For U.S. companies in China, it's business as usual
By Alysha Webb in Shanghai
ChinaOnline News
(5 April 2001) No worries.
That’s the message U.S. companies in China are sending out in the wake of the latest row between the United States and China.
The two countries may be at loggerheads right now over the downing of a Chinese jet and the subsequent landing of a U.S. surveillance plane in Chinese territory, but businesses here are putting on a brave face. This incident won’t influence their current or future business plans in China, they say.
"We’ve been here 20 [years] and seen a lot of incidents—this is nothing," said William Yeoh, general manager of greater China for The Gillette Co.
Gillette has three joint ventures and one wholly foreign-owned enterprise (WFOE) in China that makes everything from batteries to razors to tooth brushes. The current tension between the United States and China won’t interfere with those operations or any future expansion plans, said Yeoh, who declined to reveal Gillette’s total investment in China.
"As far as the company is concerned, it’s a minor incident. I don’t see any long-term impact," he said.
Spokespeople for other companies echoed his words.
"It’s a political issue and is not affecting our daily business," said Steven Lyons, Motorola Inc.’s regional director of corporate communications and public affairs, Asia-Pacific region. Motorola has invested a total of US$3.5 billion in China, including a US$1 billion-plus chip factory in the northeastern city of Tianjin.
Showing a brave face
Businesses may be putting on a brave face for the public, but it seems there is less alarm in the business community here in China than some in the United States might believe.
"This is more a political issue here," said Sydney Chang, chairman of the American Chamber of Commerce in Shanghai, who said that as far as he can see, it’s business as usual for American companies in Shanghai.
China’s call for an apology and compensation from the United States might have faint echoes of the atmosphere after the May 1999 bombing of China’s Belgrade embassy, but the mood on the ground here is far different. No protestors are gathered outside the U.S. consulate in Shanghai, and a small group of would-be protestors were sent home by Chinese troops at the U.S. embassy in Beijing.
When there’s money to be made, companies can be amazingly immune to diplomatic flak. Even the bombing, pointed out one Western diplomat, "had almost no impact on business-to-business relations."
Negotiations with Chinese trade officials on China’s accession to the World Trade Organization are continuing unabated, he added. That’s not so hard to explain. With 1.3 billion potential consumers, China is a market few companies can afford to ignore.
Local business people seem more willing than foreign businesses to voice concern.
"These last six months there have been continuous happenings" between the United States and China, says Xiao Ming, a 40-year Shanghai businesswoman. "Maybe America just wants to show some power." She’s trying to predict which course the relationship will take in the next six months to plot a business strategy for her import-export company.
In recent years, economic ties between the two nations have grown increasingly close despite the rocky diplomatic relationship, growing tensions over U.S. arms sales to Taiwan and China’s poor human-rights record.
Bilateral trade between the United States and China rose 22.8 percent in 2000 to US$123.9 billion, compared with just US$66.4 billion in 1996, according to U.S. government figures.
China is the fourth-largest trading partner for the United States, and its importance is expected to grow. U.S. forecasts show a doubling in the value of U.S. exports to China to US$27 billion in 2005, up from US$13 billion in 1999, according to an April 5 Agence France Press (AFP) report.
If tensions continue to rise without a clear signal that the issue is being resolved, the foreign business community may become less calm, especially if China’s entry into the WTO is in some way hindered. Many companies have already boosted their investment in China in anticipation of post-WTO opportunities.
"We would hope it doesn’t slow WTO entry. These are two different issues—one is global trade, the other is a very unfortunate situation that has two governments in pretty animated discussion," said Motorola’s Lyons.
But for now, the business of business goes on.
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