The recent and present tariff war between the U.S. and China (but not only China), is the most counter-productive thing that could have happened to Sino-American business interests. Yet it’s not as if it’s been clear sailing for Chinese companies doing business in the U.S. Colleges and universities all over the United States have been beneficiaries having thousands of Mainland Chinese attend schools often at full tuition. Chinese student enrollments are beginning to decline in response to a general feeling that they are not as welcome as they have been. Getting cash out of China via real estate purchases for Chinese students attending college in the United States is not the panacea it was five years ago.
That Chinese technology companies looking to establish a market in the U.S. will be under increasing scrutiny is clear under the current administration. Huawei keeps trying and keeps hitting roadblocks.
My own quest to create understanding between China and the United States by helping Chinese companies in the U.S. has had some success. Yet I had expected that by now there’d be an overall greater sense of understanding amongst Chinese companies on how to do business in the United States. From my view not much has changed in the 8 years I’ve been working with Chinese companies. So it was difficult enough already without a stack of tariffs that will only make Chinese companies less interested in expanding into the U.S. market.
There are undoubtedly multiple reasons Chinese entrepreneurs have not advanced their efforts in the United States. The misunderstanding of how to invest in the U.S. would be just one. As I’ve mentioned before in the U.S. there’s risk that an investment in a business in the United States may not work out. This is a difficult concept for Chinese businesspeople particularly those over 50. In my experience there’s lots of talk about ‘Win-Win’ and plans, but too often opportunities seem to just die on the vine. I can’t tell if it’s due to natural or unnatural causes. I am not going out on a limb when I mention that lack of committed funding to U.S. market expansion is at the root.
So is it all over for Chinese companies that were or are thinking about the U.S. market? After all there’s so much opportunity in China and Asia itself, is the U.S. market still desirable for Chinese companies? Even if it’s all a negotiating ploy, the welcome mat for China in the U.S. has been rolled up and it might be a long wait while the U.S. and Chinese governments are engaged in a game of tariff chicken in which there will be no winners.
I wonder if U.S. companies are going to in turn become less interested in doing business in China? I doubt it since the market opportunities in China are still enormous. Expect more scrutiny of U.S. companies trying to do business in China. For those still willing to try. This could take a while to sort out.