U.S.-Asia Business
US-China Market Watch: Trump Blacklist, China Consumer Goods Market, TikTok Sale Extended
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Your monthly roundup of the latest US-China business and industry news.
U.S. adds two more Chinese firms to blacklist
The Trump administration is reportedly ready to add four more Chinese firms that are believed to be owned or operated by the Chinese military to the U.S. blacklist, including chipmaker Semiconductor Manufacturing International Corp. (SMIC) and China National Offshore Oil Corp. (CNOOC). According to Reuters, China Construction Technology Co. Ltd. and China International Engineering Consulting Corp. were also named and would bring the total number of banned entities to 35.
Prior to this announcement, Reuters reported that the Trump administration was preparing a list of 89 Chinese firms in aerospace and other industries to be blacklisted for their reported ties to the Chinese military. That would restrict these companies, which include the Commercial Aircraft Corp of China (COMAC), from purchasing a range of U.S. goods and technology. Any U.S. supplier that wants to sell to an entity on that list must obtain a license, which Reuters says is more likely to be denied than approved.
Despite these punitive measures that Trump is taking against China, analysts view the incoming Biden administration as more beneficial to bilateral relations, even though President-elect Biden has given few details on his China policy. However, according to the New York Times, Biden has stated that he has no plans to immediately end the phase one trade deal.
China expected to overtake U.S. as top consumer goods market “very soon”
Chinese authorities have expressed beliefs that the Chinese consumer goods market will “very soon” overtake the U.S. to become the world’s largest. According to the National Bureau of Statistics, Chinese retail sales reached approximately $6.2 trillion in 2019, growing by more than 42% since 2015. In 2019, U.S. retails sales were also at $6.2 trillion.
China’s economy grew by 4.9% in the third quarter of 2020, and the International Monetary Fund expects China’s economy to grow by a total of 1.9% by the year’s end. Comparatively, the American economy is expected to shrink by 4.3%.
The Chinese government announced its goal of doubling its gross domestic product by 2035 and plans on focusing efforts on the domestic market, especially in the wake of a potential U.S. decoupling.
TikTok gets another sale extension
After the U.S. failed to enforce the latest November 27 sale deadline, ByteDance, the Chinese company that owns popular short video app TikTok, had until December 4 to either spin off its U.S. business or find a U.S. buyer.
In August, President Trump had announced that TikTok was a national security threat and ordered ByteDance to sell its U.S. business. Oracle and Walmart have reportedly made a preliminary deal to purchase TikTok, but the deal has yet to receive final approval.
Tesla gets approval to sell Shanghai-made electric SUVs
China’s Ministry of Industry and Information Technology gave its approval to electric car company Tesla to sell its Model Y SUVs made at its Shanghai Gigafactory in China. Earlier in November, Tesla had received approval to begin producing the Model Y at its Shanghai facilities.
The Model Y will be the second car produced in Shanghai to be sold in the country, and the vehicles are expected to roll out in early 2021. Tesla currently sells its Shanghai-made Model 3 cars in China, which are also being shipped out to parts of Europe.
Beyond Meat introduces plant-based pork in China
Plant-based meat company Beyond Meat is launching a new product in China called Beyond Pork, which was developed specifically for the Chinese market. China consumes more pork than any other country, at an annual rate of almost 69 pounds per capita, according to the Organization for Economic Cooperation and Development.
China is currently also experiencing a pork shortage due to the African swine fever, which has caused pork prices to more than double since 2018, making Beyond Meat’s entry particularly timely.
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