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Under the wave of globalization, the economic interaction between China and the United States has become more frequent, and the core of this interaction is reflected in the trade and investment activities between the two sides.
Among them, United States' investment in China is particularly eye-catching, and it is reported that there are more than 70,000 United States enterprises in China, with a total investment of more than one trillion dollars.
The economic interaction between China and the United States is not just an economic act, it also carries the strategic considerations and long-term goals of both sides. Especially in the current context, the economic relationship between China and the United States has gone beyond mere trade and investment.
But does this apparent prosperity really reflect the true face of the U.S.-China relationship? Are the economic ties between China and the United States really as impregnable as they are portrayed? What about China in the United States?
1. United States companies investing in China
According to incomplete statistics, the number of companies set up in China in United States is as high as 73,000, and the total investment has exceeded 1.2 trillion US dollars. It has become the largest number of foreign-funded enterprises in China, penetrating almost every industry.
Among these industries, the most prominent ones are high-tech fields, such as mobile phones, automobiles, aircraft, etc.; Take the Apple phone, for example, despite its relatively high price.
However, because of the smoothness of Apple's IOS system and the uniqueness of its appearance, it has been loved by many Chinese young people, especially after Apple's release, which is basically China's leading consumer in the world.
The other is Tesla, which not only breaks the long-standing practice that foreign-funded enterprises must jointly venture with local Chinese enterprises, but also subverts the traditional joint venture model.
You must know that the Shanghai Municipal Government's love for Tesla can almost be described as favoring. It not only provides precious land resources, but also provides it with a variety of tax incentives, a series of preferential policies. The support of these policies has greatly reduced the operating costs of Tesla.
With the release of Tesla, its sales have also ushered in explosive growth, and it can be said that the Chinese market has directly revitalized Tesla.
In addition, there are the most familiar and eat a lot of fast food restaurants such as KFC, McDonald's, Pizza Hut, etc., specializing in hamburgers, french fries, fried chicken nuggets and other foods.
Similar to KFC is Starbucks, although it is not cheap, it is very popular among young Chinese people, and it has penetrated all corners of China. The reason why Starbucks has been able to achieve such a successful effect in China is mainly due to China's open-door policy.
Of course, when we delve into the reasons why U.S. companies choose to invest in China, we find that one important factor that cannot be ignored is China's compelling potential market.
In addition, China, as the world's most populous country, has abundant labor resources, which also provides great attraction for United States entrepreneurs.
This abundant labor resource not only means that the production cost is relatively low, but also means that there is great potential for development in many fields such as manufacturing and service industries.
Therefore, whether from the perspective of market expansion, or from the perspective of cost control and efficiency improvement, these are important factors that cannot be ignored in the decision-making of US companies investing in China.
For China in the early days of reform and opening up, by setting up production bases in China, American companies could not only get China's policy support at that time, but also reduce production costs and improve competitiveness.
However, this process has also been accompanied by a series of far-reaching effects, with United States companies not only bringing cutting-edge technology and management experience, but also greatly promoting China's industrial upgrading through their strong brand influence.
These United States companies are really blooming everywhere in China, and at the same time, they have created a large number of jobs for China, promoted rapid economic growth, and made them earn a lot of money in China!
Despite the great success of United States companies investing in China, what about Chinese companies investing in the United States, and will they be as successful as United States companies are in China?
2. Chinese investment in the United States
According to reports, by the end of 2023, there are nearly 5,700 Chinese companies in the United States, with total assets of more than $150 billion.
In fact, compared with United States companies investing in China, the history of Chinese companies investing in the United States is relatively short, in fact, this is also due to the special national conditions of the mainland.
We all know that the mainland experienced many years of war during the founding of the People's Republic of China, and it is basically difficult for those old enterprises to be retained to this day, which also leads to the short development time of our country's companies.
Although since 2000, Chinese companies have been investing in United States year by year, especially after the 2008 financial crisis, Chinese companies have increased their investment in the United States.
But according to statistics, these investments are mainly concentrated in high-tech, real estate, finance, energy and other fields, for example, technology companies such as Huawei and ZTE have set up R&D centers and branches in United States, while Wanda Group has a large number of real estate in Hollywood and New York.
In other words, China's investment in United States is not even a fraction of United States's investment in China, but United States's reaction to this is still so sensitive, and it is about to engage in a Sino-US trade war at every turn to suppress China's development.
However, since 2017, China has begun to crack down on high leverage and tighten capital controls, resulting in a year-on-year decline in China's outbound investment. As a result, United States investment was particularly severely affected during the same period, and United States policy and political decision-making were also changing.
The environment in which Chinese companies invest in the United States has become more hostile, further exacerbating the downward trend in Chinese investment in the United States.
In particular, in the current international political and economic environment, Huawei and ZTE, two Chinese technology giants, have encountered unprecedented challenges in the United States market.
The United States government added Huawei to the Entity List on the grounds of so-called "national security threats," a move that essentially cut off Huawei's access to key technologies and components from United States companies.
Similarly, ZTE was severely punished by the United States in 2018 and once faced the dilemma of not being able to purchase necessary components from United States companies, a series of measures that almost pushed ZTE to the brink of bankruptcy.
Although the two sides eventually reached a settlement, ZTE had to pay a hefty fine and accept a monitoring team sent by the United States. This incident has seriously affected ZTE's global business layout and market confidence, and the cases of Huawei and ZTE are only the tip of the iceberg of the difficulties encountered by many Chinese companies in United States.
It is important to know that the United States government has frequently imposed financial sanctions on Chinese companies under the pretext of "national security" to restrict their financing channels in United States, which has further exacerbated the difficulty of these companies to operate in United States.
In addition, the United States government has taken a series of measures to restrict the activities of Chinese companies in its domestic United States market, notably including the ban on TikTok, which forced the company to consider selling its business to domestic United States companies.
This practice is not limited to TikTok. In fact, from the Trump administration to the Biden administration, United States' crackdowns and sanctions on Chinese companies have become more frequent and severe.
These actions are not limited to the field of technology, but also extend to many fields such as finance and trade. Against this backdrop, the investment environment for Chinese companies in United States is becoming more and more complex and severe.
Although Chinese companies have contributed huge jobs and capital investment to the United States economy, the intervention of political factors has made the normal operation and development of these enterprises unprecedentedly challenged.
Third, how does China face the United States' suppression of Chinese companies?
Therefore, in the current international political and economic landscape, in order to cope with the suppression of United States, China must adopt a more active strategy and deepen strategic cooperation with various regions of the world.
In particular, economic partnerships with Europe, Asia and Africa. By building a broad multilateral framework for cooperation, China can effectively diversify potential economic risks and reduce over-reliance on specific markets.
In addition, China should participate more actively in international organizations, such as the United Nations and the World Trade Organization, to demonstrate its image as a responsible major country through these platforms, and to win broad support and understanding from the international community.
In addition, China can further expand its international influence through diplomatic channels. At the same time, it can consolidate and develop its international cooperation network so that it can play a more critical and constructive role in global affairs.
The implementation of this strategy will not only help China safeguard its own interests in the international arena, but also promote the stability and development of the global economy and achieve a new situation of win-win international cooperation.
At the same time, Chinese companies need to increase investment in scientific research and improve their independent innovation capabilities to reduce their dependence on United States technology. Support R&D in the high-tech field and encourage enterprises to carry out technological innovation.
Of course, before that, Chinese enterprises also need to establish a complete set of risk assessment and response mechanisms to ensure that they can effectively avoid and respond to various potential risks in overseas investment and operation, and avoid the occurrence of various risks.
Finally, in the face of United States public opinion attacks and smears, Chinese enterprises also need to strengthen international publicity and communication to establish a good corporate image. By actively participating in international forums and exhibitions, we will demonstrate the strength of the enterprise and enhance the trust and recognition of Chinese enterprises in the international community.
This is a long-term and arduous task that cannot be accomplished overnight, but history has proven that Chinese companies have strong adaptability and innovative spirit, and starting from the deep roots of the domestic market, Chinese companies are fully capable of expanding their influence in the United States and even the global market in the future.
Epilogue:
Overall, in the grand narrative of global economic integration, the breadth and depth of United States investment in China has become a huge picture. These investments not only cover a wide range of fields, from manufacturing to high-tech, but also have a profound impact on China's economic context that cannot be ignored.
At the same time, the footprint of Chinese capital has gradually spread throughout the United States, and this two-way investment flow has injected new vitality into the economic development of the two countries, and also brought unprecedented opportunities and challenges.
References
United States has 73,000 companies in China, with a total investment of more than 1.2 trillion US dollars, how much is China United States?
2024-06-01 12:00 – Wizard Economy
United States has 73,000 companies in China, with a total investment of more than 1.2 trillion US dollars, how much is China United States?
2024-05-31 18:08 - Ren Jiyan