A key insight for China Inc about what the policies towards China of the next President of the United States could look like was available during the Democratic and Republican National Conventions.
China Inc has been caught in the rocky relationship between the US and China,
According to some reports quoting executives of Chinese technology firms, China Inc would prefer a Joe Biden presidency compared to another four more years of President Trump. The reports have not mentioned the names of the companies or their executives for obvious reasons of secrecy.
However, the overwhelming sense among companies in mainland China is that the tough stance of the US on China is here to stay irrespective of whoever is come into the White House next.
Decoupling is one of the issues that companies in China are worried about. Decoupling basically means the undoing of US business relations with China that have been developed for than three decades.
Everything is on the cards: from getting American factories to pull their supply chains out of the mainland, to forcing Chinese-owned companies that operate in the US – like TikTok and Tencent – to swap their Chinese owners for American ones.
According to Solomon Yue, vice chairman and chief executive of the Republicans Overseas lobby group, there is no making a mistake that under a Trump administration “decoupling will be accelerated”. “The reason is because there’s a genuine national security concern about our technology being stolen,” he said.
“There’s a realisation that you can never really trust the US again,” according to a strategist as quoted in he media.”That’s got Chinese companies thinking what they need to do to protect their interests.”
The Trump administration has also given a time frame till January 2022 to comply with new rules on auditing for Chinese firms listed in the US as a part of thee Trump administration’s focus on China.
If companies to not comply, there is the likelihood of being banned in the US.
Analysts believe that the scrutiny and tone of the recommendations made by the Trump administration is likely to stay even though it is likely that a Biden administration may not necessarily push through with the exact same ban.
“A Democrat, whether in the White House, Senate or Congress, would have little reason to roll back Trump’s toughness on China without some concession in return,” said Tariq Dennison, a Hong Kong-based investment adviser at GFM Asset Management.
‘”One thing both parties seem to agree on in 2020 is to blame China for any of America’s problems that can’t be easily blamed on the other party. That’s not going to change anytime soon.”
Over the last 30 years, globalization has benefited China the most. Hundreds of millions of Chinese are now able to afford a better life because of globalization.
But trump ants to change that precise thing – as his administration believes that globalization has made the Chinese richer and the Americans poorer.
One of the characteristic of the Trump presidency has been the so called deglobalisation with the borders becoming less porous for businesses and lee freedom for free trade. And Chinese analyst believes that trend is unlikely to change even after the election.
“The fundamental adjustment of the US’ strategic mind-set over China is real”, reads the latest op-ed in the Communist Party’s mouthpiece, The Global Times. ‘This has to a large extent reset the China-US relationship.”
(Adapted from BBC.com)