The
article below gives you some idea of what US companies are benefitting from
China trade. Here
are the American companies most at risk in a trade war with China, By Josh Ye,
7/26/17 UPDATED 3/23/18. China trade cost 3.4 million US jobs in 2001-2015:
report
1 Feb
2017
Here some of the American businesses and
industries that could bear the brunt if a trade war were to break out between
the US and the world’s most populous nation:
1). Hollywood studios
- China’s 2016 box office takings edged up 3.7 per cent, sputtering after the
previous year’s astonishing 48 per cent growth. Still, that’s 45.7 billion yuan
(US$6.7 billion) in receipts, second only to the US, and 42 per cent of takings
were by foreign movies. China’s government only allows three dozen imported
movies every year on a revenue sharing basis, where the studios get 25 per cent
while the Chinese distributor gets the lion’s share. Hollywood studios have
been lobbying China to increase the import quota and to concede a larger share
of revenue, and have threatened suits at the World Trade Organization if an
agreement isn’t reached by 2018.
2). Boeing -
China’s airlines will need 6,800 new aircraft valued at US$1 trillion over the
next two decades, according to a November 2016 forecast by Boeing, while competitor
Airbus puts the estimate at 6,000 planes worth US$945 billion. Either way,
that’s the biggest single aviation market in the world. In previous trade and
financial disputes -- from trade imbalance to concerns about the yuan’s value
-- with the US or with the EU, China’s state-owned carriers would typically
make a bulk order of aircraft from either the American or the European
manufacturer to smooth over the disputes. Boeing is banking on Chinese airlines
to take delivery of three in every 10 of its best-selling 737 models, enough to
support 150,000 American jobs. Boeing is scheduled to open its first
overseas completion center for 737 planes next year, in Zhoushan in Zhejiang
province. Airbus already does the final assembly of its competing A320 aircraft
in Tianjin.
3). Apple - Apple
Inc was the fifth best-selling smartphone brand in the world’s largest
smartphone market in the second quarter, pushed aside by Chinese brands Huawei,
Oppo, Vivo and Xiaomi, which offer sophisticated functions at reasonable prices.
Still, the Greater China region comprising the mainland, Hong Kong and Taiwan
made up 25.3 per cent of Apple’s 2016 operating income, not a market to be
trifled with.
4). Starbucks
- The world’s largest coffee purveyor wants to double the number of outlets
in this nation of tea drinkers to 5,000 over the next five years. The
Seattle-based company’s second-quarter sales in China last year grew at double
the global average of its entire franchise in the same period.
5). General Motors, Ford and Chrysler - America’s three largest carmakers
have all invested heavily in assemblies, design centers, staff and extensive
sales networks for more than a decade in China. More than 20 million vehicles
are sold in China every year, where production of cars, trucks and commercial
vehicles have surpassed the US since 2009. While most foreign carmakers now
assemble in China through local ventures to sell to Chinese customers, a trade
dispute hurts the importing of components, and a smaller number of imported
models. And any foreign exchange restrictions by China that impede the
repatriation of profits and dividends back to Detroit would hurt these
carmakers.
GM’s Shanghai venture was slapped with a
US$29 million fine last December for breaching China’s antitrust rules, a
punitive move seen as a warning shot to then incoming president Donald Trump to
tone down his anti-China rhetoric.
6). Wal-Mart Stores
- Wal-Mart doesn’t break out its China numbers, but the world’s most populous
nation is big enough that it operates 20 outlets in the country, not including
14 of its members-only Sam’s Clubs with 1.8 million members, with annual
increases of up to 10 per cent. In Guangdong province alone, Wal-Mart was
planning to open 40 new stores over five years. The retailer’s global
procurement sourcing operation office has been based in Shenzhen since 2002.
Wal-Mart’s China procurement fell to US$9 billion in 2008, from US$18 billion
in 2005, based on the latest available data revealed by the retailer. Estimates
of China-made products on Wal-Mart’s shelves run from 40 per cent to 70 per
cent of total inventory, so any move to levy import tariffs on Chinese products
will have immediate impact on the hip pocket nerve of American consumers.
Comments
Appel and Boeing are
the only company with engineering content. The Chinese set up design labs to
copy US technology. This and all internet related technology are most at risk
to serious intellectual property theft.
Norb Leahy, Dunwoody
GA Tea Party Leader
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