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Nike Executive: ‘Nike is a Brand That is of China and For China’

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Nike

“Nike is a brand that is of China and for China” stated the company’s Chief executive John Donahoe. The comment was made during a call with Wall Street analysts about Nike’s latest earnings report and in response to a question about the competition of Chinese brands.

Donahoe made “a robust defense of the firm’s business in China after facing a consumer boycott there” reported the BBC. Nike has received backlash over doing business in Xinjiang, where millions of China’s Muslim minorities called Uyghurs reside.

The BBC notes “Uyghurs have been detained at camps where allegations of torture, forced labor and sexual abuse have emerged. China has denied these claims saying the camps are ‘re-education’ facilities aimed at lifting Uyghurs out of poverty.”

Donahoe said he remained confident that China would continue to be a fast-growing market for Nike as “we’ve always taken a long term view. We’ve been in China for over 40 years.” He added, “Phil [Knight] invested significant time and energy in China in the early days and today we’re the largest sports brand there.”

BBC reports of Nike being boycotted in China:

Several Western brands, including Nike and Swedish fashion retailer H&M, recently faced a backlash from Chinese shoppers after the firms expressed concerns about the alleged use of Uyghur forced labor in cotton production.

In March, a group of Western countries imposed sanctions on officials in China over rights abuses against the mostly Muslim Uyghur minority group.

The sanctions were introduced as a coordinated effort by the European Union, UK, US and Canada.

In December, the BBC published an investigation based on new research showing China was forcing hundreds of thousands of minorities including Uyghurs into manual labour in Xinjiang’s cotton fields.

Nonetheless, Nike’s fourth-quarter earnings showed revenues doubled to a better-than-expected $12.3 billion for the three months. “That helped it bounce back to a $1.5bn profit, from a $790m loss during the depths of the pandemic a year earlier” reports BBC.

“The figures also showed that revenue in China rose to more than $1.9bn, but missed Wall Street expectations of $2.2bn.” Donahue remains confident China will continue to be a fast-growing market for Nike.

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4 Comments

4 Comments

  1. WILLIAM FLYNN

    July 18, 2021 at 9:14 am

    NO REAL AMERICAN should be buying ANY NIKE product under ANY circumstances !

  2. Bill

    July 18, 2021 at 9:20 am

    I haven’t purchased Nike or watch a NBA game knowing these companies are so rooted in China just for the sake of cheap labor and profit. Bring these jobs back to the USA yet you don’t hear a peep out of Biden for reasons we all know.

  3. Frank

    July 18, 2021 at 2:52 pm

    The CCP can have Nike, MLB, NBA and the NFL

  4. Pamela Tassey

    July 18, 2021 at 5:26 pm

    I will not buy made in china goods or services, if these are offered by other sources. I think anything sold on the internet made in China should be stated in the ad at the top of the ad.

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Economy

New Research Suggests U.S. Already in a Recession That’s Only Getting Worse

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Recession

A Dartmouth professor warns not only has the United States slipped into a recession that is likely as bad as the 2008 financial meltdown, but that it is getting worse. David Blanchflower of Dartmouth, along with Alex Bryson, of University College London, “says that every slump since the 1980s has been foreshadowed by 10-point drops in consumer indices from the Conference Board and the University of Michigan” reports the Daily Mail.

The two professors authored a research paper released October 7 titled, “The Economics of Walking About and Predicting US Downturns” in which they state the dire prediction. “It seems to us that there is every likelihood that the US is entered recession at the end of 2021.”

In the paper’s ‘Abstract’ it states “the economic situation in 2021 is exceptional, however, since unprecedented direct government intervention in the labor market through furlough-type arrangements has enabled employment rates to recover quickly from the huge downturn in 2020.”

“However, downward movements in consumer expectations in the last six months suggest the economy in the United States is entering recession now (Autumn 2021) even though employment and wage growth figures suggest otherwise.”

In the introduction, the paper explains that “following the collective failure to predict the Great Recession of 2008 economists have redoubled their efforts to predict economic downturns.” This paper seeks “to see whether it is possible to predict turning points in the United States economy since the late 1970s using qualitative data for the United States from The Conference Board and the University of Michigan on consumer expectations.”

The research paper writes:

We identify four criteria to predict these recessions:
1.     Two out of three successive quarters of quarterly GDP growth are negative.
2.     There are two successive months of employment declines in the Current Population Survey (CPS) household-level data.
3.     The unemployment rate rises 0.3 percentage points in a single month.
4.     Either or both the two expectations measures we examine from The Conference Board and the University of Michigan fall by 10 points or more.

So, what is going on? The answer appears to lie in the exceptional nature of the COVID-induced shock to the economy. It has been both an economic shock and a health shock, and one with the potential to derail the economy again over the coming months. It seems likely that, in spite improvements in traditional labor market indicators, declining consumer expectations about the future of the economy are linked to COVID-related fears and anxieties. This is borne out by the survey by The Conference Board discussed above indicating a recent rise in the percent of workers – and especially women – worried about returning to the workplace for fear of contracting COVID- 19, a substantial increase from June 2021 when only 24% expressed this concern…

…We suspect that fears linked to COVID will continue to affect the real economy and lie behind consumer expectations about an imminent downturn in the economic situation. This is a bold call of course, and not consistent with consensus and only time will tell if we are right. However, equivalent falls in these data in 2007 were an early indicator of recession, missed at the time by policymakers and economists. There is a possibility of course, that these data are giving a false steer. However, missing the declines in these variables in 2007, as most policymakers and economists did, proved fatal. It is our hope such mistakes will not be repeated this time around. They missed it last time, hopefully, they won’t miss it this time. These qualitative data trends need to be taken seriously.

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Economy

Social Security Administration Announces 5.9% Benefits Increase for 2022 Amid Rising Inflation

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social security

On Wednesday the Social Security Administration announced some 70 million beneficiaries will be receiving a 5.9% increase in benefit checks beginning late December and January. The move is the “biggest cost-of-living adjustment (COLA) in 39 years” following “a burst in inflation as the economy struggles to shake off the drag of the coronavirus pandemic” reports the Associated Press.

Estimates released Wednesday suggest a roughly $92 per month increase for the average retired worker. “That marks an abrupt break from the long lull in inflation that saw cost-of-living adjustments averaging just 1.65% a year over the past 10 years,” writes the AP.

With the changes, an average Social Security payment could be around $1,657 per month, and a couple’s benefits could rise to $2,753 per month. The AP reports “the COLA affects household budgets for about 1 in 5 Americans. That includes Social Security recipients, disabled veterans and federal retirees, nearly 70 million people in all. For baby boomers who embarked on retirement within the past 15 years, it will be the biggest increase they’ve seen.”

However, the Washington Post reports that experts say millions of beneficiaries will see “much less” than a 6 percent increase due to Medicare Part B premiums, which are deducted from beneficiaries checks and tied to seniors’ income.

Roughly 64 million of those affected are Social Security beneficiaries, while 8 million are Supplemental Security Income beneficiaries and “some Americans receive both.” The increase is the “biggest since 1982 as the Social Security benefit increase has averaged about 1.7 percent over the last 10 years” writes National Review.

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