International Economics

Course Code-520

Course Instructor- Mr. Kaushik Prashad Pathak

Group Name- SYNERGY

The global economy's second sun

Presenter- Md. Main Uddin (ID-41838004)

China’s economy significantly showing an upward trend over the last few decades. Despite the recent
slowdown, China’s economy is still growing at almost three times the rate of the US – around 7% over the last
couple of years, compared to less than 2.5%. The two nations are on an even keel when it comes to exports.
However, the US has a trade deficit – it imports more than it exports – while China imports significantly less
than it exports, resulting in a trade surplus. From this article we are able to see the comparison of GDP with the
other region of the world; also we are able to see the impact of china on the other region of the world.

This article was published on 29th January 2019 in Financial Times special edition Alphaville and written by
Colby Smith.

Hydrogen power: China backs fuel cell technology

Henry Sanderson, Guangdong January 2, 2019

Presenter: Sohan Bin Anwar Siddique (ID- 41735003)
Synopsis

Currently China is world’s largest oil importer and account for half of world’s coal consumption. On the other
hand they are responsible for one third of global clean energy. For the last decade China has subsidized almost
$54.6 Bn on the electric car sector. Now China is doing the same for Fuel Cells. China has already started spent
$12.4 Bn in this sector in 2018. China targets to sell 1M Cars to be sold globally by 2030.

Possible Effects

For the last decade Fuel Cells are being considered as the main rival of Electric Vehicles (EV). However
China’s rush to this sector can be expensive gamble as EVs currently sitting on an advantageous position in
technical terms. But it’s true that both EV and Fuel Cells can significantly help in decarbonizing the
transportation fleet worldwide. China’s petroleum dependency will be drastically reduced possibly creating an
imbalance in the oil market. Some speculations say if China is successful in this race, hydrogen power will
replace petroleum and we just might see a completely new type of economy.
Wall street slumps as Apple share fall 9%
Presenter: Farhad Salahuddin (ID-41838017)

Apple share price had fallen in all major stock markets and lost more than 9% of their value on wall street. This
was the biggest one day share price drop of Apple in the last five years. Apple share price was being badly
affected by the weaker growth in sales mainly in china and company admitted revenue warning to its investors.
Revenue might be $84bn, not $91bn, which they forecasted before. Goldman Sachs predicted that this could be
getting worse and apple could be heading the same way as Nokia. Apple is the first company ever to reach a
trillion dollar market valuation in August, but after more than $60bn wiped off its market value, taking it back
below $700bn.

The reason behind the weaker growth in china was- the extra tariff on the US products imposed by the Chinese
government. Apple is the latest victim of the ongoing US- China trade war that has been going on since last one
year. Tit for tat of tariff between these two economic super powers has affected the share price of all he tech
giants, specially Apple. China is one of the main markets of iphone. Almost 15% of Apple’s revenue come from
china. Extra tariff on Apple’s product seriously threatening the company’s prospect in china.

Harley-Davidson sees $120m hit from tariffs this year

Ed Crooks in New York and Sarah Provan in London JANUARY 30, 2019

Presenter: Ahnaf Shahriar (ID-41838013)

New tariffs around the world helped wipe out profits at Harley-Davidson in the final quarter of last year and are
expected to cost it up to $120m this year, as the US motorcycle maker becomes one of the highest-profile
victims of escalating trade disputes. Harley faces tariffs of 25% in the EU and China and 10-25% on some of
the components it imports into the US. It reported disappointing fourth-quarter earnings and forecast lower than
expected shipments for 2019, sending its shares down 7% by midday in New York. Along with restructuring
costs of about $23m, its net income of just $495,000 for the quarter. Expected additional tariff costs on its
exports and imports to be approximately $100m-$120m this year, equivalent to about a fifth of the $531m net
income it reported for 2018.

Probable impact: The increasing tariff will affect Harley’s business a lot, so the American economy as a
whole. Price will rise for a certain period and it will be losing potential customer’s attention. They may divert to
alternative brands and consequently it will be losing its market share notably. Production will be hampered by
raw materials and quantity and GDP will be decreasing drastically. So this is a remarkable loss for foreign
earnings of America.