEBT
Statistics Canada reports that about one-third of retired Canadians are in some form of debt and the median amount owed is C$19,000. The study shows that 34 per cent of retired individuals aged 55 or over, whether single or married, held mortgage or consumer debts in 2009. Among retired people with debt, 25 per cent owed less than $5,000, 32 per cent between $5,000 and $24,999, while 26 per cent owed between $25,000 and $99,999 and 17 per cent owed over $100,000. Retirees with debt had a median annual household income of $42,000 and a net worth of $295,000.
LAND MINES
Watermelons have been exploding by the score in eastern China after farmers gave them an overdose of growth chemicals creating what the media have called fields of "land mines." There have also been reports of "yard-long" beans resulting from the usage of these chemicals.
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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