The Rising Influence of Rising Affluence

[DewDiligence]

The Rising Influence of Rising Affluence—(10 years on):

https://www.wsj.com/articles/neither-coronavirus-nor-trade-tensions-can-stop-u-s-companies-push-into-china-11589880603

Relations between the U.S. and China are at their lowest point in decades, and the Covid-19 pandemic has rattled consumers the world over. U.S. companies and brands are doubling down on China anyway.

To understand why, look no further than the hundreds lined up around the block in central Shanghai, many of them defying coronavirus social-distancing advice, to get their hands on chicken sandwiches from Popeyes Louisiana Kitchen. Popeyes, the latest U.S. brand to plant its flag in China, opened on Friday, the first of 1,500 planned locations in China.

“Chinese people still like America and American brands,” said 18-year-old Oliver Kong, one of those waiting in line outside the new Popeyes. “McDonald’sis my favorite, but I’m excited to try something new.”

… From Popeyes to Walmart, Tesla [and] Exxon, companies are betting that the country’s long-term growth potential still outweighs the mounting case against further expansion—including geopolitical tensions and slowing growth.

While the pandemic has spurred businesses to rethink supply chains to reduce dependency on China, companies that are producing in China for Chinese customers are bulking up their local presence.