The effect of the trade war on America Inc has been exaggerated
ago communist China officially opened its doors to America and its capitalist firms. Politics, once seemingly set aside for the purpose of commerce, has recently made a comeback. President Xi Jinping has stirred up nationalism as part of his effort to consolidate power—worryingly for American firms seen as insufficiently deferential to China’s line on Hong Kong among other sensitive political topics.
A third of respondents to a survey by the US China Business Council , a trade group, claim they have been subjected to “increased scrutiny from Chinese regulators as a result of bilateral trade tensions.” However, local governments with their own growth targets have been rolling out the red carpet this year, foreign executives say.
Previous nationalist backlashes stirred up by the Communist Party, for example against Lotte, a South Korean supermarket chain, and Toyota, a Japanese carmaker, led to no more than flash-in-the-pan boycotts. The basketball row, in contrast, is dragging on; the Rockets remain blacklisted in China, and by one reckoning have lost nearly $20m in sponsorship deals as a result.
Despite these complications, most American firms remain committed to the mainland. The latest survey by the American Chamber of Commerce in Beijing finds that China remains in the top three as a global investment destination for 62% of its members, up from 56% in 2016; 87% of member firms tell thethat they plan to keep doing business in China, roughly the same proportion as in recent years.
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