Chinese firms in US affected by Trump’s rhetoric
A total of 36 percent of Chinese companies operating in the US said that their businesses are sus-taining losses due to the Trump administration’s anti-China approach and fractured relationship, a report by the China General Chamber of Commerce (CGCC) said.
CGCC member companies, regardless of industry category, have been affected to a certain extent by both the COVID-19 pandemic and the negative rhetoric regarding US-China relations, the re-port found.
One mechanism through which the pandemic has hurt Chinese companies is likely to be anti-China rhetoric and fraying ties between the two countries, the report said, with over 50 percent of the companies claiming that events have adversely affected their operations in US.
The survey found that 36 percent of the respondents had noticed specific losses.
The Trump administration has heightened anti-China rhetoric since the pandemic’s wild spread in the US and the Chinese government has repeatedly lodged protests against the US government’s rhetoric. However, Chinese analysts pointed out that the anti-China bid by the Trump administra-tion, from increasing tariffs to the expanded use of the review powers of the US committee for foreign investment in the US, to the relentless crackdown on Chinese tech firms in the absence of proof, won’t be temporary.
Zhang Monan, a chief research fellow of US studies with the China Center for International Eco-nomic Exchanges, said the rhetoric must be seen in the light of broader US attempts to conduct a decoupling in trade, investment, technology and finance. Chinese business interests in the US must come to the realization that the difficulties they face today are not temporary headwinds but a long-lasting reality, Zhang warned.
“To preempt the risks, companies that are determined to maintain their US undertakings should make contingency plans and build up their legal firewalls,” Zhang told the Global Times Tuesday, commenting on the CGCC report’s findings.
“Alternatively, companies could choose to cut their losses at an appropriate time, which would also be a reasonable outcome for Chinese companies in the US,” Zhang said, because the pan-demic’s impact on the US economy may last for up to three years.
Amid the economic onslaught of the COVID-19 pandemic, the US economy had its worst perfor-mance ever in the second quarter, with GDP falling a historic 32.9 percent.
Zhang said many industries may never return to the pre-virus level, and this will add to the pres-sure of maintaining business operations in the US.
According to the CGCC report, 44 percent of respondents intend to increase investment in other countries and regions, and 50 percent of companies having such intentions are considering other Asian countries, followed by European countries.
“Asian countries would be the growth highlight for the near term as a place for companies to di-versify their investment due to their relative effectiveness in putting the virus under control. Re-directing investment to Asia from the US would be a reasonable choice,” Zhang said.
A pregnant woman in a hazmat suit and a mask crosses a street in the Elmhurst neighborhood of Queens,in New York City. The city has sketched plans to resume some manufacturing and construction activity on May 15 in low COVID-19 risk parts of the state. Photo: AFP
