Reference:CGTN | Updated:17 Feb 2021
A year-long China-U.S. trade war and the debilitating effects of the COVID-19 pandemic on global trade have rendered the relationship between the world's two largest economies even more complex.
However, this hasn't dampened the enthusiasm of American companies for doing business in China. At the ongoing China International Import Expo (CIIE) in Shanghai, hundreds of American companies and organizations have showed up in search for potential customers and lucrative deals.
CGTN's Wang Tianyu caught up with Ker Gibbs, president of the American Chamber of Commerce in Shanghai, on the sidelines of the third CIIE. He underscored that U.S. businesses have always found China's market attractive and the Chamber hasn't witnessed a mass exit from China, but it's time for American companies to be realistic that China has a different political and economic system.
The following are excerpts from the interview, which have been edited for clarity and brevity.
CGTN: What are American companies looking for at the CIIE?
Gibbs: CIIE is a really good opportunity for the American companies here. What they want to do is to cut deals in order to expand their market share. The China market is extremely important to most of the American Chamber of Commerce members. The China market is frankly one of the only large markets with any growth right now, especially post COVID-19. So, this is a very important event for my members.
CGTN: How is this year's CIIE different from previous ones?
Gibbs: Clearly COVID-19 has had an impact. It's difficult to travel internationally. That was going to have a major impact on our presence here at CIIE. Having said that, we think there's probably about 170 American companies exhibiting here. Now that's slightly down, but it's not down by that much. So when you consider how different 2020 is from 2019, that's quite extraordinary that we still have 170 companies exhibiting here at CIIE.
CGTN: After year-long U.S.-China trade tensions and pandemic impact, what changes have you noticed in the U.S. supply chain in the Chinese market?
Gibbs: Clearly there's a lot of tension between the two countries. That's clear. In terms of re-engineering the supply chain, it's created a lot of questions. And I think there's a lot of boards out there on senior management that is looking at the China supply chain. But we have not seen a mass exodus, or really major changes in the structure of the supply chain. What we've seen is basically a lot of investigation and a lot of planning and maybe some adjustments here and there. But that's fairly normal for supply chains. So we haven't really seen a mass exit from China.
The members in the American chamber of commerce here are quite dedicated to the China market. We're here to stay. We like the fact that the consumer market here is expanding like it is the growing middle class. So this is a very attractive market for us and we are here to stay.
CGTN: How do you look at the future of the global trade and investments?
Gibbs: Global trade is here to stay. I don't think that's going to be changing. But there is going to be a renewed emphasis on reciprocity. Looking at China from the outside. I think it's time that many of the American businesses are now starting to look at China more as it is as opposed to how we want it to be or we expect it to become. So there's a more realistic attitude about where China is with respect to trade policy. What we're going to see in the future is more emphasis on reciprocity. In other words, if you can't do it here, you shouldn't be able to do it there.
At this point, we have to be quite realistic that China has a very different political and economic system. There's no question about that.
CGTN: What key sectors are American companies eyeing in China's market?
Gibbs: Financial services for sure. That's something that's an area where American companies are quite strong. China has made moves to lift the equity caps in insurance and commercial banking and securities. That's a positive move. So we expect to get more market share in that area. But frankly, our current market share is quite low. If you look at the overall banking market here, foreign companies actually have less than 2% market share in the entire market. So we're looking to expand that.
We also expect health care to be a growing industry, especially post COVID-19. But China had already been strengthening the health care that they make available to people here in China. And that has created market opportunities for American companies.
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