Sieren's China: US-company - here to stay

Neither of the trade dispute, the Corona-crisis Trumps the threat to cancel the relations with China "simply" could deter U.S. companies to continue to rely o

Sieren's China: US-company - here to stay

Neither of the trade dispute, the Corona-crisis Trumps the threat to cancel the relations with China "simply" could deter U.S. companies to continue to rely on the Chinese growth market. 83 percent of the surveyed companies do not want to withdraw their companies from the people's Republic, according to a study by the American chamber of Commerce in China, which was conducted after the peak of the Corona-crisis.

Only nine per cent said they had taken steps for a departure. And, although trump had promised trade adviser Larry Kudlow to pay back US businesses, the relocation expenses, and countries like India and Indonesia already with the breaks for US companies as an Alternative to China in position. Several major US companies have increased in the past few weeks, their presence in China, even including the electric-car maker Tesla, which moved up with 11.065 copies of his "Model 3" sell in may One of the E-vehicle seller in China. Also its "Gigafactory" in Shanghai to expand Tesla at a rapid pace.

Adherence to the China-strategies

The auto industry is a good barometer for the American companies on their China strategies to capture: for example, Ford announced last week, from the directly accessible to company BYD-the largest electric vehicle manufacturer in the world, the batteries for the new Hybrid Plug-In vehicle supply to the Chinese market is to be sold. A car, the build, the Americans with a Chinese company - the state of operation of Changan Automobile. Until the end of 2021 Ford will launch more than 30 new or revised vehicle models in China on the market. Also, General Motors has announced a few days ago to want in the future "very closely" with the Fujian-based company CATL work together. The 2011-founded group that is currently building a mega-factory in Erfurt, it is now the largest battery manufacturers in the world.

But not only on the car market shows that the growth opportunities outweigh the risks, and geopolitical discord for most of the US companies. So the supermarket chains Costco and Walmart announced alongside the US oil group Exxon Mobil, the two largest retail corporations in the world-your China business in the midst of the pandemic to extend. Also, the US Fast-Food chain Popeyes has opened in mid-may, their first branch in China, 1,500 more are in the planning stage. Walmart wants to double its presence in China in the next five to seven years, with around 500 new stores also more than to.

The luck of this company is that the Chinese stick to Corona with their purchasing power anymore. In may, the consumption was almost at the previous year's level. And the growing Chinese middle class buys despite Trump still like American brands, which they associated with freedom, fun, and relaxed sophistication. At the opening of the first Popeyes and Coscto stores in Shanghai, the queues stretched far around the Block. Similarly, it could look like if the California leisure resort giant Universal Parks opened in the next year, as planned, his new 6.5 billion expensive theme Park in Beijing. Of the Shanghai Disneyland Park is already since a month open again.

"Made in China" more sought after in the USA

the other way around, the Americans buy to products through the "Made In China"component as cheap as they are. 2000 dollars for an iPhone "Made in Texas" would afford only the least. "According to the strategic benefits of the pandemic against China leads the global economic recovery. This is the reason why many are still active in China," said Alan Beebe, the President of the China-US chamber of Commerce. China's Minister of Commerce Zhong Shan is direct: "Smart companies will not give up the huge Chinese market." The same is also true for Hong Kong, where more than 1,300 US companies are active. According to a survey conducted by the local American Chamber of Commerce, 70 percent of local US companies have no plans to move.

last year, China alone contributed 33 percent to the growth of the world economy, the United States, eleven per cent. This has halved the proportion in the past 20 years. Beijing is doing His part to keep to its market for U.S. companies. Tesla got a loan in the amount of 563 million dollars from the state 'Industrial and Commercial Bank of China'. Also, Ford has supported the production again high and his delivery secure chains. Beijing would speak in this context of a "Win-Win"Situation. With the beginning of the year adopted by law, which aims to make foreign investment, a fair and intellectual property protection, China will show the US-corporations - and especially future technology-sectors that the Chinese market is open.

The pressure of competition rises

On the Chinese market and its 1.4 million potential customers, there is hardly a U.S. group will not, of course. Especially as the savings rate of Americans climbed in April to a record level of 33 percent and the high unemployment figures cause for concern. The company, China's market need more than ever. And you know that, If a US company withdraws, is likely to soon have a competitor in the gap. Example of Qualcomm: If the Californian chip manufacturer is not allowed to supply the Chinese telecommunications provider Huawei because of the US embargo, it means a short-term loss of market share and in the long term the loss of American dominance in semiconductor technology. And it is also clear: China will try after the crisis, more than Yes, to satisfy the domestic demand by domestic companies and the own innovative strength boost. This competitive pressure to bear US company.

Our columnist Frank Sieren has lived for over twenty years in Beijing.

author: Frank Sieren

*The post "Sieren's China: US-company - here to stay" published by Deutsche Welle. Contact with the executives here.

Deutsche Welle
Updated Date: 10 June 2020, 16:26

You need to login to comment.

Please register or login.

RELATED NEWS