Welcome to the 213th edition of Trade War.
Chinese companies in the US are finding a less hospitable business environment. Fast-fashion retailer Shein’s hopes for a US IPO fade. And Washington’s tariffs likely to drive more Chinese manufacturers to Mexico.
The IMF upgrades China’s 2024 growth to 5% but warns that an aging population and slowing productivity will slow economy later. And Xi Jinping calls for more jobs for young people and migrant workers in a speech to Politburo.
China launches new $47.5 billion chip fund. The US is spending record sums to support its own semiconductors. BYD to offer hybrids that can drive 2,000 km. And the EU will be more welcoming to Chinese EVs than the US.
Notable/In depth
China’s industrial strategy is simultaneously successful and wasteful
Foreign internet influencers find a niche in China
And the Chinese web is increasingly purged of past content
Used to be a panda, now a skunk …
Chinese companies long welcomed in the U.S. are finding a less hospitable business environment as tensions flare between the two countries, says one auto parts maker that employs around 10,000 people in the U.S. and has supplied components for half of all American cars.
Wanxiang America, a subsidiary of Hangzhou-based Wangxiang Group, has seen three deals worth billions of dollars fail in the past few years because of concerns about national security, President Ni Pin, who has 30 years of experience working in the U.S., told Bloomberg News.
“Business partners don’t feel comfortable to deal with a company that has a Chinese background because they feel that sooner or later they’re going to have a government issue,” says Ni who is the son-in-law of Lu Guanqiu, the late founder of Wanxiang. “Major business opportunities were killed by those concerns.”
Some Chinese companies are trying to disguise their mainland affiliation by moving their headquarters to other countries, as fast-fashion retailer Shein did to Singapore several years ago.
“We used to be like a panda—no harm, very cute, can help people save money and create new jobs,” says Ni who is also chairman of the China General Chamber of Commerce Chicago. “Now, I hate to say this, we’re more like the skunk, and people don’t want to get too close.”
“For politicians, there’s no cost in using the China topic to achieve their own goals,” the Wangxiang America exec adds. “I compare the China topic to ketchup. It’s free, easy to get, and everybody can use it.”
Shein may abandon US IPO
When fast-fashion giant Shein filed last November for a U.S.-listing, many expected it would be a blockbuster offering. Now it is unclear whether it will ever happen.
Despite efforts to distance itself from U.S.-China tensions, including by moving its headquarters to Singapore, Shein has been unsuccessful. Latest reports suggest it may IPO in London instead.
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