Despite the strained relations between the United States and China, the latter continues to remain the most preferred destination for American firms. The US along with European and Western countries have been cornering the Asian superpower over its handling of coronavirus outbreak, where it originated. Meanwhile, a Wall Street Journal report has revealed that an American company Popeyes opened the first of total 1,500 planned locations in China. Other firms including Walmart Inc, Tesla, Exxon Mobil Corp are betting on the fact that the long-term growth potential of the US will overpower the political tensions between both the countries.
Both China and the US have indulged in a war of words since the pandemic began with US President Donald Trump calling the coronavirus as “Chinese Virus” and Beijing accusing Washington of “hypocrisy”. Amid such situations, the US has been trying to shift the supply chain of the world by decreasing the dependency on China. So, companies that are producing in the mainland for Chinese customers are also ramping up their operations to enhance the ‘local presence’. However, despite the efforts, China’s economy plunged by 6.8 per cent in the first three months of 2020 as compared to 2019.
The US-China row over coronavirus escalated when both economic superpowers were having an ongoing trade war and the US mounted additional tariffs on China-based tech giant Huawei. While the US has been trying to gain international support in its mission to sideline China, Chinese Commerce Minister Zhong Shan recently said that the foreign companies halting operations in the country are not a cause of worry. According to him, “smart companies won’t give up on the huge China market”.
After the United States imposed a new set of restrictions on China-based tech giant Huawei, Beijing has now urged Washington to stop the “unreasonable suppression” of the company along with other Chinese enterprises. The US Commerce Department said on May 15 that the country would now limit the ability for Huawei to use American technology to build the semi-conductors. According to reports, this move would also cut off Chinese tech giant’s undermining of the already existing sanctions by the US.