US can’t stop globalization process of increasingly competitive Chinese enterprises

By Hu Weijia Source:Global Times Published: 2018/5/14 21:48:40

US President Donald Trump tweeted on Sunday that he has urged the US Commerce Department to give Chinese telecoms equipment group ZTE Corp "a way to get back into business, fast." A few hours after the announcement, shares of some US-based suppliers to ZTE picked up after hitting a low point due to a US ban on exports to the Chinese company.

ZTE is a major purchaser of US-made semiconductor equipment and components. In April, the US government imposed a seven-year ban on US exports to ZTE, a move that caused both the Chinese company and its US suppliers to suffer big losses.

Washington has many misgivings when handling economic relations with Beijing. On the one hand, restrictions on Chinese investment have proliferated in the US since Trump took office, but on the other hand the US government does not dare to deliver a crushing blow to Chinese companies due to their close connections with the US economy.

The two countries' economic structures are highly complementary, enhancing the elasticity of bilateral economic ties. There is still room for development as well as opportunities in the US for Chinese companies, even for those in sensitive sectors.

The Trump administration might set up obstacles for Chinese companies hoping to step up outward investment, but as long as those companies handle their difficulties with determination and perseverance, they will eventually become great multinational enterprises that are able to keep abreast with their US competitors.

In recent months, a string of Chinese acquisition plans in the US have been blocked due to so-called national security concerns. Chinese companies should draw lessons from this situation, but restrictions on investment will not stop them from increasing their presence in the global market. Their muscles will become stronger as they strive to cushion the frontal attacks given by the US.

The international competitiveness of Chinese enterprises has increased in recent years. Earlier this month, Chinese phone maker Xiaomi filed for what's expected be the world's largest IPO since Chinese e-commerce giant Alibaba raised $21.8 billion in New York in 2014. Chinese companies have seen their market shares increase significantly in the world, especially in countries and regions along the route of the Belt and Road initiative. This adds to the evidence that Washington will be unable to stop the globalization of Chinese enterprises.

The author is a reporter with the Global Times.


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