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Message: <blockquote data-quote="Angel" data-source="post: 8607" data-attributes="member: 980">4. China joining e-commerce talks last-minute ([USER=157]@kitk[/USER])The story: In a last-minute move last week, China joined a group which has launched World Trade Organization (WTO) talks with an objective to negotiate trade rules for the global e-commerce market. The group is led by Singapore, Australia and Japan. It comprises of 76 WTO members, accounting for 90 per cent of global trade. Other key members of this group include the EU and the US.These talks intend to result in rules that would achieve, amongst other things, a reduction in cross-border hurdles to e-commerce, guaranteeing validity of e-contracts and e-signatures, banning duties on electronic transmissions and addressing forced data localisation requirements. These negotiations are to formally begin in March.Currently, there are no specific multilateral rules in the WTO regulating this e-commerce trade. A variety of rules agreed by countries in their bilateral or regional trade agreements are used in e-commerce.Impact on businesses and law firms: Due to their wide geographical and industrial scope, these prospective rules will likely seek to standardise and simplify the legal requirements that current apply to a great portion of cross-border trade. Presumably, multinational businesses that specialise in carrying out online retail transactions, like Amazon, will be most affected by these rules.It is important for law firms to monitor the developments of these talks. The rules that these talks can generate can potentially affect many areas of law like tax law, data protection law and international trade law.__________________________________________________________________________________________________________________________5. China's weakest growth in 2018 ([USER=980]@Angel[/USER])The Story:China’s growth in 2018 was its slowest in nearly three decades since 1990. This gave Donald Trump, the opportunity to pressurise the Chinese government to make a ‘Real Deal’ on trade with America. However, it is important to understand the reasons behind the decline before concluding what the slowing economy of the behemoth is signifying.Impact on businesses and law firms:Such headlines are undeniably correct but arguably, misleading. A closer look at the data would show why the Chinese leaders are less panicked than how Trump had portrayed to the world.  The following are some possible reasons why it is not as bad as it seems.i.  The sheer size of China’s economy <ul> <li data-xf-list-type="ul">Prior to 2018, China had been on a growth spurt. This led to a rapid expansion of its economy.</li> <li data-xf-list-type="ul">Thus, owing to the sheer size of its economy from the previous years, China is simply growing from a much larger base. When compared to its previous glorious years, China’s growth in 2018 is shadowed.</li> </ul> ii. China is making modest progress to clean up its financial systems<ul> <li data-xf-list-type="ul">With creeping, but increasing, debt-to-GDP levels for the past few years, the Chinese government had taken actions and implemented policies with an aim to deleverage.</li> <li data-xf-list-type="ul">Critics may argue that the Chinese government did not make any real progress based on empirical figures but, as pointed out by The Economist, the Chinese government’s real goal is actually stabilisation and not right-out deleveraging.</li> <li data-xf-list-type="ul">If so, then, there are positive progress because since 2015, the pace of China’s debt accumulation had slowed sharply.</li> </ul>iii. The nature of China’s growth is changing <ul> <li data-xf-list-type="ul">China’s focus on exports is undoubtedly affected by the trade war where American tariffs had led to a drop in China’s foreign sales.</li> <li data-xf-list-type="ul">However, with a growing domestic demand, this point must be considered against the fact that export orders matter less to China than they used to.</li> <li data-xf-list-type="ul">Have a look at the chart from The Economist and you will see that consumption (domestic demand) had more than plugged the shortfall by net exports.</li> </ul> <img src="https://www.thecorporatelawacademy.com/wp-content/uploads/2019/01/Screenshot-2019-01-29-at-07.39.13-e1548930679807.png" alt="" class="fr-fic fr-dii fr-draggable " style="" /><img src="https://www.thecorporatelawacademy.com/forum/attachments/screenshot-2019-01-29-at-07-39-13-png.655/?temp_hash=a4e06ed4c5d15456812cd6dd3cab064f" alt="" class="fr-fic fr-dii fr-draggable " style="" />Final thoughts:While it is important to look beyond headlines to understand what is really going on, it does not mean that speculators or the market players are necessarily optimistic about China’s growth in 2019 either. With increasing redundancy rates and incomes growing more slowly, consumption growth does look less promising in 2019 than in 2018.Taken together with the falling sales of mobile phones and cars (for the first time in two decades), what do you think is the outlook for China’s growth in 2019? Do you think that Trump is genuinely believing that the Chinese economy is at a decline and if so, is he overestimating the strength of America’s hand? More importantly, how will investors perceive this? Perhaps, what is certain is that law firms with clients doing businesses in these countries would be concerned about how these regulations and economic prospects will affect their businesses and lawyers will need to be armed with answers!__________________________________________________________________________________________________________________________That’s all for this week’s commercial news update. We hope you found it useful.  Let us know what you think or if there are any topics that you would like us to cover. Have a great week ahead! </blockquote>

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