Despite political woes, America Inc is still thriving in China

FOUR DECADES 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. President Donald Trump’s trade war against China and his crackdown on Huawei, a domestic telecoms-equipment giant, have provoked further anti-American sentiments.

On December 31st Mr Trump tweeted that he will soon sign a “phase one” trade agreement with China. That will lead to some tariff cuts on Chinese imports, and to a presidential trip to Beijing for further haggling. When he visits, Mr Trump will surely hear grouses from his country’s firms about their troubles in China. What they are less likely to trumpet is how surprisingly well they are still doing there.

Some firms are suffering from a backlash arising from the trade war. But its effect on America Inc has been exaggerated. For one thing, American companies on average get only about 5% of their revenues from China (see chart), according to Morgan Stanley, a bank. Though the technology, automobile and consumer-products industries have greater exposure...

via Business Feeds

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