upamfva
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Posted: 7.11.2022 8:30:08
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Eyeing China, US Business Community Waits for Washington to Make Next Move
David Hoffman remembers a time when the interests of the U.S. business community carried great weight in Washington, especially regarding U.S. economic policy toward China. Hoffman, who formerly worked at PricewaterhouseCoopers, once led the firm’s technology and entertainment advisory practices in that country.To get more China finance news, you can visit shine news official website.
But sympathy for those interests disappeared during the administration of former President Donald Trump, Hoffman says. And it has not gotten any better under President Joe Biden.“Business is vilified by its China presence in all respects,” said Hoffman, now at The Conference Board, a global business and research think tank.
An annual survey released this week by the American Chamber of Commerce in China found China remains a “top global priority,” but that many businesses are not planning on any major investments there this year.
Geo-political challenges
Sino-U.S. relations continue to be strained and further exacerbated by China’s close ties with Russia and Beijing’s desire to stay neutral on the war in Ukraine.
Even before Russian troops entered Ukraine, U.S. regulators and lawmakers had been weighing policies aimed at curtailing business and investment between the two nations over a range of competitive, national security and human rights concerns. China’s crackdown on its own businesses has also affected U.S. investors and firms, some of which have pulled out of the country over the past year.
“One of the things I noticed about the difficulty American companies face is pleasing Beijing and Washington,” said Scott Kennedy, a senior adviser at the Center for Strategic and International Studies at a recent event.
The China market
For multinational corporations, there is still no substitute for being in China, which after the U.S., is the world’s second largest economy with 1.4 billion people. Despite the at-times hostile political rhetoric, China remains the U.S.’s largest trading partner.
During his administration, Trump accused China of not offering an even playing field for foreign businesses to compete. The result was a trade war in which the two countries imposed high tariffs on each other’s products.
While dialing down the rhetoric, the Biden administration has continued with Trump’s hard line. “Engagement,” Washington’s approach toward China for decades, has given way to harsher rhetoric of de-coupling or even punishing China, complain business community members.
In Washington, some recent China-focused legislation and proposals have the business community’s attention. They include a regulatory battle over Chinese companies listed on U.S. stock exchanges and proposals to review U.S. investments in Chinese companies.
At a recent Asia Society of Northern California event on the future of U.S.-China relations, some speakers said they were worried about measures emanating from Washington and Beijing that seem to be pulling apart business ties between the two nations.
Nicholas Borst, vice president and director of China research at Seafarer Capital Partners, argued that the U.S. business community should have a voice when it comes to U.S. policy toward China.“It’s one of the few areas between the U.S. and China where we can really get away from a lot of the zero-sum thinking, where China’s economic development doesn’t have to come at the expense of the U.S.,” he said.
Myron Brilliant, executive vice president at the U.S. Chamber of Commerce, told the gathering that Washington is going to tighten export controls and investment screenings.“The political environment in Washington is that one thing that unites the two parties is China and the threat of competition,” he said.
Washington is going to put pressure on U.S. companies “to divest a little bit, to bring back resources here, to invest domestically and think about our own national security in the lens of economic competitiveness, which puts at risk U.S. engagement over a long time in China,” he said.
Washington’s concerns
In Washington, where U.S. business focuses its considerable lobbying efforts, the consensus has shifted to a more aggressive stance toward the Chinese government because of the increasing role of the Chinese government, under President Xi Jinping, in taking over large parts of the economy, says one lawmaker.
“The development of state champions in key industry sectors should have been a warning signal to the businesses in the U.S. business community,” said Rep. Rick Larsen, a Democrat congressman from Washington state and chair of a bipartisan U.S. China Working Group.
“If there are individuals and companies or industries within the business community who feel aggrieved or not being listened to, the government they need to first look at is the government of Xi Jinping. The Chinese government policy has been very clear over the last decade plus about its direction — further regulation, further state involvement in the economy, in fact, not just state involvement but the state taking over large parts of the economy.”
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