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One of the oldest Chinese emporiums in the US, the Pearl River Mart was founded as “friendship store” in 1971, months before Richard Nixon’s China visit. The main store has moved five times and is now in SoHo, a few blocks from Chinatown. Photo: Pearl River Mart / Think!Chinatown
Opinion
Chris Pereira
Chris Pereira

Despite US-China decoupling talk, Chinese businesses are flourishing in America

  • There is a growing number of Chinese companies and Chinese-run businesses in the US, particularly smaller ones that operate under the radar
  • Despite the immense challenges, Chinese companies have adapted and found the space to operate in the US
Chris Pereira
Chris Pereira
Why you can trust SCMP
A lot is made of the US-China trade war – some are even calling it a new cold war. Yet Chinese businesses are reshaping the world like never before. Middle Eastern schools are requiring their students to learn Chinese. Singapore is calling on the United States to be more pragmatic with China. And Europeans are loving Chinese new energy technology.

Despite the staggering number of Chinese companies operating around the world in nearly every imaginable industry, there is still the perception that geopolitical tensions and protectionist policies have made it nearly impossible for Chinese companies to do business in the United States.

While it’s true that China’s outbound capital restrictions and America’s targeted trade restrictions on Chinese companies make it increasingly complicated for them to do business in the US, my observations across a variety of industries is that there are actually more Chinese companies and Chinese-run businesses – of all shapes and sizes – operating in the US than before.
I spend my time travelling between the two countries and have been working with Chinese companies expanding in North America for over a decade, including supporting public relations efforts for Huawei Technologies in the early days of the Meng Wanzhou saga. While there absolutely are challenges – just ask Huawei, Inspur or TikTok – Chinese companies also have distinct advantages that are seeing them succeed in the US and other markets like never before.
The speed of innovation, especially in cities like Shenzhen, is faster than almost anywhere else in the world. And the sheer number of companies here developing products and services for every imaginable scenario and market means that to survive, they must have the best products, prices and service.

Most industrial and technological sectors as well as consumer product industries have significant numbers of Chinese companies active globally. Go to any industry trade fair in the US and you’ll quickly see that Chinese companies are getting close to having a majority presence.

The new Lenovo dual-screen Yoga Book 9i laptop on display at the Microsoft Inc booth at the Consumer Electronics Show in Las Vegas, Nevada on January 6. Photo: AFP
In some industries, Chinese companies are at the forefront of innovation and production, such as in electric vehicles, energy storage and solar panels. Dig deeper into many of Amazon’s best-selling products and you’ll find a huge percentage are from Chinese companies.
This is an exciting and unprecedented trend. There is a consistent drive and determination from these Chinese companies, from major conglomerates like Lenovo to start-ups making smart home products for sale on Amazon.

Another consistency (unfortunately, in my view) is the perceived need for them to minimise their “Chinese-ness”. Whereas many American and global brands tell their story, these Chinese companies feel the need to say as little as possible on that front to avoid suspicion and undue accusations.

Almost everyone I speak to in business both in China and the US just wants to do business. But in today’s political climate, it doesn’t take much for political opposition or a competitor to make accusations of Chinese government affiliation, putting your company at a steep disadvantage.

Some Chinese companies are therefore reluctant to associate with any area deemed sensitive, such as artificial intelligence and data, while other areas are off-limits entirely, such as information security or telecommunications.

27:21

Biden’s China tech policy goal: a 10 year handicap

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Despite the adversity and ofttimes outright discrimination, more companies are finding the secret sauce to success in the US market – keep your head down, localise operations and sever as many ties as possible to a home office in China, deliver quality products at speed and competitive prices, and adopt international branding and messaging.

I would also suggest that more Chinese companies in the US be open and engage with the media, shaping your own narrative before it is shaped for you.

This might account for the figures showing declining foreign direct investment and employment figures for Chinese companies in the US. While multinational corporations might be shrinking, small, under-the-radar businesses or Chinese-run businesses that operate like American companies are increasing. This makes for more competition, better products and better prices for the American consumer.

While geopolitics and economics are often intertwined and interdependent, most of the time, people just want to make friends and do business. Thankfully that is still the case in the world’s two largest economies. Despite the immense challenges, now is still the best time for Chinese businesses in the US.

Chris Pereira is the founder and CEO of North American Ecosystem Institute, a communications and business consulting group

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