Burgers and lattes don't produce as much tension as high-tech companies in the complex U.S.-China relationship. These difficulties have persisted under Joe Biden, who into office promising to resist China's expanding military dominance and intimidation of neighbors, improve Uyghur and other ethnic minority treatment, and crack down on intellectual property theft.
In February, Biden ordered the downing of a Chinese surveillance balloon that traversed the entire US, worsening relations. Beijing criticized Taiwan's president Tsai Ing-wen's U.S. trip earlier this year. In response to U.S. limits on exports of advanced computer chips and associated production technology, China limited graphite, gallium, and germanium, metals used to make semiconductors, solar panels, missiles, and radar.
As 2023 winds down, the Biden-Xi meeting outside San Francisco this month signals a warming partnership. Since then, Biden's closest advisers have argued that tightening standards and barring U.S. high-tech investments in China is important for national security.
China, a prospective opponent, supplies numerous high-tech components, which worries Trump and Biden. Both want “friend-shoring” to reduce America's reliance on Chinese factories.But Biden administration officials say they don't want to completely decouple the world's two largest economies.
Yes, derisking. Decoupling is impossible, according to U.S. ambassador to China Nicholas Burns during a Washington event. We want a robust commercial and business partnership with China, but not in military technology that may exceed us in 10 years.
Reshoring Institute executive director Rosemary Coates said McDonald's and its fast-food rivals may expand or shrink.Franchises “can be opened or closed,” Coates said. “You're not buying an auto plant or machine shop.”
The massive Chinese market is vital to many worldwide companies: McDonald's announced during its annual investors day this month that 70 million of its 150 million loyalty program customers are in China.
KFC China has added 22% more stores in the previous five years and plans to launch 1,200 more in the next three. Popeyes Louisiana Kitchen built a Shanghai flagship in August and plans to develop 1,700 more over 10 years.Despite China's size, U.S. firms should contemplate expanding there.
The U.S. cautioned Americans against entering China in July because to arbitrary law enforcement, exit restrictions, and wrongful detentions. Commerce Secretary Gina Raimondo warned Chinese officials that U.S. firms may stop investing in their country if they don't resolve raids on businesses, unjustified penalties, and unpredictable government actions.
Beijing welcomes foreign investment but has not suggested it would change trade, market access, or other policies that upset Washington and its trading partners.
“Where do you draw the line?” said former Bush economic advisor Levy. Someone may need a reliable source for critical computer chips. No problem serving lattes and steaks. What's the middle ground for vehicle parts? How about ball bearings?