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China Focus: Trade worries weigh on foreign businesses

Source: Xinhua| 2019-05-23 00:00:12|Editor: yan
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SHANGHAI, May 22 (Xinhua) -- The US-initiated trade row with China has cast a shadow on foreign businesses in China and elsewhere in the world, setting back their long-term efforts in establishing trade connections, according to Xinhua's interviews with foreign firms and unions.

Caitlin Kennedy Eannello, director of communications of the U.S. National Association of Wheat Growers, told Xinhua on Wednesday that American wheat growers have spent a lot of time building trade relationships with China. Due to the tariffs, they don't expect to export to China in the near future.

According to the association, between June 2016 and February 2018, China imported about 2.6 million tonnes of the U.S. wheat products. Eannello said the association is an advocacy organization, committed to getting growers' messages heard.

At a meeting in Guangzhou, capital of south China's Guangdong Province, Friday, Charles Freeman, former assistant U.S. Trade Representative and senior vice president for Asia at the U.S. Chamber of Commerce, said the trade tensions are hurting U.S. farmers.

"They are not selling the products they otherwise would. That's a big concern," he said.

Freeman said the cost of decoupling between the U.S. and China on companies and the global economy is extremely high.

Carlo Diego D'Andrea, vice president of the European Union Chamber of Commerce in China, said the chamber launched a business confidence survey this week asking its members about the impact of the trade pressure.

A total of 585 members responded to the questionnaire. Among them, 25 percent, or over 100 companies, said U.S. tariffs on China would have a negative impact on them, as their businesses involve exports from the Chinese market into the U.S. market.

D'Andrea said the European firms are caught in the middle. The chamber advocates for a multilateral approach to resolving the trade friction between the U.S. and China.

"Our European member firms are committed to the Chinese market. Even if we lose a bit of optimism, we still believe that China is a top destination for further investment," said D'Andrea.

CHINA DRIVES GLOBAL INCLUSIVE DEVELOPMENT

While the US-initiated tariff war is biting, foreign companies believe in China's ability to roll with the punches.

Alain Le Couedic, a partner at Roland Berger, a global consulting firm, said China is not just a manufacturing hub, but a very significant part of the world's supply chain element.

He said with impacts from the trade rows, goods sourced from China will not be as cheap as before. That will obviously impact the U.S., which is a big importer, but also any other companies in the world that need imports from China.

"The fundamentals of the Chinese economy are still very strong due to its internal demand, " he said adding the Chinese government has tried to push and rebalance the economic growth engine towards consumption. In many sectors, there are opportunities for new businesses and existing businesses to develop.

More than 250 of the Fortune 500 companies and industry leaders have signed up for the second China International Import Expo (CIIE) to be held in November, said Sun Chenghai, vice director of CIIE bureau.

He said the exhibition area for the second session would be expanded to 300,000 square meters from 270,000 square meters for the first session last year, which was the world's first import-themed national-level expo.

He said CIIE promotes an inclusive development for trading partners, thereby benefiting the global economy. The area for medical equipment & healthcare products at this year's session is fully booked, with 70 percent of the Fortune 500 pharmaceutical companies attending the event.

Foreign firms including General Electric (GE) and Hyundai Motor Group have announced to book larger exhibition areas at the upcoming CIIE than last year to bring more of their foreign auto part suppliers to China.

"The expo plays a big role in promoting global trade exchange. We will bring our newest products to the expo to exhibit GE's new technologies ranging from aviation, medical care to renewable energy sectors," said Max Chen, vice president of government affairs and policy of GE China.

LVMH, the world's biggest luxury goods company, has announced to attend the second CIIE, with Antoine Arnault, the group's director, citing it as "clear testimony of LVMH's confidence in the long-term vigor of the Chinese economy and the friendship with Chinese people."

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