US companies are taking expansive risks to do business in China

Published:

On: Oct 2019

It is recently reported that the United States companies doing business in China are ultimately moving with an unprecedented pool of risks, from slowing growth due to the trade war between China and USA as well as pro-democracy protests in Hong Kong. But that has not halted many of them from pushing deeper into the vast market of China.

Reportedly, the American businesses have received positive signals from China in recent weeks, indicating the better way for lucrative agreements in the second biggest economy of the globe. Paypal clinched a license to offer digital payment last month.  While, the Wall Street Journal reported that BlackRock has talked to Chinese tech company Tencent regarding a potential tie-up. And JPMorgan Chase gathered an auction in the month of August that should allow the bank to manage control of its asset management business in Chinese mainland. But, the final approval is still pending.

Numerous other United States firms are becoming more entrenched in China. The top leading automakers Tesla has spent the last year manufacturing a massive factory in Shanghai in a bid to tap the world’s greatest market for electric vehicles. According to the source, the factory may commence production as early as this month. Tesla did not respond when asked about the report earlier this month.

The analysts urged that such relationships between US companies and China are not unusual. The country is biggest home to more than 1 billion people, which many firms observed it as a customer base ripe for the taking. The president of the American Chamber of Commerce in Shanghai, Ker Gibbs said that corporate America is still very much interested to do business in China. And if you discuss to US business executives, they never see a complete decoupling as an option at all.