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Biweekly Global Business Newsletter Issue 115, Tuesday, August 20, 2024

Posted on Aug 19th, 2024 in Asia Pacific, Europe, India, Miscellaneous, Predictions and Trends, Professional Development, World Culture, World Economy | Comments Off

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Commentary about the 115^th Issue: Big tech is beginning to use more electricity than whole countries. How the world’s stock markets and the Magnificent 7 have changed in value over time. generative AI (gen AI) is here to stay, and its business potential is massive. Unexpectedly rapid declines in fertility suggest the population will peak this century. Country GDPs are growing…overall. China is now the world leader in coffee shops….really!!! US Retail Sales Chugging Along. Indonesian fishermen use AI to increase their catches. Starbucks replaces it CEO with a work from home CEO 1,000 miles away. ure hold for India? And Texas’ own Dickey’s Barbecue Pit is ‘hot’ in Lahore, Pakistan.

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Editor’s Note: This is the 115^th edition of our biweekly global business update newsletter that started in March 2020. Each edition takes 20-23 hours to create and publish. And we subscribe to ~30 paid information sources to bring this truly diverse, non-partisan global business trends newsletter to 4,600 subscribers around the world. Recently we considered making this a paid subscriber or ad supported newsletter to help recover some of the costs to bring you the latest global trends that can impact your business and even your lives. We chose to make this newsletter ad supported. You will see small ads in each edition for organizations that serve international businesses. We ask that our subscribers click on the ads or use the QR code to see what each of our carefully chosen advertisers can do to make doing global business easier.

Edited and curated by: William (Bill) Edwards, CEO & Global Advisor, Edwards Global Services, Inc. (EGS), Irvine, California, USA. Contact Bill with any questions, comments and we welcome contributions.

Bedwards@edwardsglobal.com, +1 949 375 1896

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The mission of this newsletter is to use trusted global and regional information sources plus our network of 20+ in-country Associates to update our global readers on key global and local trends that can impact the success of their businesses at home and abroad. We subscribe to about 40 international information sources to keep our readers up to date on the world’s business. Some of the information sources that we provide links to require a paid subscription for our readers to access.

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First, A Few Words of Wisdom From Others For These Times

“To succeed, work hard. Never give up and above all cherish a magnificent obsession.”, Walt Disney

“The best way to persuade people is with your ears.”, Dean Rusk, U.S. Secretary of State, 1961-1969

“Not everything that is faced can be changed, but nothing can be changed until it is faced.”, James Baldwin. Compliments of Linda DiMario

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Highlights in issue #115:

GDP Growth Projections for Key Economies (2024-2025)
Big Tech Uses More Electricity Than Entire Countries
What does the future hold for India?
The Surging Value of the Magnificent Seven (2000-2024)
The Fight Against Global Hunger – Is food insecurity a political issue, or an existential one?
The World’s Largest Stock Markets (1900 vs. 2023)
Brand Global News Section: Dickey’s Barbeque®, Popeyes®, Starbucks® anmd Tropical Smoothie®

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B2B Payments Platform For Global Businesses

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Interesting Data, Articles and Studies

“GDP Growth Projections for Key Economies (2024-2025) – In this graphic, we summarize the latest GDP growth projections from the International Monetary Fund (IMF), which are as of July 2024. The U.S. has been one of the strongest advanced economies since the COVID-19 pandemic, though the IMF believes growth will taper off in 2025. This will be due to slower job growth and tighter fiscal policy (less government spending and/or higher taxes). In Europe, the IMF believes GDP growth will bottom out in 2024, and pick up in 2025. Germany in particular has struggled due to weakness in the manufacturing sector.” Visual Capitalist and the IMF, August 14, 2024

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“The Fight Against Global Hunger – Is food insecurity a political issue, or an existential one? Last year, approximately 30 percent of the world’s population experienced moderate to severe food insecurity. This means some 2.3 billion people “compromised on the quality and quantity of their food” or simply could not eat for a day or more, according to the U.N. Food and Agriculture Organization. An additional 500 million people – that’s roughly 50 percent more than the population of the United States – could not afford nutritious food. Yet only a quarter of global development assistance is used to fund the fight against hunger. This raises the question of whether food insecurity is a social, economic and political problem or an existential one.”, Geopolitical Futures, August 7, 2024

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“Gen AI’s next inflection point: From employee experimentation to organizational transformation – After nearly two years of debate, the verdict is in: generative AI (gen AI) is here to stay, and its business potential is massive. We’ve already witnessed an exponential rate of gen-AI-related innovation, which promises to accelerate automation and enhance productivity, innovation, and the quality of work, as well as the employee and customer experience. The companies that fail to act and adapt now will likely struggle to catch up in the future. Despite all the buzz, most companies have yet to scratch the surface of gen AI’s promise. A recent McKinsey Global Survey reveals that employees are far ahead of their organizations in using gen AI,¹ as companies have been slow to adopt in ways that could realize gen AI’s trillion-dollar opportunity.”, McKinsey & Co., August 7, 2024

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“The World’s Largest Stock Markets (1900 vs. 2023) – Data for 1900 comes from the DMS Database, accessed via the UBS Global Investment Returns Yearbook 2024. Figures for 2023 are based on the FTSE Russell All-World Index Series Monthly Review (Dec 2023). Starting with 1900, we can see that the UK accounted for nearly one quarter of global market cap. Overall, European countries accounted for over 67% of global market cap in 1900. Looking at 2023’s data, we can see that much has changed since then.”, Visual Capitalist, DMS Database 2024 and FTSE Russell All-World Index Series Monthly Review, August 6, 2024

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“Tracking Changes in Global Demographics – Unexpectedly rapid declines in fertility suggest the population will peak this century. The latest edition of the U.N. World Population Prospects covers changes in demographic data after the COVID-19 pandemic. Life expectancy is rising, contributing to population growth, especially in developed countries. Despite falling fertility rates globally – down by one child per woman on average since 1990 – migration now plays a key role in sustaining population levels, particularly in developed regions. But while immigration helps the economy, it also risks social friction due to cultural clashes, forcing governments to balance the need for population growth with potential public resistance. Developed nations face tough decisions about supporting or limiting migration as other demographic solutions dwindle.”, Geopolitical Futures, August 16, 2024

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Global Supply Chain, Energy, Commodities, Inflation, Taxes & Trade Issues

“America’s Resilient Oil Drillers Pump Out Another Record……the U.S. Energy Information Administration (EIA) reported Thursday that domestic oil and gas producers set another new record high in oil production during the week ended August 4. U.S. producers pumped out an amazing 13.4 million barrels per day (bpd) for the week, an increase of 800,000 bpd from the same week a year ago. This latest record represents the highest level of oil ever produced by any nation on earth. For context, this weekly production record is more than 3 times the 3.794 million bpd the U.S. produced in September 2008, just 16 years ago, and more than double the volume produced in September 2012.”, Forbes, August 11, 2024

Editor’s Note: 50 years ago the USA had to import 6 million barrels a day mostly from the Middle East and Venezuela. Today, The U.S. is one of the top suppliers of crude oil globally, and its export levels are expected to remain strong due to the ongoing high production rates and relatively stable domestic demand.

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“A man, a plan, a canal, Panama – On top of the partial blockage of Suez Canal trade by attacks from the Houthi militants, the world’s other great artificial waterway, the Panama Canal, has also been suffering. In this case it’s been a drought, most likely related to climate change, which reduced water levels in the canal from last July onwards. The FT reported last week that the bulk carriers that transport low-value, time-insensitive commodities such as grain and liquefied natural gas are unlikely to return to the canal, even though higher rainfall should restore its carrying capacity in September. Having adjusted to longer journeys to Asia around the southern tip of Africa rather than through the canal, they’re not in a hurry to pay the high transit fees and face the risk of renewed disruption. (The Suez Canal LNG trade had already shifted to the Cape of Good Hope route thanks to the Houthis, of course.)”, The Financial Times, August 19, 2024

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“Big Tech Uses More Electricity Than Entire Countries – Big Tech’s AI dreams are coming with a big energy price tag—technology companies and their data centers are consuming more electricity than countries with many millions of people. We compare Google, Microsoft, Meta, and Apple’s 2023 electricity use against select countries. Data sourced from company reports and the U.S. Energy Information Administration (2022). Google and Microsoft both consume more electricity (24 TWh) than countries like Jordan (population: 11 million) and Ghana (34 million).”, Visual Capitalist, U.S. Energy Information Administration, World Bank, Microsoft, Google, Apple, Statista and Forbes.”, August 12, 2024

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Global & Regional Travel & Living

“Delta takes fast, free Wi-Fi international – Delta’s industry-leading Wi-Fi rollout is taking off internationally. Starting this summer, customers on select Viasat-equipped long-haul international flights can enjoy fast, free Wi-Fi presented by T-Mobile – bringing the airline one step closer to recognizing its goal of offering free Wi-Fi on its entire global fleet. Today, free, streaming-quality connectivity is available on nearly 700 aircraft – more than 90% of Delta’s domestic mainline fleet – and the airline expects the vast majority of customers will have access to the product by the end of the year.”, Delta News Hub, August 12, 2024

Editor’s Note: A year and a half ago if there was wi-fi available (and it worked!!!) on long hall international flights it was slow and US$35-60 per trip.

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Book Review

“High Performance Through Happy People” by Elaine Jobson explores the direct correlation between employee happiness and organizational success. Jobson argues that a thriving workplace culture, where employees feel valued and fulfilled, leads to increased productivity, innovation, and overall business performance. The book provides actionable insights for leaders on how to cultivate happiness within their teams, emphasizing the importance of trust, recognition, and empowerment. By focusing on employee well-being, organizations can achieve sustainable high performance. Jobson’s approach offers a compelling case for prioritizing happiness as a core business strategy.

Elaine Jobson is the CEO and Managing Director of the Australia-based Jetts Fitness® franchise. She was2017 Outstanding Business Woman of the Year and Jetts Fitness® is consistently ranked as one of the top places to work in Australia.

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Country & Regional Updates

Australia

“Generative AI: How will it affect the future of work in Australia? With between 79 and 98 percent of jobs in Australia predicted to be automated by 2030, enabling vast productivity gains, how will this change the nature of work? Generative AI (gen AI) will have different effects on different sectors; however, early adopters in any sector can drive positive change—at the company and employee level—not only in productivity but also in the quality of work. Top-down thinking will be critical for a tech strategy that delivers value and enables an organization to scale. But where will this leave the individual? There will be an increasing demand for people with technical skills, social-emotional competencies, critical thinking and complex problem-solving capabilities, and good interpersonal skills; basic digital literacy will be necessary for almost every job.”, McKinsey & Co., August 9, 2024

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“Westpac Profit Rises – Westpac’s profit edged higher as pressure on margins eased and mortgage lending grew faster than the wider industry, offsetting a fragile outlook for the nation’s economy. The RBA remains some way off easing monetary policy, Governor Michele Bullock told a parliamentary panel in Canberra on Friday, as inflation is proving persistent and will only return back to the target range late next year.”, Bloomberg, August

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China

“China is now the world leader in coffee shops – But the average Chinese person still guzzles much less than a typical American. Between 2010 and 2022 coffee consumption per person in China rose fourfold (see chart), according to the International Coffee Organisation, a group of producer and user countries. (China’s GDP per person doubled over the same period.) The average Chinese person still drinks a fraction of the amount of coffee guzzled by the typical American: 0.1kg per year compared with 4.7kg. But last year China surpassed America, becoming the country with the most branded coffee shops (places like Starbucks) in the world, as the World Coffee Portal, a research firm, reported. China is home to nearly 50,000 such outlets., The Economist, August 8, 2024

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“GM Cuts China Jobs as It Resets in World’s Biggest Car Market – Carmaker eyeing production capacity cuts, people familiar say Long-anticipated restructuring targets once-flush business. The reassessment represents a major shift in strategy for GM, which earned billions of dollars in China as recently as 2018. The automaker is pulling back as many foreign brands are struggling with a profusion of local competitors in the world’s largest car market, which is now facing massive overcapacity. The reset involves a shift to producing electric vehicles, focusing on more upscale models and importing premium vehicles, these people said. GM and its joint ventures in China employ more than 58,000 people, according to a GM website.”, Bloomberg, August 12, 2024

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Czech Republic

“Semiconductor Factory Reshapes Czech Region’s Industrial Past – In the Czech town of Roznov pod Radhostem, a $2 billion investment by a US company promises to create a tech hub and help modernize the country’s stagnating economy. It’s the biggest bet by a foreign company in the Czech Republic in three decades. Arizona-based ON Semiconductor, or Onsemi, is expanding an existing operation, where about 2,200 employees in the Eastern European country make 10 million chips a day for customers such as BMW, Mercedes-Benz, Siemens, Apple and Samsung Electronics. The planned investment will create 800 new jobs over the next seven years, Bloomberg’s Krystof Chamonikolas and Michal Kubala report on Tuesday.”, Bloomberg, August 13, 2024

Editor’s Note: I lived in Prague from 1999-2001 while being the COO of a U.S. franchise licensee for the Czech Republic, Hungary and Poland. 10 years out of communism the Czech people were very hard-working capitalists and still are.

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France

“Olympics Lift French Employment – Based on second-quarter data, however, the bump looks temporary. Employment levels in France have fluctuated significantly in 2024. In the first quarter, the private sector added 61,100 jobs, but in the second quarter, it lost 7,900 jobs. A likely contributing factor was a first-quarter surge in demand for workers during preparations for the Olympics. In another noteworthy development, the employment rate for those aged 50-64 – a group that faces heightened challenges in securing jobs – increased significantly. The key question now is whether these employment gains will persist after the Olympics, capitalizing on seasonal trends, or if they were merely temporary. The job losses in the second quarter suggest the need for caution in assessing the long-term impact of these jobs.”, Geopolitical Futures, August 9, 2024

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India

“What does the future hold for India? This may be India’s century. We look ahead at seven trends likely to shape the country for years to come—and help it achieve its development goals. India is a place of superlatives. It’s home to the world’s fifth-largest economy. Its population, at over 1.4 billion people, has surpassed China’s to become the largest in the world. And that population is young: at a median age of 27.6, Indians are on average more than ten years younger than the citizens of most other major economies. In 2024, India also held the world’s largest democratic elections, in which 642 million people cast their ballots., McKinsey & Co., July 3, 2024

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Indonesia

“Indonesian fishermen are using a government AI tool to find their daily catch – Unlike wealthier nations where startups and Big Tech take the lead on AI, an Indonesian government agency is leading the charge and focusing on practical applications. The NN Marlin application can locate the densest fishing grounds based on the sea surface temperature and the level of chlorophyll. The app uses machine learning to crunch satellite data and remote sensing to identify schools of fish within a certain radius. ‘Now, catching fish is much more certain and efficient,’ 42-year-old Dedi told Rest of World. ‘We are guaranteed to get fish every day, and the use of fuel is also more efficient.’”, RestOfWorld.org, August 9, 2024

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Japan

“Japan’s Economy Sees Consumption-Led Rebound in Tailwind for BOJ – Private spending rebounds, suggesting virtuous cycle emerging. Data create positive backdrop ahead of LDP leadership election. apan’s economy rebounded to growth in the second quarter on the back of an increase in private consumption, in a sign that a virtuous cycle long sought by the central bank linking rising incomes to increased spending may be starting to emerge. Gross domestic product expanded at an annualized pace of 3.1% in the three months through June versus the prior period, the Cabinet Office reported Thursday. The reading, which exceeded the 2.3% consensus estimate, came after the economy contracted by a revised 2.3% in the first quarter.”, Bloomberg, August 14, 2024

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United Kingdom

“Restaurant sector shakes off blues with return to growth – The number of outlets is rising again with three net new sites a week opening in first half of 2024. The fortunes of the casual dining sector, which suffered under the twin pressures of Covid and soaring inflation, have taken a turn for the better. The number of midmarket restaurants is up for the first time since the pandemic. According to Hospitality Market Monitor, the number of outlets had reached 6,696 when lockdown was imposed in March 2020. That had tumbled to 5,082 by June 2023, equivalent to more than one closure a day. Now there is a modest return to growth, with a 1.7 per cent increase in the number of casual dining venues in the past 12 months, an average of three net new sites a week in the first half of 2024. Hospitality Market Monitor suggests that the turnaround applies to the wider industry, with the number of licensed premises up by 0.5 per cent between March and June, comprising 462 net new openings, or five a day.”, The Times of London, August 19, 2024

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United States

“The Surging Value of the Magnificent Seven (2000-2024) – The Magnificent Seven are some of the largest companies in the U.S. stock market today, but things looked quite different back in 2000. At that time, Apple, Microsoft, Amazon, and Nvidia had a combined value of just $244 billion. Alphabet (Google) was still a private company, and Meta (Facebook) and Tesla weren’t even founded yet. In this visualization, creator Ehsan Soltani looks at the market capitalization of these prominent technology companies over the last few decades using data from CompaniesMarketCap.com as well as Yahoo Finance. As of July 2024, the Magnificent Seven companies are worth $15.4 trillion combined. The below table shows their market capitalization from 2000 to 2024 in billions of dollars.”, Visual Capitalist, CompaniesMarketCap, Yahoo Finance, August 14, 2024

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“US Retail Sales Chugging Along – Brisk July retail sales along with fewer applications for unemployment benefits underscored a US economy with staying power as inflationary pressures gradually subside. Across the Atlantic, the UK jobless rate fell and wage growth cooled, while euro-zone productivity dropped for a sixth straight quarter and job growth slowed. Meanwhile, foreign direct investment in China slumped on investor concerns about the economy. The value of retail sales increased in July by the most since early 2023 in a broad advance and firmer sales guidance by Walmart Inc., a barometer of growth, also indicated that shoppers are becoming more selective but are still spending.”, Bloomberg, August 17, 2024

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Bill Edwards and Keith Gerson Announce the Formation of The Franchise Consortium

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Brand & Franchising News

“Tropical Smoothie Eyes $610 Million Securitization – Whole-business deals are popular among franchise-heavy firms. Such transactions have surged this year in a hot ABS market. Tropical Smoothie Café is attempting to raise $610 million in its first-ever securitization, just two months after Blackstone Inc. funds acquired the drinks-and-food chain. The funds’ acquisition of Tropical Smoothie was valued at around $1.7 billion, according to a Kroll Bond Rating Agency pre-sale report for the securitization dated Monday. The chain has more than 1,400 locations, all but one franchised, according to Kroll, up nearly 500 since December 2020. Blackstone said when the deal closed that it planned to accelerate Tropical Smoothie’s national expansion. Revenue topped $1.3 billion for the year through March 2024 and same-store sales have climbed 12 consecutive years, Kroll’s report said.”, Bloomberg, August 12, 2023

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“Starbucks replaces CEO with Chipotle CEO after coming under activist investor pressure – Starbucks replaces CEO with Chipotle CEO after coming under activist investor pressure: Starbucks has hired Chipotle chief executive Brian Niccol to replace Laxman Narasimhan, who leaves the business with immediate effect. Niccol joined Chipotle as chief executive and a director in March 2018, and became chairman in March 2020. Before joining Chipotle, he served as chief executive of Taco Bell.”, Propel, August 13, 2024

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“M.U.M.B.O.s: Franchising’s New Heavyweights – In the franchise development world, not all prospective franchisees are alike. And in case you’ve been stranded on an island, the whale of all prospects for many franchisors is called a M.U.M.B.O. – a multi-unit, multi-brand operator. That’s code for well-capitalized, diversified, experienced and in need of very little hand-holding on the part of franchisors. These franchisees are savvy. They hire well. They employ strong teams. They know their way around an FDD(Franchise Disclosure Document). And best of all, they tend to execute on time to achieve strong track records and top accolades for the brands they champion.”, By Monica Feid, FranchiseWire, August 10, 2024.

Editor’s Note: Please also see “MUMBO-fication, Multi-branding grows across international borders” published in 2022 in ‘Franchise Update’ magazine by your Editor.

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“Protection of Intellectual Property in Franchise Systems – Intellectual property (IP) covers a wide range of information, such as trade marks, confidential information, the manuals, trade secrets, know how, business systems, company names, logos, symbols, insignia, email addresses, business know how, client lists and client information. Prior to issuing franchise agreements, the franchisor should register all trade marks that will be used in the system.”, Corporate LiveWire, Export Guide 2024, Compliments of Khushbu Sundarji, Stewart Germann Law Office, Auckland, New Zealand

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“Popeyes Fuels Growing Demand Across The World – The chicken chain’s international business now earns more than $1 billion in systemwide sales. Since RBI acquired the brand in March 2017, it has grown from more than 500 international restaurants generating roughly $300 million in annual system sales to nearly 1,300 restaurants and over $1 billion in systemwide sales. Same-store sales rose 19.4 percent in the second quarter. In 2019, Popeyes entered Spain with the help of a Burger King operator. Now there are close to 140 restaurants in the market, with clear runway for future development. In the U.K. and India, there are 50 stores each—achieved in less than three years. Popeyes sees more growth in those trade areas, as well as France, which has 16 units in about a year. The chain also recently debuted in New Zealand, and that restaurant is projected to earn $6 million in annual sales. That’s one of the strongest country debuts the brand has ever experienced.”, QSR magazine, August 9, 2024

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“Q&A: offer and sale of franchises in Japan – Franchising is very widespread in Japan. According to the data published by the Japan Franchise Association, for the period from April 2022 to March 2022, the number of chains operating in Japan stood at 1,282 with 249,316 stores and a total turnover of approximately ¥27 trillion. Among other sectors, convenience stores are particularly common in Japan, with a total of 57,451 outlets as at 2022…..franchisors whose businesses fall under the definition of a specified chain business are required to provide a written document that describes prescribed items and to explain the contents of the written documents prior to executing a franchise agreement with prospective franchisees.”, Lexology, July 4, 2024

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“The Dickey’s Barbecue Pit in Lahore Is Just the Latest Example of Pakistanis Embracing Texan Culture – Texas-style barbecue is very popular in the country better known for charcoal-grilled meats. But it’s been obsessed with all things Texas since the nineties. On a hot June afternoon, Mazhar Zaidi is sitting at one of the dining tables on the ground floor of Dickey’s Barbecue Pit in Lahore, Pakistan. The top floor has a few families and groups of friends occupying the tables, enjoying some of Dickey’s specialties, such as the brisket and the short ribs. Zaidi offers barbecue platters to the candidates he is interviewing to help market the Dallas-based franchise he brought to the food capital of Pakistan three years ago. Texas’ trademark pit-smoked barbecue is in stark contrast to the traditional tikka, meat grilled usually over coal, that Lahore is renowned for. Also, unlike Texas, the meat barbecued in Dickey’s Lahore outlet is predominantly beef, since pork, which is forbidden in Islam, isn’t consumed in the 97 percent, Muslim-majority country. The location also offers chicken and mutton.”, Texas Monthly, August 12, 2024

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Our Mission, Information Sources & Who We Are

Our biweekly global business update newsletter focuses on what is happening around the worldthat impacts new trends, health, consumer spending, business investment, the franchise sector, economic development, and travel. We daily monitor 30+ countries, 40+ international information sources and six business sectors to keep up with what is going on in this ever-changing business environment. And our GlobalTeam™ on the ground covering 25+ countries provide us with updates about what is actually happening in their specific countries. We do not get involved in or report on politics!

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William “Bill” Edwards: Global Advisor Is Uniquely Qualified to Steer Sr. Executives Successfully Through the Complex Waters of Going Global. With four decades of successful international business experience spanning virtually every corner of the world and many business sectors, Bill Edwards understands the global business landscape like no other. He has been a County Master Franchisee in five countries in Asia, Europe, and the Middle East; the Senior VP for a franchisor operating in 15 countries and a full-service consultant since 2001 taking 40+ franchisors global.

For a complimentary 30-minute consultation on how to take your business into new countries and make money doing it. For a complimentary call with Bill Edwards click on the QR code or contact Bill at bedwards@edwardsglobal.com and +1 949 375 1896

www.edwardsglobal.com

And download our latest chart ranking 40+ countries as places to do business, used by many companies for strategic planning, at this link:

Our latest GlobalVue™ 40 country ranking

Biweekly Global Business Newsletter Issue 114, Tuesday, August 6, 2024

Posted on Aug 5th, 2024 in Asia Pacific, Europe, India, Miscellaneous, Predictions and Trends, Professional Development, World Culture, World Economy | Comments Off

Commentary about the 114th Issue: Vistage CEO Confidence Index took a dip in Q2 2024 while U.S. consumer confidence was up in June. Three of every four employers globally reported difficulty finding the talent they need. The U.S. and Canada lead G7 country wage growth from 2020-2022. Singapore is the safest city in Asia. A Big Mac® costs US$5.69 in the U.S., US$8.17 in the Czech Republic and US$2.39 in Taiwan. U.S. importers are rushing goods in early ahead of shipping disruptions. 7 ways AI is changing business travel. A look at real GDP growth in European countries in 2023. Jamie Diamond says businesspeople need to travel more. The United Kingdom’s consumer inflation falls to 2%. And is Paris ready for Wingstop® restaurants?

Reports in this edition from Australia, Canada, China, Europe, Mexico, Turkey, the United Kingdom and the USA.

Bedwards@edwardsglobal.com, +1 949 375 1896

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First, A Few Words of Wisdom From Others For These Times

“The battleline between good and evil runs through the heart of every man.”, Alexander Solzhenitsyn

“For the only way in which a durable peace can be created is by worldwide restoration of economic activity and international trade.”, James Forrestal

“You must be the change you wish to see in the world.”, Mahatma Gandhi

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Highlights in issue #114:

Vistage Q2 2024 CEO Confidence Index Highlights
2024 Global Talent Shortage
JPMorgan CEO Jamie Dimon says travel is essential for business leaders
U.S. Importers Are Rushing Goods in Early Ahead of Shipping Disruptions
7 Ways AI Is Changing Business Travel
The 10 Busiest Ports in the World, by Cargo Traffic
This Asian City Was Crowned World’s Safest Destination For Travelers
Coal’s Asian Comeback
Is Paris ready for Wingstop?
Brand Global News Section: 7-11®, Carl’s Jr®, Guzman Y Gomez®, Luckin Coffee®, Taco Bell®, McDonalds® and Wingstop®

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Interesting Data, Articles and Studies

“Vistage Q2 2024 CEO Confidence Index Highlights – The Vistage Confidence Index provides a quarterly report on the outlook CEOs of SMB companies have about the economy, hiring, and profitability. CEO confidence takes a dip”, Vistage, August 2024

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“2024 Global Talent Shortage – Three of every four employers globally reported difficulty finding the talent they need, with the biggest impacts being felt in Japan. Employers in the Health Care and Life Sciences industry reported the most difficulty. IT & Data skills are the most challenging to find, regardless of industry and geography. Today, 75% of employers report difficultly in filling roles.”, The Manpower Group, July 31, 2024

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“Massive appropriation of labor from the Global South enables high consumption in rich countries – The high levels of consumption enjoyed by wealthy countries in the Global North are only possible because of mass appropriation of labor from the population of the Global South….. the Global North imported 906 billion hours of embodied labor from the South while exporting only 80 billion hours in return. In other words, for every hour of labor the Global South imports from the Global North, they must export 11 hours to “pay” for it. The wage value of this net-appropriated labor was equivalent to €16.9 trillion in 2021, in Northern prices. In other words, this is how much the appropriated labor would be worth if it was paid at prevailing Northern wages, with equal wages for equal work.”, Phys.org, July 29, 2024

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“WTO (World Trade Organization) Members Signal Progress on Draft E-Commerce Deal – Pact is designed to ban tariffs on fast-growing digital trade. List of participants doesn’t include India and South Africa. About half of the World Trade Organization’s members reached a preliminary deal on e-commerce to permanently ban tariffs on digital transactions that are zipping across borders at twice the growth rate of physical merchandise. Among the 91 participants were the US, China, Japan, the UK and the major economies of the European Union — although Washington also signaled a reluctance to fully endorse it.”, Bloomberg, July 27, 2024

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Global Supply Chain, Energy, Commodities, Inflation, Taxes & Trade Issues

“Wage Growth In G7 Countries – 2020-2022 – Average wage growth is a key sign of how well a country’s economy is doing. When wages rise, it typically signals that businesses are thriving and can afford to pay their employees more, which in turn boosts consumer spending and stimulates further economic growth. On the other hand, stagnant or declining wages can indicate economic challenges, such as high unemployment, low productivity, or weak business performance. This graph shows the average annual real wage growth for full-time workers of G7 countries from 2000 to 2022. The data comes from the OECD and is updated as of March 2024. Data is in U.S. dollars and adjusted for purchasing power parity (PPP), which equalizes the purchasing power of different currencies. Wages are adjusted for inflation to reflect 2021 prices.”, Visual Capitalist and OECD, July 15, 2024

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“The Price of a Big Mac Across the World – The Big Mac Index, created by The Economist in 1986, started out as a simple tool to make currency theory more digestible. Now, it’s a widely-known measure in popular economics to assess and compare currency valuations. In short, the Big Mac index compares the purchasing power parity (PPP) of currencies using the price of a Big Mac in the U.S. as the benchmark. It shows how much a Big Mac costs in various countries compared to the U.S., but it also works as a way to assess exchange rates. In this graphic, we visualize the price of a McDonald’s Big Mac in U.S. dollars between 13 different countries around the world, the eurozone, and the United States, using the latest January 2024 data from The Economist’s Big Mac Index dataset.”, The Economist, July 22, 2024

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“Coal’s Asian Comeback – Southeast Asia’s renewable energy potential is some of the greatest in the world. In bold pursuit of renewable energy, Vietnam is undertaking an unorthodox but promising green hydrogen strategy, Thailand’s Prime Minister has promised to explore the cutting edge of nuclear power, and the Philippines has received broad praise for its commitment to renewables and regional trend-setting. Indonesia and the Philippines, for example, are increasing their dependence on coal. The share of power generated by coal in both the Philippines and Indonesia both recently surpassed China, becoming some of the world’s most coal-dependent countries. According to the London-based think tank Ember, coal generation in the Philippines grew much faster than the rise in electricity demand in 2023 – coal generation grew by about 9.7%, while electricity demand grew by 4.6%. Both Indonesia and the Philippines reached over 61% coal generation.”, Forbes, July 28, 2024

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“U.S. Importers Are Rushing Goods in Early Ahead of Shipping Disruptions – The strategy comes as freight rates are rising and new tariffs are set to hit some goods from China. Import containers have been landing at American seaports in far bigger numbers than usual since the late spring, marking an early start to the annual peak shipping season leading into the fall. It also marks a big bet for importers who risk being stuck with excess inventories if consumers don’t pick up their spending. Paul Bingham, director of transportation consulting at S&P Global Market Intelligence, said U.S. retailers and manufacturers don’t want to risk lost sales, even though they are paying a steep price as shipping disruptions drive up container rates to levels not seen since the Covid pandemic. ‘A natural reaction of supply-chain managers in the face of potential further disruption, even though the rates are higher, has been to advance the shipping times,’ Bingham said. Supply-chain executives see warning signs flashing around the globe, from drought-triggered limitations at the Panama Canal to the threat of a strike by dockworkers at U.S. East Coast and Gulf Coast ports this fall.”, The Wall Street Journal, July 23, 2024

Editor’s Note: A TEU (twenty-foot equivalent unit) is a measure of volume in units of twenty-foot long shipping containers.

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“New Labor Unrest Hits U.S. Ports – The peak shipping season is getting underway with another threat of labor disruption at American ports. The union representing about 45,000 workers at ports from Maine to Texas and the seaport employers are in a standoff with no negotiations on the calendar and the current longshore contract due to expire in a little over two months. German port workers are considering a “final offer” from employers after staging several walkouts in recent weeks. (Maritime Executive). A vote at a Coventory warehouse to force Amazon to recognize a union for the first time in the U.K. fell just short of a majority. (Financial Times).”, The Wall Street Journal, July 2024

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“The 10 Busiest Ports in the World, by Cargo Traffic – In 2024, nine of the world’s 10 busiest ports are located in Asia, underscoring the eastward shift in global trade flows. Due to supply chain shifts and deeper integration, intraregional trade within Asia has grown significantly. In the 1990s, over 70% of Asian exports by value went beyond the region, with containers being shipped back mostly empty. By comparison, roughly 60% of exports in Asia are traded within the region today. As we can see, seven out of the 10 busiest ports in the world are located in China, illustrating its central role in global manufacturing and trade. Since 2009, the country has been the largest exporter of goods in the world.”, Visual Capitalist, July 26, 2024

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“In the U.S., the AI Revolution Could Create Localized Power Crunches – The growth of U.S. data centers will run into power availability issues and permitting bottlenecks, spurring more technology companies to secure access to electricity directly from renewable power generators, though any systemic risks to electrical grids will likely be localized. The ongoing surge of demand from data centers, as well as from the electrification of many sectors amid the energy transition and intermittent renewable energy sources, will aggravate the challenges for interconnection grids. Facing power availability and permitting bottlenecks risks, technology companies setting up large data centers will be increasingly creative in trying to buy on a long-term basis reliable renewable energy power, even if at a relatively high cost.”, Worldview Rane, July 26, 2024

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Global & Regional Travel & Living

“JPMorgan CEO Jamie Dimon says travel is essential for business leaders – Business travel, long a vital part of a CEO’s job, is rebounding to pre-pandemic norms despite the increased use of videoconferencing tools. And for good reason, says JPMorgan CEO Jamie Dimon, who admits he’s constantly on the road because executives must prioritize face-to-face interactions with their employees, customers, and clients. ‘Leaders have to get out. They have to get out all the time. They have to be curious; ask a million questions,’ he recently said on LinkedIn’s This is Working series. Corporate travel, according to Dimon, also allows leaders to identify and learn from competitors about their company’s market position, as well as client needs and criticisms. he CEO said he’s often amazed by how many leaders lack a realistic assessment of what’s going on beyond their limited scope in both the public and private sectors. This leads to the creation of poor policies.”, Fortune, July 29, 2024

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“7 Ways AI Is Changing Business Travel – Someday a computer-generated avatar may explain why you can’t fly business class to Dubai. In the meantime, travel management and travel tech companies are testing how to apply Gen AI to various parts of business travel. Travelport, a tech company that provides reservation software for travel agents, this month introduced a feature called the Content Curation Layer (CCL). This feature uses AI to improve travel searches by quickly sorting through billions of options to find the best matches for customers. Business travelers dread filing expense reports. When various tools sync, though, the process can be simpler. Tech integrations can enable suppliers, such as airlines and hotels, to send electronic receipts straight to the expense reports required by companies. Travelers can ideally just click to submit items via travel management software. Skift, July 26, 2024

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“This Asian City Was Crowned World’s Safest Destination For Travelers – According to a new Forbes Advisor survey, Singapore is the world’s safest tourist destination, a remarkable feat for the city-state. The comprehensive analysis evaluated 60 international destinations and placed Singapore at the top of the list, cementing its reputation as a secure location for global travelers. The research examined various safety parameters, including crime rates, healthcare quality, infrastructure, and risks related to natural disasters and digital security. It assigned safety rankings ranging from 0 to 100, with the safest cities earning the lowest scores. Singapore achieved a perfect score of 0 points in the study, indicating the lowest possible risk across all categories assessed.”, Travel & Noire, August 2, 2024

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Book Review

“Own the AI Revolution” by Neil Sahota and Michael Ashley is a guide for leveraging artificial intelligence to drive business growth and innovation. The book offers practical insights into integrating AI into various industries, emphasizing its potential to transform operations, enhance customer experiences, and create competitive advantages.

It includes real-world case studies, strategies for AI adoption, and discussions on ethical considerations and future trends. The authors aim to demystify AI, making it accessible for business leaders and entrepreneurs to harness its power effectively and responsibly in their organizations.

Editor’s Note: Neil Sahota was a keynote speaker at the May 23rd, 2024 Orange County World Trade Week conference in Irvine, California. Neil simpllfies AI for the audie

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Country & Regional Updates

Australia

“Small business confidence dips amid economic strain – Small businesses in Australia are feeling the pinch, with financial confidence significantly lagging behind their big business counterparts, according to CreditorWatch’s latest Business Sentiment Survey. The survey highlights the unique challenges faced by small businesses in the current economic climate. CreditorWatch’s survey results show that 82 per cent of decision-makers in large businesses feel confident about their financial health, rating it as ‘good’ or ‘very good’. This drops slightly to 76 per cent among medium-sized businesses but plummets to just 45 per cent among small businesses. This gap in financial sentiment highlights just how vulnerable small businesses are to the ups and downs of the economy.”, Australian Business Builders, July 30, 2024

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Canada

“American invasion: Why so many U.S. fast food chains are charging into Canada – Here are the chains making a run for the northern border and why they believe Canadians have a growing appetite for fast food. In relatively short order, Canada has become a hotbed for fast foodexpansion from the United States. Shake Shack opened its first Canadian location in Toronto last week, with plans for 34 more restaurants by 2035. Sandwich shops Jimmy John’s and Jersey Mike’s are also among the American chains with sights set on the Canadian market. The Canadian restaurant market is quite different than what Shake Shack is used to in the U.S., said Robert Carter, a food industry analyst with StratonHunter Group, in an interview held before Shake Shack revealed its first Toronto location. ‘They’re coming from a market that’s $800 billion in size to a market that’s $90 to $100 billion in size here in Canada,’ he said. ‘Too many times we’ll have a U.S. brand that’ll come into the market and think just because it’s a smaller market or they’re just close to the U.S., it’s going to be the same strategy or marketing plan, when in fact there’s nuances they’ll have to address.’”, The Financial Post, April 30, 2024

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China

“China’s non-financial debt growth slows with firms and households unwilling to leverage up – ‘China’s macro leverage ratio is now higher than other major economies, which is due to years of persistently weak price increase,’ the report published by the Beijing-based National Institute for Finance and Development said on Monday. ‘We need to crank up countercyclical adjustment to bring about inflation to counter the rising leverage trend, boost business confidence and tackle risks’. Growth of debt within China’s non-financial sectors fell to the lowest level in more than two decades in the second quarter as corporations and households remained reluctant to borrow, according to a Beijing-based think tank.”, South China Morning Post, July 23, 2024

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“China looks for new ways to boost spending on services, from senior care to tourism – China is pinning more hopes on the services sector to lift demand and breathe new life into the economy, with a raft of new measures to boost spending in areas ranging from tourism to care for the elderly. In a 20-point directive released on the weekend, the State Council, the country’s cabinet, said it would increase support for nursing care, consider extending visa-free policies to more countries, and encourage “low-altitude tourism” to spur spending on services, a sector that is growing faster than goods. In the first half of 2024, 14.64 million overseas visitors entered the country, roughly 2½ times the number for the same period last year, as authorities reinstated the 144-hour free transit visa to cover 54 countries and 37 entry points, according to the most recent official data. In addition, services related to basic home-based needs such as catering, elderly care, childcare and housekeeping should also be expanded, it said.”, South China Morning Post, August 4, 2024

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Europe

““Real GDP Growth Rate in European Countries – 2023 – The economic landscape in Europe during 2023 presented a fascinating mix of rapid growth and unexpected downturns, reflecting the continent’s complex and varied economies. In a surprising turn, Montenegro emerged as the fastest-growing economy in Europe in 2023. This small Balkan country’s gross domestic product (GDP) surged by 4.5%, outpacing other nations in the region. Montenegro’s growth was driven by a booming tourism sector, investments in infrastructure, and a strong rebound from the pandemic’s economic impacts. Turkey and Malta also posted impressive growth rates, with Turkey growing at 4% and Malta at 3.8%. Turkey’s economy benefited from robust export performance and a resilient domestic market, while Malta saw gains from its financial services sector and a recovering tourism industry. Estonia experienced the largest negative growth, with its economy shrinking by 2.3%. Germany, Europe’s largest economy, also faced challenges, experiencing slightly negative growth at -0.5%.”, Statista and World Bank, August 3, 2024

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Mexico

“Assessing Mexico’s Post-Election Economic Outlook – Mexican President-elect Claudia Sheinbaum’s pledge to pursue a constitutional reform that would overhaul the country’s judicial and institutional systems could diminish Mexico’s attractiveness as a destination for foreign investment at a time when the country stands to benefit from global supply chain restructuring. In recent weeks, president-elect Sheinbaun has promised to pass a wide-ranging constitutional reform that would affect labor rights, environmental issues, and independent government regulatory bodies, including the National Electoral Institute, among other agencies. Some of these proposals have heightened domestic and foreign investor concerns about Mexico’s institutional stability and predictability.”, Worldview Stratfor, August 1, 2024

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Turkey

“Corporate Turkey’s patience in economic reboot wanes – While a shift to a more rational strategy has support, the impact of moves to tame inflation are biting. Corporate Turkey is finally feeling the pinch of President Recep Tayyip Erdoğan’s radical departure from years of unconventional economic policies. Not everyone is happy with the new normal. The central bank, which is now run by former US Federal Reserve economist Fatih Karahan, has lifted its main interest rate from 8.5 per cent last June to 50 per cent in March. The mechanism for the transmission of monetary policy to the economy that was severed by the previous unorthodox measures appears now to be more functional, meaning once-easy financial conditions are tightening.”, The Financial Times, July 30, 2024

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United Kingdom

Economist Business Section – Britain’s headline annual rate of inflation stayed at 2% in June, slightly above analysts’ forecasts. Services inflation remained sticky at 5.7%. The figures caused some traders to reduce their bets that the Bank of England will cut interest rates in August.”, The Economist, July 18, 2024

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“Growth of UK economy upgraded but falls short of Labour’s target – Bank of England forecasts that GDP will expand by 1.25 per cent this year, while sterling and markets fell in response to the interest rate cut. Downward pressure on the pound was fuelled by the Bank of England’s monetary policy committee voting 5-4 in favour of reducing the UK base rate by 0.25 percentage points to 5 per cent from 5.25 per cent.

Andrew Bailey, the governor of the Bank, hinted that interest rates are unlikely to fall rapidly over the coming months. However, analysts doubted that assumption, intensifying the sterling sell-off.”, The Times of London, July 22, 2024

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United States

““(US) Consumer Confidence Jumps in June – Consumer confidence increased in June with households feeling more confident in their ability to make ends meet and more confident in the job market, according to the Numerator Consumer Sentiment Tracker. The report also showed an increased comfort with nonessential spending. The June Consumer Confidence Score was 57.1 (+0.3 vs. May), which is an average of how consumers feel about the job market, their household finances, and their spending comfort levels. 40% of consumers think it’s very or somewhat easy to find employment in the current job market. Meanwhile, 27% think it’s somewhat or very difficult. 49% of consumers say their household’s financial situation is currently good or very good. 41% of consumers are very or somewhat comfortable spending money on discretionary purchases right now. Consumers with spare cash say they’re putting it in savings (36.2%) and paying down debts (33.3%). 13.2% of consumers say they do not have any spare cash (-2.9 points vs. May).”, Franchising.com, August 2024

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Brand & Franchising News

““Carl’s Jr (Australia) franchisees set to meet with US parent – The parent of US burger chain Carl’s Jr is holding talks about directly licensing its brand to the 25 burger shops still trading in Australia, after the local master licensee and 24 restaurants entered voluntary administration. CJ’s QSR Group, which is the corporate entity that rules Carl’s Jr’s brand in Australia, appointed KPMG as voluntary administrators on Monday. A creditor meeting will be held next week and administrators said they will conduct an immediate sale process of the stores caught up in the administration. The move surprised other franchisees, said BKG Group’s Lindsay Brennan. The BKG Group…….opened Carl Jr’s first Australian store in Bateau Bay in 2016. It still owns two Carl Jr’s stores, Mr Brennan said.”, Australian Financial Review, July 30, 2024

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““Chicken chain Wingstop fires up sale of British operation – The trio of entrepreneurs behind the UK’s fastest-growing restaurant chain have hired Goldman Sachs to explore a sale after six years of rapid growth, Sky News learns. The sale is being launched as Wingstop prepares to launch its 50th outlet in the UK. It is aiming to have 57 sites open by the end of the year, with substantial room for further growth even in a market saturated by competitors. Sources said the company believed it could ultimately reach between 400 and 500 sites in Britain. Wingstop has also become one of the industry’s biggest employers in the UK, with a workforce of about 2,200 people.”, Sky News, August 3, 2024

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““Is Paris ready for Wingstop? – Piggybacking on the Olympics, the fast-casual chicken chain is opening a pop-up restaurant in the French capital, a teaser to what could become 200 restaurants in the country. Dallas-based chicken-wing slinger Wingstop will debut its Maison des Saveurs (that’s “House of Flavor” for the uncultured among us) in the heart of Paris, a pop-up restaurant tied to the opening of the Summer Olympics that also serves as an amuse bouche of sorts for the chain’s planned official entry into Paris later this year. The fast casual opened its first (and, so far, only) French location in 2019 in Toulon, more than 500 miles south of Paris. At that time, French franchisee Brescia Investissement SAS said it planned to open 75 Wingstops in France by 2029.”, Restaurant Business, July 24, 2024

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““We’re literally going to need a bigger burrito: can Guzman y Gomez crack the crowded US market? – The chain’s much-hyped expansion plan includes selling meatier burritos than in Australia for a lower price, but marketing Mexican-themed food in the Americas is a tough ask. When the Mexican-themed food chain Guzman y Gomez listed on the Australian stock market in June, its share price rocketed by more than one-third in a single day of trading, creating a $3bn company. One factor that won over investors was a pledge to aggressively expand in Australia and push deep into the lucrative US market.

GyG plans to increase the number of its Australian stories from less than 200 to more than 1,000, a figure chosen to rival McDonald’s, and build on its international network, which now includes four outlets in the Chicago area.”, The Guardian, August 2, 2024

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” “Competition differentiation in the (Mainland China) coffee market different approaches of Starbucks Luckin Coffee and Coodi – Luckin Coffee, Starbucks, and Kudi Coffee are the top three companies in terms of the number of coffee shops in China. Under the fierce market competition, each has chosen a different business path. Luckin Coffee’s revenue still exceeded that of Starbucks China, and Starbucks China’s operating profit margin was higher. While Starbucks cut its prices, Luckin Coffee also fell into the dilemma of price war. Luckin Coffee’s performance in the first quarter of this year turned from profit to loss, with a net loss of 71.42 million yuan, compared with a net profit of 564 million yuan in the same period last year. The drop in product prices did not bring an increase in transaction volume for Starbucks China. The financial report shows that during the reporting period, Starbucks China’s same-store sales fell by 14%. Kudi Coffee is positioned as a store opening platform, and its core lies in the conversion of store business. Kudi Coffee does not charge franchise fees, and the collection of service fees also adopts a gradient model.”, Economic Observor, August 2, 2024. English translation and article provided by Paul Jones, Jones & Company, Toronto

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““Taco Bell set to roll out automated drive-thru ordering at many restaurants – Taco Bell aims to complete its expansion by the end of the year. Taco Bell is set to add AI drive-thrus at many of its restaurants. it already has the system at eateries in 13 states. (Copyright 2019 The Associated Press. All rights reserved) Taco Bell is looking to roll out artificial technology at hundreds of drive-thrus across the country, parent company Yum! Brands announced Wednesday. Yum! Brands, which currently operates voice AI technology in over 100 Taco Bell drive-thrus across 13 states, aims to complete its expansion by the end of the year. The company said the rollout ‘is designed to enhance back-of-house operations for team members and elevate the order experience for consumers.’ The potential benefits, the company says, include easier workdays for employees, improved order accuracy, more consistent, friendly experience, reduced wait times and higher profit growth.”, The Independent, July 31, 2024

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“7-Eleven Philippines targets 450 new stores in two regions – 7-Eleven operator PSC (Philippine Seven Corp) is planning to open 450 new stores in Visayas and Mindanao as part of an aggressive expansion in the country. Since its establishment in the Philippines in 1984, the convenience store network has expanded to 3829 branches nationwide. 7-Eleven expects to reach its 4000th store milestone by the end of Q4 this year.”, Inside Retail (Australia), July 23, 2024

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Biweekly Global Business Newsletter Issue 113, Tuesday, July 23, 2024

Posted on Jul 22nd, 2024 in Asia Pacific, Europe, India, Miscellaneous, Predictions and Trends, Professional Development, World Culture, World Economy | Comments Off

Commentary about the 113th Issue: Average salaries in 30 countries. Regenerative AI and the world’s software market. Microsoft orders all China staff to use iPhones. U.S. fast food chains raise prices more then 50% in the last ten years. Canada set to be the fastest growing G7 country in 2025. How to stay healthy at 35,000 feet.Commentary about the 113th Issue: Average salaries in 30 countries. Regenerative AI and the world’s software market. Microsoft orders all China staff to use iPhones. U.S. fast food chains raise prices more than 50% in the last ten years.

How to stay healthy at 35,000 feet. Saudi Arabia allows first sale of alcohol (really!). U.S. must add 290 terawatt hours of electricity by 2030. Olive Garden® parent buys Chuy’s®. McDonald s plans to have more than 10,000 restaurants in mainland China by 2028. Fossil fuels made up 81% of global energy consumption in 2023. India projects growth of 6.5%-7% vs 8.2% last year. And the United States and China combine for a massive 43.2% share of the global economy.

Edited and curated by: William (Bill) Edwards, CEO & Global Advisor, Edwards Global Services, Inc. (EGS), Irvine, California, USA. Contact Bill with any questions, comments and contributions.

Bedwards@edwardsglobal.com, +1 949 375 1896

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First, A Few Words of Wisdom From Others For These Times

“Train people well enough so they can leave, treat them well enough so they don’t want to.”, Richard Branson, business magnate and founder of Virgin Group

“Get the right people. Then no matter what all else you might do wrong after that, the people will save you. That’s what management is all about.”, Tom DeMarco, software engineer

“Of all the things I’ve done, the most vital is coordinating the talents of those who work for us and pointing them toward a certain goal.”, Walt Disney

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Highlights in issue #113:

Average Annual Salaries by Country
Economic conditions outlook, June 2024
Microsoft Orders China Staff to Use iPhones for Work and Drop Android
Inflation Across U.S. Fast Food Chains (2014-2024)
Small Businesses Still Struggling
Staying Healthy at 35,000 Feet
Brand Global News Section: Chuy’s®, Dominos®, Herbalife®, McDonalds®, Olive Garden® and Sol Bowl®

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Interesting Data, Articles and Studies

“Software’s byte of the gen AI apple – Generative AI’s (gen AI’s) quick adoption over the past year suggests that the global software sector will undergo a major change, senior partner Jeremy Schneider and coauthors note. But based on a McKinsey survey of software leaders and executives, it is anticipated that gen AI will affect each software category to a different degree. Content creation is one of three areas expected to see a very high level of disruption, while system infrastructure is on the other end of the disruption spectrum. Overall, gen AI could spark almost $300 billion in new software spending over the next few years.”, McKinsey & Co., July 9, 2024

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“Economic conditions outlook, June 2024 – Executives’ views on the world economy remain more positive than negative, though they believe a recession is increasingly likely. In their own economies, concerns over unemployment are growing. So far in 2024, survey respondents seem more sanguine about the economy than they were for much of 2023. In our newest McKinsey Global Survey on economic conditions,¹ respondents tend to say that conditions in their countries and globally are improving rather than declining and will continue to improve in the months ahead. Yet they also foresee a few clouds gathering on the horizon.”, McKinsey & Co., June 27, 2024

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“Help wanted: Charting the challenge of tight labor markets in advanced economies – Labor markets in advanced economies today are among the tightest in two decades, not merely a pandemic-induced blip but rather a long-term trend that may continue as workforces age. Tightness means forgone economic output. We estimate that GDP in 2023 could have been 0.5 percent to 1.5 percent higher across these economies if employers had been able to fill their excess job vacancies. Companies and economies will need to boost productivity and find new ways to expand the workforce. Otherwise, they will struggle to exceed—or even match—the relatively muted economic growth of the past decade.”, McKinsey & Co., June 28, 2024

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“WORLD ECONOMIC OUTLOOK UPDATE – Global growth is projected to be in line with the April 2024 World Economic Outlook (WEO) forecast, at 3.2 percent in 2024 and 3.3 percent in 2025. However, varied momentum in activity at the turn of the year has somewhat narrowed the output divergence across economies as cyclical factors wane and activity becomes better aligned with its potential. Services price inflation is holding up progress on disinflation, which is complicating monetary policy normalization. Upside risks to inflation have thus increased, raising the prospect of higher-for-even-longer interest rates, in the context of escalating trade tensions and increased policy uncertainty. To manage these risks and preserve growth, the policy mix should be sequenced carefully to achieve price stability and replenish diminished buffers.”, International Monetary Fund, July 2024

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Global Supply Chain, Energy, Commodities, Inflation, Taxes & Trade Issues

“Average Annual Salaries by Country – There are many reasons for why salaries vary between countries: economic development, cost of living, labor laws, and a variety of other factors. Because of these variables, it can be difficult to gauge the general level of income around the world. With this in mind, we’ve visualized the average annual salaries of 30 OECD countries, adjusted for purchasing power parity (PPP). This means that the values listed have taken into account the differences in cost of living and inflation between countries. This data was sourced from the OECD (Organisation for Economic Co-operation and Development), an international organization that promotes policies to improve economic and social well-being. It has 38 member countries, though in this instance, data for all of them was not available.”, OECD & Visual Capitalist, July 17, 2024

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“The world population is projected to peak slightly earlier than in previous projections – The United Nations doesn’t only publish historical estimates of how population and demographic trends have changed in the past; it also makes projections for what the future might look like. To be clear, these are projections, not predictions of changes in the future. In its 2022 publication, the UN estimated that, in its medium scenario, the global population would peak in 2086 at around 10.4 billion people. This year’s edition brings this peak forward slightly to 2084, with the population topping at just under 10.3 billion.”. Our World In Data, July 11, 2024

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Global Supply Chain, Energy, Commodities, Inflation, Taxes & Trade Issues

“Inflation Across U.S. Fast Food Chains (2014-2024) – Fast food joints were once the go-to option for quick, cost-friendly meals, but now, they’re starting to pinch the budget.

Inflation has hit fast food chains hard in the past decade, with many restaurants seeing an average price increase on menu items of more than 50%. This graphic visualizes the average price increase of 10 core menu items from select American fast food chains, as well as the change in the consumer price index (U.S. city average) for food away from home, from 2014 to 2024.”, FianceBuzz and the Federal Reserve, July 12, 2024

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“Maersk says Red Sea shipping disruption having global effects – DENMARK’S AP Moller-Maersk said on Wednesday (Jul 17) that disruption to its container shipping via the Red Sea had extended beyond trade routes in the far east of Europe to its entire global network. Shipping groups have diverted vessels around Africa’s Cape of Good Hope since December to avoid attacks by Iran-aligned Houthi militants in the Red Sea, with the longer voyage times pushing freight rates higher. “Ports across Asia, including Singapore, Australia, and Shanghai, are experiencing delays as ships reroute and schedules are disrupted, caused by ripple effects from the Red Sea,” it said in a statement.”, The Business Times, July 17, 2024

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“2024 Statistical Review of World Energy – What Powered the World in 2023 – Fossil fuels continue to power the world. While a lot of spotlight in the energy industry is on the clean energy transition to renewable sources, fossil fuels continue to reign supreme when it comes to the world’s production and consumption of energy. Global production and consumption of coal, oil, and natural gas all increased in 2023, and as a result fossil fuels made up 81% of global energy consumption as shown above.”, Visual Capitalist & Energy Institute, July 2024

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Global & Regional Travel & Living

“Staying Healthy at 35,000 Feet – With the summer travel season in full swing, board-certified infectious disease physician Carl Abraham, M.D., assistant professor at the College of Osteopathic Medicine’s Jonesboro location (NYITCOM-Arkansas), arms passengers with information to stay healthy at 35,000 feet. Abraham notes that some people may be surprised about the risk of germ spread on most airplanes. ‘Disinfecting touched objects, like seatbelts or trays, won’t hurt, although airlines are supposed to make sure areas are cleaned thoroughly between flights,’ he adds. But, the real hotspot might be the airplane lavatory.”, New York Tech news, July 2, 2024

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Book Review – New Section

“The Fast Future Blur: Discover Transformative Interconnections Shaping the Future – Fast Future Blur provides invaluable insights and strategic frameworks to navigate the complexity of our current period of rapid and radical transformation (‘Fast Future’ phase). Focused on the interconnected nature of the evolution underway, the book serves as an eye-opener for business leaders, providing guidance in understanding this dynamic and complex landscape. Fast Future Blur delves into 12 key areas of change, including platform businesses, regenerative innovation, artificial intelligence, the future of healthcare, the future of work, the future of mobility, blockchain, metaverse, virtual & augmented reality, leadership, agility, fintech, and the impact from 6 inter-connections. With compelling, powerful, and timely insights from the Fast Future Executive faculty ― a global consortium of experts and industry leaders, many of whom are associated with the World Economic Forum, top business and technology schools and leading global companies.”, Amazon, July 2024

Editor’s Note: I attended a session of The Fast Future Blur 2024 Summit on June 11^th at the Executive Next Practices event at the University of California, Irvine, Beall Center for Innovation. We had 19 speakers from the Fast Future Executive faculty who came in from around the world. Wow!

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Book Review – New Section

Editor’s Note: I attended a session of The Fast Future Blur 2024 Summit on June 11^th at the Executive Next Practices event at the University of California, Irvine, Beall Center for Innovation. We had 19 speakers from the Fast Future Executive faculty who came in from around the world. Wow!

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Country & Regional Updates

Canada

“Canada set to be fastest growing economy in G7 in 2025, IMF forecasts – Latest outlook puts this country ahead of United States and United Kingdom. The IMF predicts the global economy is headed toward a “soft landing,” but warns risks remain for the inflation outlook, especially in advanced economies. ‘The good news is that, as headline shocks receded, inflation came down without a recession’, wrote Pierre-Olivier Gourinchas, economic counsellor and the director of research at the IMF, in a blog post accompanying the release. “The bad news is that energy and food price inflation are now almost back to pre-pandemic levels in many countries, while overall inflation is not.”, International Monetary Fund, July 2024

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China

“Microsoft Orders China Staff to Use iPhones for Work and Drop Android – Company will block corporate access from Android in China Microsoft has been tightening cybersecurity following attacks. Microsoft has been ramping up security worldwide after incurring repeat attacks from state-sponsored hackers. Microsoft Corp. told employees in China that starting in September they’ll only be able to use iPhones for work, effectively cutting off Android-powered devices from the workplace. The US company will soon require employees based there to use Apple Inc. devices to verify their identities when logging in, according to an internal memo reviewed by Bloomberg News.”, Bloomberg, July 8, 2024

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“Comparing the Economies of U.S. and China in 3 Key Metrics – Starting with GDP, we used 2024 estimates from the latest edition of the IMF’s World Economic Outlook (April 2024). Based on these figures, the United States and China combine for a massive 43.2% share of the global economy. It’s also interesting to note that America’s share of global GDP has actually been increasing in recent years, from a low of 21.1% in 2011. This is partly due to its relatively strong recovery from the COVID-19 pandemic. The U.S. dominates when it comes to stock market valuation, accounting for 61% of the global total as of Feb. 29, 2024.”, Visual Capitalist & International Monetary Fund, June 3, 2024

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India

“India Sets Subdued Economic Growth Forecast as Risks Mount – Government projects growth of 6.5%-7% vs 8.2% last year Finance minister to give annual budget speech on Tuesday. India’s government set a fairly conservative economic growth forecast for the current fiscal year, concerned about mounting global risks. The economy will likely expand 6.5%-7% in the year through March 2025, the Ministry of Finance said its Economic Survey report released Monday. That compares with 8.2% in the past financial year and the central bank’s projection of 7.2% for the current year. Modi must also balance demands from his coalition allies to spend billions of dollars in their states, with pressure from credit rating companies to curb government debt.”, Bloomberg, July 22, 2024

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Japan

“More than 40% of Japanese companies have no plan to make use of AI – The survey, conducted for Reuters by Nikkei Research, pitched a range of questions to 506 companies over July 3-12 with roughly 250 firms responding, on condition of anonymity. About 24% of respondents said they have already introduced AI in their businesses and 35% are planning to do so, while the remaining 41% have no such plans, illustrating varying degrees of embracing the technological innovation in corporate Japan. Asked for objectives when adopting AI in a question allowing multiple answers, 60% of respondents said they were trying to cope with a shortage of workers, while 53% aimed to cut labour costs and 36% cited acceleration in research and development.”, Reuter, July 17, 2024

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Saudi Arabia

“Saudi Arabia takes first step towards relaxing alcohol laws – Saudi Arabia has opened an off-licence in the diplomatic quarter of its capital, Riyadh, which is the kingdom’s first commercial outlet for the sale of alcohol beverages since a ban on the public sale and consumption of alcohol was imposed in 1952. We expect further relaxation of alcohol laws, together with the implementation of other social reforms and initiatives, in the years ahead as the government pushes ahead with its transformative Vision 2030 development plan, which includes the creation of a tourism offering that boasts major hotels, resorts, entertainment venues, sporting locations and (currently alcohol-free) restaurants and bars.”, Economist Intelligence Unit, February 23, 2024

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“One crucial piece of advise for business in Saudi – Landing that lucrative contract or big deal in Saudi Arabia requires much more than an impressive pitch deck and competitive pricing. One of the most crucial pieces of advice for doing business in the Kingdom is this: take the time to deeply understand the culture and build strong relationships before ever pitching your products or services. Why is this so important? Saudi Arabian culture places an extremely high value on personal connections, trust, and commitment. Saudis want to work with those they know and have established a bond with. Attempting to jump straight into business negotiations without first investing in relationship building is a surefire way to be met with skepticism and difficulty gaining traction.”, Middle East Sunday Pages by Corina Goetz, July 21, 2024

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Southeast Asia

“Southeast Asia’s economies continue to sustain their growth momentum in the first quarter 2024. GDP grew in all economies, with growth in Indonesia, Malaysia, the Philippines, and Singapore increasing during this period, while Thailand and Vietnam recorded slower growth. Southeast Asia’s economies continue to sustain their growth momentum in the first quarter 2024. GDP grew in all economies, with growth in Indonesia, Malaysia, the Philippines, and Singapore increasing during this period, while Thailand and Vietnam recorded slower growth.”, McKinsey & Co., June, 2024

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Turkey

This country has seen its wealth growth explode since 2008. It’s not the U.S. – Individual wealth has been soaring since 2008 in places some might find surprising, such as Turkey. That’s according to UBS’s 2024 Global Wealth Report, released on Wednesday. The report shows that globally, people have been getting progressively wealthier, with dramatic rises in some places. This chart shows average wealth growth from 2022 to 2023 in local currencies. On this metric, Turkey has surged above the rest at more than 157% (in dollar terms, that growth is 63%).”, MarketWatch, July 10, 2024

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United States

“U.S. will fall behind in the AI race without natural gas, Williams Companies CEO says – ‘The only way we’re going to be able to keep up with the kind of power demand and the electrification that’s already afoot is natural gas,’ Williams Companies CEO Alan Armstrong said in an interview Thursday. ‘If we deny ourselves that we’re going to fall behind in the AI race.’ The tech sector’s expansion of data centers to support AI and the adoption of electric vehicles is projected to add 290 terawatt hours of electricity demand by the end of the decade in the U.S., according to a recent report by the energy consulting firm Rystad. This load growth is equivalent to the entire electricity demand of Turkey, the world’s 18th largest economy.”, CNBC, July 19, 2024

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“Small Businesses Still Struggling – Small business (SMB) owners continue to face economic headwinds, including rent delinquency and revenue loss and stress around high interest rates and spiking labor costs. That’s according to Alignable’s June Revenue & Rent Report. The report was based on 3,690 responses to a poll of randomly selected small business owners in June. It also drew information from past survey responses. 72% of SMBs are earning less now monthly than pre-Covid, a slight increase from May’s 71%, breaking a 2024 record. Post-pandemic businesses are also struggling with 72% earning less than last year. Cumulative inflation—35% of SMB owners cite this as their top worry, up from 33% in May. Rising labor costs—79% of SMB employers are paying more for labor, up nine percentage points from May. Cash crisis—38% of SMBs have one month or less of cash on hand.”, Franchising.com, July 18, 2024

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Brand & Franchising News

“Olive Garden parent Darden Restaurants is buying Chuy’s for $605M – It will be the second acquisition for Darden in as many years and brings Mexican cuisine to its portfolio for the first time. Chuy’s has 101 restaurants and specializes in Tex-Mex cuisine. Darden Restaurants, the parent of Olive Garden, LongHorn Steakhouse and other casual-dining brands, is acquiring Chuy’s Tex-Mex for $605 million in cash, the company announced Wednesday. The 101-unit, Austin-based Chuy’s is known for its scratch-made Tex-Mex cuisine and the funky, eclectic atmosphere of its restaurants.”, Restaurant Business, July 17, 2024

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“China Isn’t Done Tormenting Nike or Starbucks – Global Brands Hit Local Competition. China has become a more challenging market for global consumer brands like Nike and Starbucks, and investors are beginning to rethink the value of their Chinese business, according to a new report from TD Cowen analysts. Chinese consumers still like global brands like Nike, Adidas, Skechers andLululemon, which each generate a midteen share of their sales from China. But investors are beginning to discount the cash flows that companies generate from China as domestic competition and geopolitical risks intensify, TD Cowen analyst John Kernan, who co-wrote the report, tells Barron’s. Shares of some of these companies have already taken a hit as China’s economic recovery has sputtered, making consumers reluctant to spend as the property market—a major store of household wealth—is still struggling.”, Barron’s, July 18, 2024

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“Aussie boxing franchise UBX to enter United Arab Emirates – Brisbane-based boxing franchise UBX has announced its eighth international expansion with 18 locations planned in the United Arab Emirates (UAE), adding to an existing 100-plus gyms globally and hot on the heels of its recent campaign launch “Boxing is for Everyone” with adidas.

The company has appointed Mohsan Bari as the master franchisor for UBX UAE with initial sites being sourced in Dubai and Abu Dhabi. ‘In recent years, the Middle East has become a hotspot for combat sports, and the UAE’s enthusiasm for boxing makes it the perfect next step for UBX as interest in the sport is followed by participation,’ says UBX co-founder and managing director Tim West.”, Business New Australia, July 17, 2024

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“Domino’s to shutter 100 stores – The board of Domino’s Pizza Enterprises (Australia) waited until after the market closed yesterday to announce store closures in two of its largest markets, Japan and France, which will almost entirely offset the net effect of planned store growth globally over the course of FY25.”, Business News Australia, July 18, 2024

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“Herbalife expects China to become its largest market – China is expected to double the size of Herbalife’s India market in about five years, which is currently its largest in terms of sales, Herbalife President Stephan Gratziani said in Shanghai. The United States-based nutrition product manufacturer is confident in the Chinese market given the growth potential in the country’s health and well-being sector. ‘In 5-7 years, China is expected to double the size of our India market, which is currently its largest market in terms of sales followed by the US and Mexico,’ Gratziani said in a recent interview. Currently, Herballife service providers operate about 3,200 community health-care and nutritional advisory clubs in China, and the number could grow significantly in the coming years given the potential, especially in lower tier cities.”, Shine, July 17, 2024. Compliments of Paul Jones, Jones & Co., Toronto

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“McDonald s plans to have more than 10,000 restaurants in mainland China by 2028 with more than 60 percent of employees born after 1995 – McDonald’s entered the Chinese mainland market in 1990. In 2017, McDonald’s China became McDonald’s largest international franchise market in the world, and CITIC Consortium became the controlling shareholder. Before the “Golden Arches” era, McDonald’s focused more on market development in first- and second-tier cities. Now, about 50% of McDonald’s restaurants are located in third-, fourth- and fifth-tier cities.”, Yicai, July 17, 2024

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“Piccolo Me parent plans 100 stores for Sol Bowl acquisition – Piccolo Me parent company FABE (Food and Beverage Enterprises) has added Sydney-based Sol Bowl to its portfolio of food brands. FABE has big goals for its newest addition: 100 stores, international expansion and co-branding with Piccolo Me. There are another five Sol Bowl sites planned for New South Wales and ACT before FABE takes the brand interstate. Sol Bowl founder Lilly Semaan launched the healthy-fast-food business as Soul Bowl in Parramatta in 2017. She has since refined the branding and added locations in Baulkham Hills and Rosehill.”, Inside Retail (Australia), July 17, 2024

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China and Global Supply Chain Update May 26, 2020

Posted on May 26th, 2020 in Asia Pacific | Comments Off

William (Bill) Edwards, CEO of Edwards Global Services, Inc. (EGS), has been doing business in China for 38 years, starting with living in China from late 1982 through mid 1985. He has been the Master Franchisee for a U.S. franchise in China. EGS opened an office in Beijing in 2014 and we are currently helping four U.S. brands enter the Mainland China market. Our U.S. Clients are all consumer-faced franchise brands.

The following are extracts from a variety of information sources and our network inside China. This is bipartisan and does not reflect a point of view.

“China may become one of many hubs as companies diversify manufacturing after coronavirus shock: The coronavirus is ‘a wake-up call for pretty much every company,’ said Gerry Mattios, expert vice president at Bain. ‘The number one item on the agenda is, “how do I build resilience in my supply chain?’ ‘China is still a very attractive total supply chain solution,’ said How Jit Lim, a managing director with consulting firm Alvarez & Marsal. ‘There are very few countries in the world where you can find almost everything you need to build something.’” CNBC, May 25, 2020

https://bit.ly/Chinamanyhubs

“Coronavirus won’t kill globalisation – but a shakeup is inevitable: Globalisation relies on complex links – global value chains (GVCs) – that connect producers across multiple countries. These producers often use highly specialised intermediate goods, or “inputs”, produced by only one distant, overseas supplier. COVID-19 has severely disrupted these links…..But GVCs follow the principle of efficiency. They are the result of businesses sourcing the best possible inputs to meet their production needs at the lowest cost – wherever those inputs come from. This is good news for globalisation’s survival. While efficiency remains the main target, businesses will continue to shop globally.”, The Conversation, May 23,2020

https://bit.ly/ConversationGVCs

“European Luxury Is More Chinese Than Ever: Designer labels will need to contemplate a wave of European store closures as they become more dependent on China for sales. Chinese luxury consumers, who are almost two decades younger and less indebted than their Western counterparts, can afford to spend a larger chunk of their disposable income on designer baubles. Already there are signs of what stock analysts are calling “revenge spending” as lockdowns lift in Chinese cities and shoppers head to the mall. Consulting firm Bain estimates that by 2025, up to 49% of global luxury sales will be made to Chinese shoppers, an increase from the consulting firm’s earlier forecast of 46%.”, Wall Street Journal, May 22, 2020

https://bit.ly/EuropeanLuxuryChina

“Business travel showing signs of life in China: While the Chinese hotel industry saw a significant performance increase during the Labour Day holiday to start May, some urban markets saw continued demand after the holiday, fueled by a modest return for business travel. Business transient was also strong enough to maintain performance levels following the holiday in Shanghai, with occupancies hovering in the 30% range. While better than performance seen so far in 2020, it still lags well behind what was seen in previous years. ‘For perspective, midweek this time of year in a normal year (occupancy) is about 90%,’ said Jesper Palmqvist, area director for the Asia/Pacific region for STR.”, Hotel News Now, May 20, 2020

https://bit.ly/3cWVpZL

Asia Biweekly Business Update Blog – 4/27/2020

Posted on Apr 27th, 2020 in Asia Pacific | Comments Off

(This is an update of our March 9, 2020 China Blog which now will cover Asia)

Bill Edwards, CEO of Edwards Global Services, Inc. (EGS), has been doing business in China for 45 years, including living in China, Hong Kong and Indonesia. EGS is currently helping U.S. brands enter Cambodia, Mainland China, Hong Kong, Indonesia, Korea, the Philippines and Thailand. Our U.S. Clients are all consumer-faced franchise brands.

The following are extracts from a variety of information sources and our Associates across Asia on consumer-focused issues during the COVID emergency.

Introduction

Mainland China and South Korea are seeing businesses starting to reopen. Singapore and Malaysia remain shut down. Indonesia and the Philippines are allowing restaurants to do takeaway and delivery only. Japan is mixed. Vietnam has done a good job controlling the virus and will soon allow businesses to reopen. Thailand will start reopening the week of May 4^th. Ramadan, which lasts until May 23^rd, is a challenge for businesses in Indonesia and Malaysia.

Asia General

“From coffee in Hong Kong to burgers in Malaysia and Ramadan in Singapore – here’s how Asia’s small businesses cope with Covid-19. Asia’s SMEs are rising to the challenges posed by the coronavirus by adapting their business models and focusing on the positives. Here are five case studies, taken from across the region, of how SMEs are adapting to the challenges posed by Covid-19 – and proving that even the smallest of businesses can have the biggest of hearts.” South China Morning Post, 4/25/2020

https://bit.ly/SMEsAsiaAdapt

“In Indonesia, the world’s most populous Muslim country, hundreds of millions are unable to congregate during the holy month of Ramadan. Muslims in neighbouring Singapore and Malaysia are also having a more solemn Ramadan as Covid-19 social distancing rules are enforced.” South China Morning Post, April 24, 2020

https://bit.ly/MelancholyRamadan

Mainland China

“Co-founder of Microsoft Bill Gates announced that stores of the company in China had resumed their operations that may be a concrete example of how society may return to ‘business as usual.’ Microsoft already sent thousands of its workers back to China, where they would resume their posts and comply with precautionary measures to prevent the spread of the pandemic.” Business Times, April 24^th, 2020

AmCham China has released the results of a second Flash Survey that evaluates the impact of the COVID-19 outbreak on its member companies. Almost 120 companies responded to the survey. Roughly half of the surveyed members say they are experiencing significant revenue declines, compared with 28% last month. 39% of companies report a drop in demand for their products, up 6 percentage points from last month. 60% (up 10 percentage points month-on-month) said 2020 revenues will decline anywhere between 10% and 50% or more if business cannot return to normal before August 30. Read the full AmCham China Quarterly report at this link:

https://bit.ly/AmChamChinaQuarterly

Indonesia

“Indonesia to ban air, sea travel to end-May: officials. Indonesia will temporarily ban domestic and international air and sea travel, with some exceptions, starting this week to prevent a further spread of the coronavirus, the transport ministry said in a statement on Friday. The announcement came as the holy month of Ramadan began in the world’s largest Muslim majority country, and the government has already banned citizens’ traditional annual exodus from the cities to the provinces during the holiday period.” Reuters, April 23, 2020

https://reut.rs/2Kxl0f4

“With most schools and universities in Jakarta (Indonesia) shut down even before official rules on social distancing went into effect, the transition has been sudden and uncertain for many. With Large Scale Physical Distancing extended in Jakarta until at least May 22, schools will continue to function online. AmCham (Indonesia) held a special forum on the situation on Thursday, April 23, to look at the challenges for schools, students and parents.” Learn more about the conference findings at this link:

https://bit.ly/AmChamIndonesiaSchools

Japan

“In recent weeks, the number of covid-19 cases has increased, and Prime Minister Shinzo Abe has called for an 80 percent reduction in person-to-person contact. Yet, some pachinko parlors refuse to close. Earlier this month, Tokyo Governor Yuriko Koike included pachinko parlors, along with bars and clubs, in the establishments she was requesting shut down to reduce the spread of the novel coronavirus. Many pachinko parlors followed the request, but some did not.” Kotaru, April 23, 2020. See pictures the lack of social distancing at this link:

https://bit.ly/JapanCOVID

“Japan’s new economic stimulus package in response to the coronavirus pandemic is estimated to boost real gross domestic product by about 4.4%, Economy Minister Yasutoshi Nishimura said on Friday. Japan has boosted its new economic stimulus package to a record $1.1 trillion to expand cash payouts to its citizens, as the fallout from the coronavirus pandemic threatens to push the world’s third-largest economy deeper into recession.: Reuters, April 23, 2020

https://bit.ly/JapanStimulus

Malaysia

Malaysia has one of the highest COVID cases and death counts in Asia. Essentially all business is closed. A major challenge for the Ramadan period.

“The (Malaysian) Prime Minister announced that the MCO (movement control order) which was first imposed on March 18 to 31 and later continued with a second phase from April 1 to 14, and a third phase from April 15 to 28 – would be on for a further two weeks. The government, said the Prime Minister, was considering allowing more specified sectors and sub-sectors to resume operations but subject to strict conditions to ensure the people’s health and safety.” The Star, April 23, 2020

https://bit.ly/MalaysiaShutDownExtended

Philippines

In the Philippines, the almost total business lock down is slightly easing. Some Chili’s® and Denny’s® restaurants have reopened for takeaway and delivery. But local sources say the Manila government has issued passes, only one selected member of each household is permitted to go out for food, groceries and to pharmacies.

“The coronavirus outbreak will likely send the Philippine economy into its first annual contraction in more than two decades this year, before it pulls back up for a U-shaped recovery in 2021, the central bank governor said on Saturday. Key cities in the Philippines, among the fastest growing economies in Asia during the pre-pandemic period, are under strict quarantine measures since mid-March. Philippine gross domestic product would likely shrink by 0.2% in 2020 before bouncing back to about 7.7% as policy support measures gain traction, central bank Governor Benjamin Diokno said in a statement.” Reuters, April 25, 2020

https://reut.rs/2VYkHzs

Singapore

Singapore has been under a partial lockdown since April 7 that may be extended past May 4 due to the recent jump in coronavirus cases in migrant workers. Many businesses, especially F&B, are suffering and may have to close for business due to the Covid-19 pandemic. The Singapore government has come out with a S$60 billion (US$40+ billion) budget to help businesses, employers, employees, & citizens.

South Korea

Churches, bars, gyms, restaurants are starting to reopen. Travel is not doing well. 400 McDonald’s are open for drive through. From 900 new COVID cases on February 29^th, there were 8 new cases on April 23^rd. “Amid the rapid changes caused by COVID-19, there is optimistic recovery progress of American businesses in Korea. Many companies are adapting quickly and finding success in unexpected ways amid these times of uncertainty.” James Kim, Chairman and CEO of AmCham Korea. This link is to a CNBC interview with Mr. Kim:

https://www.youtube.com/watch?v=0l3oVv2wJYo&t=2s

Early in the coronavirus timeline, Korea created an app that kept track of infected people. It prohibited large gatherings and required virtual church services. Key was wide spread testing. They even had an election.

https://bit.ly/KoreaElection

Thailand

AMCHAM Thailand had a Video Conference on April 22. Here are some of takeaways: The ban on sale of alcohol beverages has been extended until the end of the month (April 30) to discourage further social gatherings. All foreigners have been granted automatic visa extension for another 3 months until July 31. It is estimated that Thailand will end the year with just over 16 million international tourists, far below the 40 million goal. However, they have stated that tourism activities in Thailand could resume as early as May. AmCham Thailand members remain vastly positive toward the measures taken by the Thai government to curb the spread of Covid-19. See the full results are the link below:

https://bit.ly/AmChamThailand

Although the number of new COVID-19 cases in Thailand had a sharp drop to 15 cases on 26 April 2020, the state of emergency is extended another month to end on May 31, 2020. The Centre for Covid-19 Situation Administration (CCSA) issued the guideline of the preparation to reopen the businesses under the Covid-19 situation. High-risk business such as bars, pubs, entertainment venues will remain closed. Medium-risk business such as barber shops, spa, restaurants, department stores and shopping malls would be allowed to reopen gradually. All airports in Thailand are expected to resume their services on the 1st of May after they have closed temporary for a month.

The Thai Cabinet approved a stimulus package for soft loans to help businesses. For example, a 6-month debt moratorium on principal and interest for SMEs. “Seth” Sethaphong Phadungpisuth, CFE, Managing Director of Gnosis Company Limited, Thailand.

Vietnam

Sean Ngo, CEO of VF Franchise Consulting based in Ho Chi Minh City, reports on LinkedIn that Vietnam will be one of the first, if not the first country, in Southeast Asia to cautiously lift the lockdown. Social distancing, temperature checks at businesses, and better hygiene practices will not change. See the full US News report at the following link:

https://bit.ly/VietnamCovid

In Summary

We keep our thumb on pulse of the Asia business market, monitoring daily changes and trends, and have insight on how you can protect and grow your brand in this critical market. We will update this Asia business climate blog about every other week.

Feel free to reach out to Bill Edwards, CEO of Edwards Global Services, Inc., (EGS) to ask questions or share best practices at +1 949 375 1896 or bedwards@edwardsglobal.com.

“It is not the strongest or the most intelligent who will survive but those who can best manage change”. Darwin

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