Will firms overcome US govt’s political posturing?

Source: Global Times Published: 2020/7/29 20:57:31

Photo: Li Hao/GT

There has been a marked decline in the preference for US products and brands among Chinese consumers due to the downward spiral in US-China relations, a recent Global Times survey revealed.

While Chinese people are unlikely to show their antipathy toward the US in the same way as India's mass boycott of Chinese products and Chinese technologies, the survey result is disturbing and doesn't augur well for the future interaction between the two economic giants.

The past decades have witnessed the US-China relationship has weathered many ups and downs, but there was never a public boycott of American goods by Chinese people. 

After the Trump administration launched its relentless trade war against China in late 2018, some American media outlets tried to fan the flames of hostility between the two countries, claiming that Chinese people might "boycott US goods," however, the boycott never happened.

There are many reasons behind the situation, but perhaps the most reasonable logic is that American companies are deeply integrated into the Chinese economy more than any other foreign businesses. 

After decades of China's reform and opening-up, US products already play a big part in our everyday life, and at the same time, US businesses in China have provided numerous job opportunities for local job-seekers. Also, the quality of American products is highly rated among Chinese consumers.

Many years ago, Chinese people staged boycotts of Japanese products amid feuds over history. Now, Chinese society has become more mature and rational toward the "boycott" approach when it comes to a diplomatic standoff. 

While some in China may occasionally put forward the idea of punishing some countries by boycotting their products, such voices are winning less support and approval from the mainstream public now.

It is against such a backdrop that we believe it is necessary to pay attention to the trend of preferences revealed in our survey. 

After conducting an investigation among about 1,800 respondents from 10 major Chinese cities from July 17 to 24, the survey found that 63.7 percent of the respondents said that their like for American goods and brands has dropped. 

Though this decline in US products preference is clearly not the same concept as a boycott by the public, but still it can be seen as a reminder that the repeated new lows the Trump administration has brought US-China relations to is weighing on Chinese market sentiment.

While it remains hard to tell how this trend will unfold, or whether it will impact US businesses operating in China, we genuinely hope they don't miss any important market signal arising from the public. 

If the Trump administration continues to cause more troubles to bilateral relations and escalate tensions, sooner or later quantitative accumulations will result in qualitative change - which is likely to lead to broader harm to the businesses community.

Posted in: GT VOICE

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