China’s state media praise some US firms amid fears of a new trade war

12:40 am Thursday, November 28th, 2024

By Joe Cash

BEIJING (Reuters) -China’s state media have praised some U.S. firms for “strong collaboration” – commentary that comes amid fears of a trade war and is reminiscent of how tensions with the U.S. were covered by Chinese newspapers during Donald Trump’s first presidency.

Trump, who takes office on Jan. 20, said on Monday he would impose a 10% tariff on Chinese goods so that Beijing does more to stem the flow of Chinese-made chemicals powering an opioid epidemic in the United States.

He has also threatened tariffs in excess of 60% on Chinese goods while on the campaign trail.

During Trump’s first term, corporate executives and foreign investors scoured Chinese state media for signals as to which U.S. firms might be in favour and which might be penalised as trade tensions ratcheted up.

The state-owned Global Times late on Wednesday praised Apple, Tesla, Starbucks and HP for strong collaboration with Chinese partners.

“U.S. politicians need to pay attention to and respect the evident willingness of American businesses for economic and trade cooperation by tailoring suitable policy environments for enterprises,” it said.

The China Daily also noted that Morgan Stanley received regulatory approval in March to expand its China operations, citing this as evidence of foreign financial firms’ enthusiasm for investing in China.

The U.S.-Sino trade war during Trump’s first term saw China threaten to ban U.S. companies from importing, exporting and investing in China with the creation of the “Unreliable Entity List”.

At the time, Global Times reported the list would target U.S. companies such as Apple, Cisco Systems and Qualcomm. But China never followed through on the threat and to date the list has only included U.S. companies involved in the sale of arms to Taiwan.

“Neither side was good about communicating policy directly, so business was busy looking at the tea leaves and trying to separate signal and noise in traditional and social media,” said a Beijing-based American executive.

The executive, who was also in China during Trump’s first term, is not authorised to speak to media and declined to be identified.

Bo Zhengyuan, a Shanghai-based partner at consultancy Plenum, said he expected Beijing would not rush to use tools like the Unreliable Entity List in the immediate wake of any formal tariff announcement once Trump is in power, given the weak state of the Chinese economy.

But Beijing could retaliate later if it felt U.S. policymakers were harming China’s commercial interests.

“There was collateral damage last time, and there will be collateral damage this time. But I think the Chinese government, given the foreign investment situation here, is mindful that this kind of tactic will have some backlash,” he added.

During Trump’s first term, Chinese authorities did not often make direct official comments on the trade war.

Authorities in mainland China this week have yet to make direct comment on the 10% tariff promised by Trump, although a Chinese embassy official in Washington has said no one will win a trade war.

Only 47% of U.S. firms were optimistic about their five-year China business outlook, a September survey by the American Chamber of Commerce in Shanghai showed.

(Reporting by Joe Cash; Editing by Edwina Gibbs)